Indian Telecom Journey

Bigger hit than any Bollywood movie

Topics
 The Journey so far!

 Where it stands today?

 What Next?

Telecom India DailyTM

Organizational changes
 1854:A regular, separate department was opened, when
telegraph facilities were thrown open to the public.
 Dr. O'Shaughnessy was the first Superintendent of Electric
Telegraphs in India and later became the first Director
General.
 1914: World War I, Postal Department and the Telegraph
Department were amalgamated under a single Director-
General.
 1st April, 1950: In 1950 the number of Telephone Exchanges
absorbed from princely states was 196.
 The installed capacity of these 196 exchanges was 13,362
lines with 11,296 working connections.

Telecom India DailyTM

Organizational changes
 1981:Prime Minister Indira Gandhi signed contracts with of
France to merge with the state owned Telecom Company
(ITI), in an effort to set up 5,000,000 lines per year.
 January 1985: two separate Departments for the Posts and
the Telecommunications were created.
 1986 : Mahanagar Telephone Nigam Ltd. (MTNL) was
created.
 1989:The Telecom Commission was constituted.
 January 1997: Telecom Regulatory Authority of India (TRAI)
was formed.
 1st October 2000:Department created BSNL, a new entity to
operate services in different parts of the country as a public
sector unit.

Telecom India DailyTM

Policy Changes
 1986:Department reorganized the Telecommunication Circles
with the Secondary Switching Areas as basic units.
 1994 : First National Telecom Policy was introduced and the
sector was opened up for privatization.
 1998: First tariff order issued in –thus reforms effective from
1998.
 1999 : The second National Telecom Policy was introduced to
take the telecom sector to next level.
 2004 : The policy for Broadband was defined with the aim to
increase the internet penetration in India. Broadband was
define initially as 128 Kbps which was later changed to 256
kbps.

Telecom India DailyTM

Market Changes
 1985: First mobile telephone service started on non-
commercial basis in Delhi.
 1994 : India was divided into 20 telecom circles and today we
have 23 circles categorized as Circle – A, B & C.
 1995: GSM entered India. Historic first cell phone-call was
made by Mobile Net-joint venture between Telstra (Australia)
& B.K. Modi group. First call was made by Jyoti Basu.
 1996: Tata Teleservices was the first to launch CDMA mobile
services in India with the Andhra Pradesh circle.
 The sector was liberalized and private mobile operators began
their journey.

Telecom India DailyTM

Telecom Growth

Telecom India DailyTM

Topics
 The Journey so far!

 Where it stands today?

 What Next?

Telecom India DailyTM

 Indian Telecom Statistics

Indian Telecom Statistics Oct 09

Total telephone subscriber base 525.65
Over all Tele-density 44.87%
Fixed-line user base 37.25
Wireless user base 
(GSM+CDMA+WLL(F)) 488.4
GSM Subscribers 355.25
CDMA Subscribers 133.15
Monthly additions        (Wireline +
Wireless) 16.62
Monthly additions (Wireline) -0.02
Monthly additions (Wireless) 16.67
Broadband subscribers 7.4

Telecom India DailyTM

Existing Operators
Service Providers Technology
Bharat Sanchar Nigam Limited (BSNL) GSM, CDMA & Fixed Line

Bharti Airtel Limited (Airtel) GSM & Fixed Line

Reliance Communications Limited (RCOM) GSM, CDMA & Fixed Line

Vodafone Essar Limited (Vodafone-Essar) GSM

Idea Cellular Limited (Idea) GSM
Tata Teleservices Limited (TTSL) GSM, CDMA & Fixed Line
Tata Teleservices Maharashtra Limited (TTML) CDMA & Fixed Line
Mahanagar Telephone Nigam Limited (MTNL) GSM, CDMA & Fixed Line
Aircel Cellular Limited (Aircel) GSM
Reliance Telecom GSM
Loop Mobile Limited (Loop mobile) GSM
HFCL Infotel Limited (HFCL) CDMA & Fixed Line

