Indian Telecommunications

Indian telecommunication industry
An industrial analysis report of

On
INDIAN TELECOMMUNICATION INDUSTRY
A company analysis report submitted in partial fulfillment of

The requirement for the award of the degree of
Master of business administration
By
V.v.phanidhara setty
Regd.no. 08091E0030
Under the esteemed guidance of
Mr. Mallikarjuna .V
M.B.A., P.HD
Estd.1995
DEPARTMENT OF MANAGEMENT STUDIES

Rajeev Gandhi Memorial college of Engg. &Tech.
Approved by A.I.C.T.E, New Delhi, Accredited by NBA,
Affiliated to JNT University, Anantapur
Nandyal-518501.
2008-2010
12/31/2009DEPT OF MANAGEMENT, RGMCET

CERTIFICATE
This is to certify that Mr. V.v.phanidhara setty had undergone an

Industry analysis report on INDIAN TELECOMMUNICATION
INDUSTRY .and submitted to the department of management
studies, RGMCET, Nandyal
Place:
Date:
Signature of
Head of the department

INDIAN TELECOMMUNICATIONS
S.NO CONTENTS PAGE NO

1 INTRODUCTION 1-6
1.1introduction of telephone
1.2industry capacity
1.3emergence as a major player in India
1.4liberalization
1.5revenue and growth
1.6tariff changes
2 MARKET CONDITIONS 7-16

2.1 major market trends
2.2 demand analysis
2.3 targets set by governments
2.4 major players
2.5 market shares
2.6 entry barriers
2.7 segments
3 ENVIRONMENTAL FACTORS 17-25

3.1 government polices & regulations
3.2 foreign direct investment
3.3 technology
3.4 research and development
3.5 mobile number portability
4 KEY PLAYERS 26-39

4.1 Bharti AIRTEL
4.2 BSNL
4.3 IDEA cellular
4.4 Reliance communications
5 CONCLUSION 40-42
5.1 investment opportunities and incentives
5.2 network expansion
5.3 trends in Tele-density
5.4 Rural telephony
5.5 Opportunities
5.6 swot analysis

1. INTRODUCTION
Indian Telecommunication industry, with about 525.65 million mobile phone
connections (Oct 2009), is the third largest telecommunication network in the world and
the second largest in terms of number of wireless connections. For the past decade or so,
telecommunication activities have gained momentum in India. Efforts have been made
from both governmental and non-governmental platforms to enhance the infrastructure.
The idea is to help modern telecommunication technologies to serve all segments of
India’s culturally diverse society, and to transform it into a country of technologically
aware people.
1.1, Introduction of the telephone

In 1880, two telephone companies namely The Oriental Telephone Company Ltd. and
The Anglo-Indian Telephone Company Ltd. approached the Government of India to
establish telephone exchanges in India. The permission was refused on the grounds that
the establishment of telephones was a Government monopoly and that the Government
itself would undertake the work. By 1881, the Government changed its earlier decision
and a license was granted to the Oriental Telephone Company Limited of England for
opening telephone exchanges at Kolkata, Mumbai, Chennai (Madras) and Ahmedabad. 28
January 1882, is a Red Letter Day in the history of telephone in India. On this day Major
E. Baring, Member of the Governor General of India's Council declared open the
Telephone Exchange in Kolkata, Chennai and Mumbai. The exchange at Kolkata named
"Central Exchange" was opened at third floor of the building at 7, Council House Street.
The Central Telephone Exchange had 93 numbers of subscribers. Bombay also witnessed
the opening of Telephone Exchange in 1882.
Further developments
 1902 - First wireless telegraph station established between Saugor

Islands and Sandheads.
 1907 - First Central Battery of telephones introduced in Kanpur.
 1913-1914 - First Automatic Exchange installed in Shimla.
 23 July 1927 - Radio-telegraph system between the UK and India, with beam
stations at Khadki and Daund, inaugurated by Lord Irwin by exchanging greetings
with the King of England.
 1933 - Radiotelephone system inaugurated between the UK and India.
 1953 - 12 channel carrier system introduced.
 1960 - First subscriber trunk dialing route commissioned
between Kanpur and Lucknow.

