BANASTHALI VIDYAPITH

1st Internal Assignment

Topic- Telecom Industry
Group No. 56

Submitted To: Submitted By:

Dr. Vandana Vashisht Rohini Gupta (WBMBA21533)

Ruchi Agarwal (WBMBA21461)

Ruchi Kumari (WBMBA21016)

Ruchi Srivastava (WBMBA21245)

Sajal Dhawan (WBMBA21170)

Acknowledgment

We the students of MBA 1 semester take this opportunity to express our profound gratitude
and sincere thanks to Dr. Vandana Vashisht who gave us this opportunity to write the article.
We would like to express our sincere gratitude for enthusiasm and immense knowledge. We
are deeply grateful to our project guide Dr. Vandana vashisht who has helped us in
completion of this project. She has been a constant guiding force. Finally, we would like to
thank all our friends . Special thanks to Google, Youtube, Newsletters and lastly ICMR .
Thank you everyone.
ABSTRACT

India's telecommunications industry began in 1851 when the first working wires were laid by
the government near Calcutta (British power seat). In 1881, telecommunications services
were introduced in India and telephone services were integrated into the 1883 postal system.
In 1923, the Indian Radio Telegraph Company (IRT) was founded. In 1947, after
independence, all foreign telecommunications companies were put under state control and
created spaces, telephones and telegraph (PTT), which is the head of the state
communications department. Following the launch of the Federal Financial Integration
Scheme on April 1, 1950, the management of the entire telegraph network and national
telephone systems, including those in the former prince's country, became a major factor.
India had about 84,000 telephone wires of its 350 million people at the time of its
independence in 1947. India is the fastest growing economy after the liberation struggle and
international trade and the third largest Asian economy after Japan and China. The volume of
Indian telephones is not so high compared to the western market. India's telecommunications
industry was considered the most strategic and best regulatory service in the world. In 1980,
when the private sector allowed the development of telecommunications equipment, the first
spirit of change in the telecommunications industry began to move.

INTRODUCTION

Currently, India is the second largest telecommunications market in the world with a target of
1.16 billion and has registered strong growth over the past decade. India's mobile economy is
growing rapidly and will contribute significantly to India's Gross Domestic Product (GDP)
according to a report prepared by the GSM Association (GSMA) in partnership with the
Boston Consulting Group (BCG). In 2019, India surpassed the US to become the second
largest market in terms of app download rates.
The liberal policies and reforms of the Government of India have played a major role as well
as a strong consumer demand for rapid growth in the Indian telecommunications sector.
Government has provided easy market access to telecommunications services and an
unparalleled and continuous regulatory framework that ensures the availability of
telecommunications services to consumers at affordable prices. The downgrading of foreign
direct investment (FDI) policies has made the sector one of the world's largest job creation
producers. For two decades and counting, the Indian telecommunications industry continues
to grow and become one of the most powerful sectors that has not only changed over time but
also played a key role in building India's booming economy. From the days of superpowers to
the present 4G years, the Indian telecommunications industry has been a key factor in the
wheels of its development. Economists are always looking for a key element in the
development of telecommunications infrastructure in any country to measure growth in that
country, so for economists, it is a good indicator of economic growth.

Today, the telecommunications industry has developed smart solutions by connecting

