FDI in Telecom sector in India.

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Evolution of Telecom in India.

Initial phase of telecom reforms began in 1984. Indian telecom sector was setting up of an independent regulatory body in 1997, Telecom Regulatory Authority of India (TRAI).

FDI in Telecom in India

FDI inflow from August 1991 to March 2010 in the telecommunication sector amounted to US$ 131,220 million. Third-largest sector to attract FDI in India. India has 100% FDI allowed in the networking components and 74% FDI in telecom services.

Recent FDIs in Telecom sector

DOCOMO Vodafone Essar Aircel

Government Initiatives

FDI in telecom services has been raised to 74% Introduction of unified access licensing for telecom services on a pan-India basis. Foreign telecom companies can bid for 3G spectrum without partnering with Indian companies.

Targets Set By the Government

1. Network expansion
a. 500 million connections by the year 2010. b. Provision of mobile coverage of 90% geographical area by 2010. 2. Rural telephony a. 2 One phone per two rural households by 2010 (about 80 million rural connections). b. 200 million rural subscribers by 2012 c. Reduce urban-rural digital divide from present 25:1 to 5:1 by 2010.

Contd
3. Broadband a. 20 million Broadband connections by 2010 b. Broadband with minimum speed of 1 mbps. 4. Introduction of Spread of IPTV and Mobile TV

a. IPTV in 600 towns by 2010.

Contd.
5. Manufacturing Achieving exports of 10 billion during 11th Five year plan. 6. Research & Development a. Pre-eminence of India as a technology solution provider. b. Comprehensive security infrastructure for telecom network.

Industry Attractiveness

SWOT Analysis

Strengths: 1.Enormous customer base 2.Adoption of new technology Weakness: 1.Weak Infrastructure 2.Limited spectrum availability

Contd

Opportunities: 1.Emerging Technologies 2.Rural telephony Threats: 1.Conflict between DoT and TRAI 2.Number of operators per circle, are increasing, hence more competition. 3.Cost per customer is very high in rural areas.

Poters 5 force model

New Entrants

Rivals
Bargaining power of Supplier Industry

Among
Bargaining power of Buyer

Compititors

Substitutes

RECENT TRENDS IN TELECOM SECTOR

Rank in world in network size 3rd

Teledensity (per hundred populations)

36.98

Telephone connection (In million)

Fixed Mobile Total Village Public Telephones Covered (Out of 66,822 uncovered villages) Foreign Direct Investment (in million) (from January 2000 till 275,441 37.96 391.76 429.72 57,167

January 2009)

Future holds for FDIs

Managed services Infrastructure sharing Enterprise Telecom Services WiMAX Value Added Services

Conclusion

Increase FDI capitalisation More value added services Technological improvement Efficient Management of available spectrum

Thank you.