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INDIAN TELECOM

INDUSTRY

Presented By:
Megha Bhardwaj (141)
Sakshi Jindal
Lovely Khurana (121)

Aditya Verma(117)
Gurcharan Singh Kohli (131)
Somya Singhal

TelecommunicationIntroduction
• Telecommunications is a general term for a vast array of
technologies that send information over distances. Mobile
phones, land lines, satellite phones and voice over internet
protocol  are a field of telecommunications. Radio, television
and networks are a few more examples of telecommunication.
• Telecommunications was first introduced in India in 1851 when
the first operational land lines were laid by the government
near Kolkata.
• The Indian telecom sector was entirely under government
ownership until 1984, when the private sector was allowed in
telecommunication equipment manufacturing only. The
government made its efforts towards developing R&D in the
sector by setting up an autonomous body – Centre for
Development of Telematics (C-DOT) in 1984.

there are around a dozen telecom service providers who operate in the wired and wireless segment. • Currently. and continuous price wars. . • The telecom sector in India experienced a rapid growth over the past decade on account of regulatory liberalisation. making telecom one of the major catalysts in India’s growth story.Characteristics • India's telecommunication network is the second largest in the world based on the total number of telephone users. structural reforms and competition. • The Indian telecom industry is characterised with intense competition.

both public sector players as well as the private sector players are actively catering to the rapidly growing telecommunication needs in India. . Private participation is permitted in all segments of the telecom industry.INDUSTRY STRUCTURE Current Structure of the Indian Telecom Industry : Currently.

.INDUSTRY STRUCTURE • Public Sector: After the privatisation only two premier PSUs. it is mainly active in the wireless segment. Some of the private players are VIRGIN MOBILE and UNINOR. MTNL and BSNL operate in India and provide various telecom services. The fixed lines account for only about 2% of private sector's total subscriber base. these PSUs not only have made significant progress but also have provided stiff competition to their private counterparts. MTNL operates in Delhi and Mumbai and BSNL provides services to the remaining country. In the post-liberalisation era. • Private Sector: The private sector is instrumental in providing both fixed line as well as wireless services.

. commercial units and to service providers such as public call offices.SEGMENTS IN TELECOM INDUSTRY Broadly the Indian telecommunication industry can be classified into the following segments: • Wireline services • Internet services • Wireless service: GSM and CDMA Wireline Services • The wireline segment includes basic wireline services rendered to households.

INDIAN TELECOM SERVICE PROVIDERS .

dominate the wireless segment. which account for 73% of the total subscriber base of the wireless service. 5. The GSM services. Tata Teleservices Ltd. BSNL MTNL Bharti Airtel Ltd. 4. 3.List of wireline service providers : 1. 2. Wireless services can be further divided into Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). . Reliance Wireless services •.

Vodafone-Essar. • The GSM sector is dominated by players such as Airtel. and Idea Cellular. while the CDMA sector is dominated by Reliance and Tata Indicom. .92 million followed by Vodafone-Essar. • Only Reliance Communication and Tata Teleservices offer both GSM and CDMA networks. The private players account for around 86% of the total wireless subscriber base. • Reliance Communication is the largest CDMA mobile operator.• Private sector players have played an important role in the rapid growth of the wireless segment. Bharti Airtel is the largest GSM mobile operator in India and has a subscriber base of 93. BSNL and Idea Cellular.

 Bharti Airtel Ltd has the highest internet subscriber base followed by Reliance Communications Infrastructure Ltd. • A significant improvement has also been seen in the quality of internet services given the substantial up gradation of telecom infrastructure. • The public sector players dominate the internet market accounting for almost 69. Among the public sector players.69% • Among the private players. BSNL rules the internet provision market with a market share of around 53.30% of the total internet subscriber base.61% followed by MTNL that accounted for 15.Internet Services • Internet services in India have witnessed significant growth in the last few years owing to increased presence of the private players and emergence of new technologies. .

including 904.01%.95%. • Urban tele-density is 145.46%. • The country has 933. • Overall tele-density in the country is 75.13%. whereas rural teledensity is 44.87 million. • The share of wireless telephones in total telephones is 96.23%. .Present Status of Indian Telecom Industry • Indian telecom network is the second largest in the world after China.02 million telephone connections. • The share of private sector in total telephones is 87. • Number of Broadband connections is 60.52 million wireless telephone connections.