Machines to Machines (M2M). At the beginning of the 21st century, the Indian
telecommunications industry continued to promote social and economic growth as many
parts of India connected. From health care, banking, education to power, there is nothing
untouched by innovation in the telecommunications industry. No other industry other than
telecom has had such far-reaching effects on the development of the country in just 20 years.
And now as India approaches digital transformation, the telecommunications industry has
also improved the country's GDP. The telecommunications industry is now not just a means
of communication, it is a driver for other industries as well. Not surprisingly, the pace at
which India's telecommunications industry continues, is estimated to create 4 million jobs in
India. India's services sector accounts for about 55% of GDP. In the service sector, the
telecommunications sector has contributed significantly to the country's growth, accounting
for approximately 5.3% of total GDP in 2012.
According to the World Bank; "A 10% increase in mobile and broadband access increased
capita GDP by 0.81% and 1.38% respectively in developing countries."
India's future looks bright as the telecommunications industry works to create a smarter world
of highly skilled people with new services such as M-banking, M-education and Internet on
Things (IoT). Life has become much simpler, thanks to the media, which is still widely
criticized and blamed for today's misery.
India's telecommunications industry is regarded as an important tool in the development of
the country by contributing to the rapid growth, rapid expansion and development of the
various sectors of the nation. The industry raises India's GDP, benefits from the Indian
Government and creates jobs for more people. The Indian Telecom industry is very large with
companies that make hardware and also produce software. Currently, it contributes to the
revenue of USD 33, 500 million [2]. In partnership with Government Telephone segments,
the Indian Telecom market has also attracted many private companies to come in and start
providing their telecommunications services such as fixed telecommunications,
telecommunications and data services to customers at reasonable prices (see Table IV). The
Government of India has adopted a number of ways to provide Indian Telecom market
companies with an environment while competing. Due to the rapid advances in technology,
Indian telephone operators are working hard to adapt to changing technologies in order to
survive in the market. The Indian Telecommunications Industry has grown dramatically in
the last few years due to the unprecedented growth of wireless telecommunications in India
and infrastructure that not only benefits the telecommunications industry but also has a
positive impact on the entire Indian economy [3] - [5]. The industry has the highest number
of internet users in the world. The Indian Telecom Industry has made a major transition from
being a state-owned enterprise to a competitive one after its independence in 1991. The rapid
growth in India's telecommunications sector has been made possible by the active
participation of private service providers, foreign direct investment (FDI) funding, a series of
Government-sponsored reforms and the use of the latest technology.

Market Size

The total number of online subscribers increased from 765.09 million in February 2021 to
778.09 million in March 2021. Of this subscriber base, the number of online subscribers was
22.75 million and the number of online subscribers was 755.35 million.
India is also the second largest telecommunications market in the world. The total number of
subscribers in the country stood at 1,201.20 million by March 2021.
The total revenue of the telecommunications sector stood at Rs. 68,228 crores (US $ 9.35
billion) in the third quarter of FY21.

Over the next five years, increased mobile penetration and reduced data costs will add 500
million new internet users to India, and open up new business opportunities.
LITERATURE REVIEW

● Muller (1990)’ in his research focuses that the success of mobile commerce can be
attributed to the personal nature of wireless devices. Adding to this are its unique
features of voice and data transmission and distinct features like localization,
feasibility and convenience. The sustained growth of mobile commerce around the
world has been more because of the transfer of technology according to the needs of
local geography.
● Politics and economics of Telecom liberalization in India” by Chowdary T.H.
published in the Journal of Telecommunications Policy in 1998, describes the
ideological background to more than 40-year monopoly of the Department of
Telecommunications over Indian telecommunications. It traces how the monopoly
was eased between 1986 and 1991 and the government had to give up its policy of
central planning and control (Chowdary, 1998). This was the phase of pre-reforms in
the Indian telecom sector, which played a vital role in setting the scene for growth
post the 1991 reforms, and the Chinese telecom Industry underwent a similar phase
before the markets were opened for reforms. The paper also summarized the events
that led to India opening its doors to Foreign Direct Investment (FDI).
● The analysts’ report published by Ernst and Young in collaboration with FICCI titled,
“Enabling the next wave of telecom growth in India – Industry inputs for National
Telecom Policy 2011” is a comprehensive report about the evolution of the telecom
sector in India over the past decade. This report tracks the changes in terms of
technological advancements, business dynamics and socioeconomic environment over
the years. The research program studies in detail all the key segments of the telecom
landscape — wireless, wire line, broadband, infrastructure, NLD, ILD, value-added
services (VAS), equipment manufacturing, infrastructure and convergence. Moreover,
it also identifies and evaluates the critical success factors that are applicable across all
telecom segments such as spectrum, USOF, licensing framework, FDI, security,
consumer affordability and the role of the regulator (Ernst and Young, FICCI, 2011).
Last but not least, it also includes comprehensive interviews conducted with senior
executives in the Indian telecom sector, which provides a firsthand perspective about
various stakeholders involved in the telecom sector.
 ● Though the state owned telecom company Bharat Sanchar Nigam Limited (BSNL)
remains as the pioneer in the telecom market of India, private operators obtained a
high market share (Arun, 2011), among which, India's largest mobile operator Bharti
leads the pack with over one-fifth of the telecom market, followed by 16.71% from
Reliance who is the third largest mobile operator, 16.52% from Vodafone as the fourth
largest and 11.16% from the fifth largest mobile transport TATA Group business.