Telecom India DailyTM

New Players
Name Operation Started

Datacom Solutions Pvt. Ltd. Not Yet

Etisalat DB Telecom Pvt. Ltd. Not Yet

Loop Telecom Private Ltd. T.N., Orissa, Karnataka, Kerala

Reliance Communications GSM service launched in all new licensed

Limited areas.
S Tel Ltd. Not Yet
T. N., Kerala, Kolkata, West Bengal and
Sistema Shyam Teleservices
Bihar.
Chennai, Karnataka, Kerala, Orissa, T.N.,
Tata Teleservices Limited
Andhra Pradesh

Unitech Wireless Pvt. Ltd. Not Yet

Telecom India DailyTM
M & As (1998-2005)

Telecom India DailyTM

M & As (2005-2008)

Telecom India DailyTM

 Market Statistics – 2008-09
Revenue Revenue Growth
Category Telecom Services Performance 2008-09
(Bn) (Bn) (%)
FY 2007- FY 2008- FY 2007-08 FY 2008-09 Growth %
   y-o-y
08 09
1200.0
Fixed line 266.92 246.49 -7.6
952.7
1000.0
Wireless 766.08 952.71 24.4 766.1
800.0
NLD 97.32 144.32 48.2
ILD 115.32 150.00 30 600.0

evenue(Bn)
Broadband 53.59 75.00 39.9 400.0
266.9
246.5
R

200.0 144.3 150

VSAT 6.00 6.50 8.3 97.3 115.3
24.4 53.6 75 6 6.5 0.38 0.4
30
Radio 0.0
0.38 0.40 5.2 -7.6 48.2 39.9 8.3 5.2
Trunking Fixed line Wireless NLD ILD Broadband VSAT Radio
TOTAL 1305.61 1575.42 20.7 -200.0 Trunking

Telecom India DailyTM

New Initiatives
 Reasons for high growth are changes or initiatives taken in
the recent years.

1. One Indian Plan launched in 2006 heated up the price war in

India.
2. New Licenses given by Government in 2008 added up in
ongoing competition – 120 new licenses awarded.
3. Lowest tarrifs in the world with local calls reaching 10
paise/min and STD tarrifs dropping to 50 paise/min from high
tarrifs of 17 Rs/min in 1994
4. Reduction in Handset prices has made mobile a common
weapon tool.

Telecom India DailyTM

Topics
 The Journey so far!

 Where it stands today?

 What Next?

Telecom India DailyTM

Market Forecast - 2012
 Total subscribers to reach 700 million.
 Wireless users will reach 640-650 million.
 Fixed line will dwindle around 45-50 million.
 Telecom services revenue will reach 54 USD billion.
 Rural sector will be the key driver with potential of increasing
tele-density from 15 % today to 40% in coming years.
 Data revolution to be fuelled by 3G & WiMAX with 25-30
million 3G subscribers and WiMAX touching user base of 8-10
million.
 Internet users to reach 45 million; Broadband users to reach
25-30 million and Mobile internet users to reach 196 million.

Telecom India DailyTM

Challenges for Operators
Decline in Tariffs Falling ARPU

400
350
300
250
200

s
R.
150
100
50
0
Jun' 06 Sep' 06 Dec' 06 Mar' 07 Jun' 07 Sep' 07 Dec' 07 Mar' 08 Jun' 08 Sep' 08 Dec' 08 Mar' 09

GSM ARPU CDMA ARPU

Telecom India DailyTM

 Innovation will be key
 New Innovative ideas Mobile VAS will evolve with new technologies
and services will hold the and an operator with good service portfolio will
key for telecom operators command the market
to generate revenue and
sustain in this competitive
market.
 Convergence of Mobile,
fixed line & internet will
give rise to new services.
 Fixed Line will be saved
by Broadband, IPTV and
VoIP services.
 Mobile will see new
technologies like 3G, 4G
(LTE) and WiMAX.
Telecom India DailyTM
Thanks!
 Sources
 DOT
 TRAI
 COAI & AUSPI
 Ernest & Young
 IMRB
 BDA
 Telecom India Daily (internal research)
 ……..open internet

Telecom India DailyTM