Future Prospects of the Telecom Industry • Include increase in rural tele-density to 70 per cent by the year 2017 and 100 per cent by the year 2020 • Million broadband connections by 2017 and 600 million by the year 2020 • Providing minimum 2 Mbps download speed and making available higher speeds of at least 100 Mbps on demand • Long-term spectrum availability. spectrum efficiency .

the telecom industry has received more investments and has implemented higher technology. Postliberalisation. • Increasing Affordability of Handsets The manufacturers introduced lower-priced handsets with add-on facilities to cater to the increasing number of subscribers from different strata of the society.Factors Influencing Growth of the Industry • Libralisation It has led the industry on a high growth and have increased the level of competition. .

increasing literacy levels and higher adaptability to technology. which have seen a sharp drop in the tariff like outgoing calls are charged at less than a rupee per minute. urbanisation.• Changing Demographic Profile The changed profile is characterised by a large young population. advancement in technology. • Increased Competition & Declining Tariffs The ever-increasing competition has led to high growth of subscribers and has put pressure on tariffs. a middle class with growing disposable income. An improved network coverage. . and growing data services have also driven the growth of the industry.

A higherthan-expected decline in ARPU poses a risk of reduction in margins of service providers. • Lack of Telecom Infrastructure As many rural areas in India lack basic infrastructure such as road and power. developing telecom infrastructure in these areas involve greater logistical risks and also extend the time taken to roll out telecom services.Challenges of the Industry • Fall in ARPU (Average Revenue Per Unit) Intense competitive pressure and cut throat pricing has resulted in declining ARPUs. .

• Spectrum Allocation Lack of adequate spectrum which is the most integral part of the mobile telephony sector could hamper its growth severely. The auction of 3G licenses and the introduction of mobile number portability (MNP) are the reason to heat up competition in the industry.• Excessive Competition The Indian wireless market is one of the world’s most competitive markets with 6-8 competitors in their circle. there exists a risk of delay in allotment of proposed spectrum to the service providers who have successfully bid for the 3G spectrum. Irrational bidding of the service providers might render 3G services financially-unviable. . Further.

. The intensifying price war could put significant downward pressure on the industry revenue growth.• Price War Between the Service Providers The pricing strategy of per second billing already has taken the price war between telecom operators to the next level.

. that is. Remove consumer complaints. to ensure availability of telephone on demand as early as possible • To achieve universal service covering all villages at affordable and reasonable prices • To ensure world-class telecom services.New Telecom Policy 1999 The main objectives of the policy were: • To ensure telecommunication is within the reach of all. resolve disputes and encourage public interface and provide a wide permissible range of services to meet the demand at reasonable prices • To ensure that India emerges as a major manufacturing base and major exporter of telecom equipment • To protect the defense and security interests of the nation.

UNIFIED LICENSE To achieve the objective of NTP-2012 to create one nation .one license across services and service areas. the Department of Telecom (DoT) has issued guidelines on Unified License.NATIONAL TELECOM POLICY 2012 Major initiatives taken by the Government (NTP2012) to boost investment and employment opportunities in the telecom sector are: 1. Only one Unified License is required for all telecom services in entire country. .

MERGER AND AMALGAMATION POLICY This will facilitate transfer of license consequent to merger. Auction of spectrum in 900 MHz band and 1800 MHz band was conducted during February. The market share limit for transfer and merger of licenses has been increased to 50% from existing 35% 3. . 2014. Spectrum was put for auction in Delhi. Mumbai and Kolkata service areas and all were sold out.2. amalgamation and acquisition of various companies for different services in different service areas. SPECTRUM AUCTION NTP-2012 envisages adequate availability of spectrum and its allocation in a transparent manner through market related process.

.4. FOREIGN DIRECT INVESTMENT POLICY To attract FDI inflow and make the sector more attractive and investor friendly. Government raised FDI limit for the telecom services from 74% to 100%. It will facilitate telecom licensees to consolidate equity and raise domestic as well as foreign debt from the market.