 1975 - First PCM system commissioned between Mumbai City

and Andheri telephone exchanges.
 1976 - First digital microwave junction introduced.
 1979 - First optical fibre system for local junction commissioned at Pune.
 1980 - First satellite earth station for domestic communications established
at Secunderabad, A.P..
 1983 - First analog Stored Program Control exchange for trunk
lines commissioned at Mumbai.
 1984 - C-DOT established for indigenous development and production
of digital exchanges.
 1985 - First mobile telephone service started on non-commercial basis in Delhi.
While all the major cities and towns in the country were linked with telephones during
the British period, the total number of telephones in 1948 was only around 80,000. Even
after independence, growth was extremely slow. The telephone was a status symbol rather
than being an instrument of utility. The number of telephones grew leisurely to 980,000 in
1971, 2.15 million in 1981 and 5.07 million in 1991, the year economic reforms were
initiated in the country.
While certain innovative steps were taken from time to time, as for example introduction
of the telex service in Mumbai in 1953 and commissioning of the first [subscriber trunk
dialing] route between Delhi and Kanpur in 1960, the first waves of change were set
going by Sam Pitroda in the eighties.[12] He brought in a whiff of fresh air. The real
transformation in scenario came with the announcement of the National Telecom Policy
in 1994.
1.2, Industry capacity
Conservative estimates put a tag of a 3% increase in the growth of GDP for every 1% rise
in the tele-density in the nation. Accordingly, this sector has received a great thrust from
the government for investments and development

1.3, Emergence as a major player

In 1975, the Department of Telecom (DoT) was separated from P&T. DoT was
responsible for telecom services in entire country until 1985 when Mahanagar Telephone
Nigam Limited (MTNL) was carved out of DoT to run the telecom services
of Delhi and Mumbai. In 1990s the telecom sector was opened up by the Government for
private investment as a part ofLiberalisation-Privatization-Globalization policy. Therefore,
it became necessary to separate the Government's policy wing from its operations wing.
The Government of India corporatized the operations wing of DoT on 01 October 2000
and named it as Bharat Sanchar Nigam Limited (BSNL). Many private operators, such
as Reliance India Mobile, Tata Telecom, Vodafone, BPL,Bharti, Idea etc., successfully
entered the high potential Indian telecom market.
1.4, Liberalization of telecommunications in India

The Indian government was composed of many factions (parties) which had different
ideologies. Some of them were willing to throw open the market to foreign players (the
centrists) and others wanted the government to regulate infrastructure and restrict the
involvement of foreign players. Due to this political background it was very difficult to
bring about liberalization in telecommunications. When a bill was in parliament a
majority vote had to be passed, and such a majority was difficult to obtain, given to the
number of parties having different ideologies.
Liberalization started in 1981 when Prime Minister Indira Gandhi signed contracts
with Alcatel CIT of France to merge with the state owned Telecom Company (ITI), in an
effort to set up 5,000,000 lines per year. But soon the policy was let down because of
political opposition. She invited Sam Pitroda a US based NRI to set up a Center for
Development of Telematics(C-DOT); however the plan failed due to political reasons.
During this period, after the assassination of Indira Gandhi, under the leadership of Rajiv
Gandhi, many public sector organizations were set up like the Department of
Telecommunications (DoT) , VSNL and MTNL. Many technological developments took
place in this regime but still foreign players were not allowed to participate in the
telecommunications business.
The demand for telephones was ever increasing. It was during this period that the P.N Rao
led government introduced the national telecommunications policy [NTP] in 1994 which
brought changes in the following areas: ownership, service and regulation of
telecommunications infrastructure. They were also successful in establishing joint