OBJECTIVE OF THE RESEARCH

The objectives of the research study are:-

● To analyze the history and evolution of the Indian Telecom Industry.

● To review the Government Telecom policies.
● To identify the present trends in the Indian Telecom Industry and its growth.
● To study the future growth opportunities in the Indian Telecom Industry.

RESEARCH DESIGN:

In this study, the researcher has adopted the exploratory research design. The exploratory
research design aims at addressing the exploratory research questions. The purpose of the
exploratory research design is to shed light on a phenomenon that either has not been
explored or has not been recovered out in detail or has been poorly understood at the
theoretical level of explanation. In this study, though the research tends to explore Telecom
industry which has been covered before, it has not been clearly examined from the
perspective of the telecommunication in India .The strength of the exploratory research
design lies in its ability of lower costs, ease of implementation and liability to generate results
in a short period of time.
Data collection

Secondary data:-

The secondary data was collected through the secondary sources like companies
records, company websites, magazine,and Newspaper.

THE CONTRIBUTION OF TELECOMMUNICATION IN THE

GROWTH PERFORMANCE OF GDP OF INDIA

In the 21st century , the telecommunication sector has become pivotal to a country's socio-
economic development. Over the years the sector has become a significant contributor of the
country's GDP. Currently , India is the world's second- largest telecommunication market
with a subscriber base of 1.16 million. The Indian mobile economy is growing rapidly and is
contributing substantially to India's Gross Domestic Product according to a report prepared
by GSM Association ( GSMA).The industry has also been one of the fastest growing sectors
in the country with a compound annual growth rate (CAGR) of 7.3 percent over the last
decade.
In 2015 according to one estimate , it contributed 6.5 percent to India's GDP while in the year
2019 India surpassed the US to become the second largest market.
No other sector of the economy has clocked such a high rate of growth . The sector accounts
for about 4 percent of GDP and therefore with this rather high rate of growth contributes
about 11 percent of the growth in overall GDP of the country . According to the report the
total spending on information and communication technology (ICT) by India about 63
percent is in communications .

The pace of transformation of the industry over the course of time has been astonishing. It all
began in September 2016 with the entry of Reliance Jio into the telecom fray which was
already saturated with telecom giants like Vodafone India , Bharti Airtel , BSNL , Idea
Cellular along with other small players. The most significant impact of Jio's entry was its
effect on the increasing mobile and data accessibility . The Indian telecom was adding an
average of 54 million wireless and 50 million internet subscribers each year until mid 2016 as
per TRAI reports . In contrast the industry added over 150 million wireless and 80 million
internet subscribers.
An ICRIER study pointed out that a 10 percent increase in the rate of growth of internet
subscribers will result in a 2.4 percent increase in GDP's rate .
Therefore telecommunications diffusion increases the GDP of the country.

Price variation in the Telecom Sector of India.

India's telecommunications sector is not only one of the largest in the world but also one of
the fastest growing networks in the world. The increase in subscriptions was not surprising,
with about 20 million per month. In the first decade of the 21st century, enrollment grew by
33 percent annually.