ventures between state owned telecom companies and international players. But still
complete ownership of facilities was restricted only to the government owned
organizations. Foreign firms were eligible to 49% of the total stake. The multi-nationals
were just involved in technology transfer, and not policy making.
During this period, the World Bank and ITU had advised the Indian Government to
liberalize long distance services in order to release the monopoly of the state owned DoT
and VSNL; and to enable competition in the long distance carrier business which would
help reduce tariff's and better the economy of the country. The Rao run government
instead liberalized the local services, taking the opposite political parties into confidence
and assuring foreign involvement in the long distance business after 5 years. The country
was divided into 20 telecommunication circles for basic telephony and 18 circles for
mobile services. These circles were divided into category A, B and C depending on the
value of the revenue in each circle. The government threw open the bids to one private
company per circle along with government owned DoT per circle. For cellular service two
service providers were allowed per circle and a 15 years license was given to each
provider. During all these improvements, the government did face oppositions from ITI,
DoT, MTNL, VSNL and other labor unions, but they managed to keep away from all the
hurdles
After 1995 the government set up TRAI (Telecom Regulatory Authority of India) which
reduced the interference of Government in deciding tariffs and policy making. The DoT
opposed this. The political powers changed in 1999 and the new government under the
leadership of Atal Bihari Vajpayee was more pro-reforms and introduced better
liberalization policies. They split DoT in two- one policy maker and the other service
provider (DTS) which was later renamed as BSNL. The proposal of raising the stake of
foreign investors from 49% to 74% was rejected by the opposite political party and leftist
thinkers. Domestic business groups wanted the government to privatize VSNL. Finally in
April 2002, the government decided to cut its stake of 53% to 26% in VSNL and to throw
it open for sale to private enterprises. TATA finally took 25% stake in VSNL
This was a gateway to many foreign investors to get entry into the Indian Telecom
Markets. After March 2000, the government became more liberal in making policies and
issuing licenses to private operators. The government further reduced license fees
for cellular service providers and increased the allowable stake to 74% for foreign
companies. Because of all these factors, the service fees finally reduced and the call costs
were cut greatly enabling every common middle class family in India to afford a cell
phone.

1.5, Revenue and growth

The total revenue in the telecom service sector was Rs. 86,720 crore in 2005-06 as against
Rs. 71, 674 crore in 2004-2005, registering a growth of 21%. The total investment in the
telecom services sector reached Rs. 200,660 crore in 2005-06, up from Rs. 178,831 crore
in the previous fiscal.
Telecommunication is the lifeline of the rapidly growing Information Technology
industry. Internet subscriber base has risen to 6.94 million in 2005- 2006. Out of this 1.35
million were broadband connections.] More than a billion people use the internet globally.
Under the Bharat Nirman Programme, the Government of India will ensure that 66,822
revenue villages in the country, which have not yet been provided with a Village Public
Telephone (VPT), will be connected. However doubts have been raised about what it
would mean for the poor in the country.
It is difficult to ascertain fully the employment potential of the telecom sector but the
enormity of the opportunities can be gauged from the fact that there were 3.7 million
Public Call Offices in December 2005 up from 2.3 million in December 2004.
The value added services (VAS) market within the mobile industry in India has the
potential to grow from $500 million in 2006 to a whopping $10 billion by 2009.
Telephone
On landlines, intra circle calls are considered local calls while inter circle are considered
long distance calls. Currently Government is working to integrate the whole country in
one telecom circle. For long distance calls, you dial the area code prefixed with a zero (e.g.
for calling Delhi, you would dial 011-XXXX XXXX). For international calls, you would
dial "00" and the country code+area code+number. The country code for India is 91.
Until recently, only the PSU's BSNL and MTNL were allowed to provide Basic Phone
Service through copper wires in India. MTNL is operating in Delhi and Mumbai only and
all other parts are covered by BSNL. However private operators have now entered the fray,
although their focus is largely on the cellular business which is growing rapidly.
Telephony Subscribers (Wireless and Landline): 525.85 million (Oct 2009)

Cell phones: 488.4 million (Oct 2009)
Land Lines: 37.25 million (Oct 2009)
Monthly Cell phone Addition: 16.67 million (Oct 2009)

Teledensity: 44.85% (Oct 2009)

Projected Teledensity: 626 million, 46% of population by 2010.

1.6, Tariff Changes
The Indian Telecom Sector has witnessed major changes in the tariff structure. The
Telecommunication Tariff Order (TTO) 1999, issued by regulator (TRAI), had begun the
process of tariff balancing with a view to bring them closer to the costs. This
supplemented by Calling Party Pay (CPP), reduction in ADC and the increased
competition, has resulted in a dramatic fall in the tariffs. ADC has been abolished for all
calls w.e.f. 1st October 2008.
 The peak National Long Distance tariff for above 1000 Kms. in 2000 has come
down from US$ 0.67 per minute to US$ 0.02 per minute in 2009.
 The International Long Distance tariff from US$ 1.36 per minute in 2000 to
US$ 0.16 per minute in 2009 for USA, Canada & UK.
 The mobile tariff for local calls has reduced from US$0.36 per minute in 1999 to
US$ 0.009 - US$ 0.04 per minute in 2009.
 The Average Revenue Per User of mobile is between US$ 5.06 - US$ 7.82 per
month