In September 2016, the market saw the disruptive entry of Reliance Jio into voice and data
services using 4G technology. Data prices saw a sharp decline from Rs. 180 per GB in
September 2016 to Rs. 160 per GB per December Market Income and Exit 4 2016 and land
prices up to Rs. 6.98 per GB in 2019.3 While growth has been strong, price competition has
put a strain on the line of workers. Lowering costs and improving survival, smaller players
are available, while larger operators such as Vodafone and Idea are integrated.
As prices in the industry, measured by average per capita income (ARPU) decline, use of two
minutes of voice and GB of data has increased. Data growth rates were very high, indicating
a low base. While the Minimum of Use (MoU) increased by 12 per cent between 2014 and
2019, data usage per subscription per month increased by CAGR by 76 percent on same time.

Internationally, India offers the cheapest data compared at current market exchange rates.
Mobile data tariff published by UK-based cable.co.uk using 6,313 data plans across 230
countries estimates the price per GB for data in India to be USD 0.16. Even at Purchasing
Power Parity (PPP) exchange rates, the tariffs in India are lower than several other countries
including Brazil, Russia, China, Canada, EU and the US. For instance, the average cost of 1
GB data in PPP terms is USD 12.37 in USA, USD 23.39 in Russia, USD 41.45 in China,
USD 14.35 in Canada and USD 7.86 in Brazil.
Revenue variation in Indian Telecom Industry

High costs of spectrum acquisition, as mentioned above, and the demands of network
upgradation had increased the industry debt burden. Technological disruption and tariff
competition triggered by the entry of Reliance Jio jointly aggravated the financial distress
reflected in the unprecedented decline in revenue of the industry through the years 2017 and
2019. The average revenue of the industry decreased from 5.49 per cent in 2012-2013 to 2.51
per cent in 2015-2016 which further declined to -2.82 per cent in 2018-2019. The industry
estimates for weighted average Return on Equity (ROE) decreased from 7.46 per cent in
2015-2016 to -7.59 per cent in 2017-2018.
CONCLUSION

Therefore, it can be concluded that the Indian Telecom Industry plays a major role in the
socio-economic development of India. It is an important tool in the growth of the nation.
Various telecommunications service providers provide voice and data services to customers
in various regions of the country including urban and rural areas thus helping the growth of
the industry.
India's telecommunications industry is the second largest in the world with a base of 1.17
million subscribers. It has the lowest cost of telecommunications in the world powered by
telecommunications operators and competition among them. India's largest
telecommunications industry, the telecommunications, internet and television industry in the
world is in the process of transforming the next generation of networks, using a wide range of
modern network technologies such as digital telephone exchanges, mobile switching stations,
media gateways and digital multimedia gateways. -optic or microwaves that transmit
networks. The access network, which connects the subscriber to the context, is largely
divided into dual copper technology, optic-fiber and wireless technology. DTH, a relatively
new streaming technology, has gained much popularity in the television segment. The
number of broadband subscribers increased to 765.1 million in February 2021. Also, the
number of online subscribers increased to 778.09 million by March 2021. The government
has emphasized strengthening the capacity of India's home telecommunications system.
Revenue from the telecom services sector is expected to grow to US $ 26.38 billion by 2020
worldwide. The overall IP traffic is also expected to grow four times to the 30% CAGR by
2021. Telecom has supported social and economic development in India and has played a key
role in reducing digital and urban digital segregation to some extent. It has also helped to
increase the transparency of governance through the introduction of e-governance in India.
REFERENCES

● ​Media Reports and Press Releases, Cellular Operators Authority of India (COAI),
Telecom Regulatory Authority of India (TRAI), Department of Telecommunication
(DoT), Department for Promotion of Industry and Internal Trade (DPIIT), India
Services Sector Report by Deloitte.
● Annual Report 2014-15, Department of Telecommunications, New Delhi. Retrieved
from: http://www.dot.gov.in/reportsstatistics/annual-report-2014-15-0.
● Annual Report 2011-12, Telecom Regulatory Authority of India, Delhi. Retrieved
from:http://www.trai.gov.in/..../201301150318386780062Annual%20Report%20En.
● http://www.ibef.org
● http://m.economictimes.com
● http://niti.gov.in
● https://www.cci.gov.in/sites/default/files/whats_newdocument/Market-Study-on-the-T
elecom-Sector-In-India.pdf