2. MARKET CONDITIONS
2.1, MAJOR MARKET TRENDS

The telecoms trends in India will have a great impact on everything from the humble
PC, internet, broadband (both wireless and fixed), cable, and handset features, talking
SMS, IPTV, soft switches, and managed services to the local manufacturing and
Supply chain.
This report discusses key trends in the Indian telecom industry, their drivers and the
Major impacts of such trends affecting mobile operators, infrastructure and handset
Vendors.
Higher acceptance for wireless services
Indian customers are embracing mobile technology in a big way (an average of four
Million subscribers added every month for the past six months itself). They prefer
Wireless services compared to wire-line services, which is evident from the fact that
While the wireless subscriber base has increased at 75 percent CAGR from 2001 to
2006, the wire-line subscriber base growth rate is negligible during the same period.
In fact, many customers are returning their wire-line phones to their service
Providers as mobile provides a more attractive and competitive solution. The main
Drivers for this trend are quick service delivery for mobile connections, affordable
Pricing plans in the form of pre-paid cards and increased purchasing power among
The 18 to 40 years age group as well as sizeable middle class – a prime market for
This service.
Some of the positive impacts of this trend are as follows. According to a study, 18
Percent of mobile users are willing to change their handsets every year to newer
Models with more features, which is good news for the handset vendors. The other
Impact is that while the operators have only limited options to generate additional
Revenues through value-added services from wire-line services, the mobile operators
Have numerous options to generate non-voice revenues from their customers.
Some examples of value-added services are ring tones download, colored ring back
tones, talking SMS, mobisodes (a brief video programme episode designed for
Mobile phone viewing) etc. Moreover, there exists great opportunity for content
Developers to develop applications suitable for mobile users like mobile gaming,
Location based services etc. On the negative side, there is an increased threat of
Virus – spread through mobile data connections and Bluetooth technology – in mobile
Phones, making them unusable at times. This is good news for anti-virus solution
Providers, who will gain from this trend.
MERGERS
Demand for new spectrum as the industry grows and the fact the spectrum allocation
In done on the basis of number of subscribers will force companies to merge so as to
Claim large number of subscribers to gain more spectrum as a precursor to the
Launch of larger and expanded services. However it must also be noted that this may
Very well never happen on account of low telecom penetration.
NEW CIRCLES
As mentioned earlier there is a significant number of tier-2 and tier 3 cities that can
accommodate more players we expect aggressive response by the companies to such
opportunities as and when they are created.

2.2, Demand Analysis

Real and Nominal Growth & Supply/Demand Analysis
Indian telecom continues to register a significant growth in the current fiscal year. This
has been due to the impact of economic reforms and pro-active policies of the government.
Today, Indian telecom network with about 364 million connections in October 2008 is
the third largest in the world .Indian telecom has achieved another milestone as it has
become the second largest wireless network in the world by surpassing USA. With the
current pace, where about nine million telephones are being added every month, the
target of 500 million connections by 2010 is well within our reach.
The total number of telephones has increased from 76.53 million on March 31, 2004 to
363.95 million on October 31 2008. While 94.63 million telephones were added during
the twelve months of 2007-08, about more than nine million subscribers are being added
every month during the current fiscal year. Tele- density has also increased from 12.7 per
cent in March 2006 to 31.50 per cent in October 2008. Rural Teledensity increased to 13.4
per cent in October 2008 with 109.05 million rural telephone connections. Urban
Teledensity on the other hand has been 74.61 per cent in October 2008.
The growth of wireless services has been phenomenal, with wireless subscribers growing
at a compound annual growth rate (CAGR) of 87.7 per cent per annum since 2003. The
share of private sector in total telephone connections is now 77.44 per cent as per the
latest statistics available for October 2008 as against a meager 5% in 1999.
Rural telephones have gone up from 12.3 million in March 2004 to 109.05 million in
October 2008 with a Teledensity of 13.04%. The target of 100 million rural telephones by
2010 has been achieved well in advance.
It is also envisaged that internet and broad-band subscribers will increase to 40 million
and 20 million, respectively, by 2010. As per the latest available statistics for September
2008, about 5.7% villages have broadband coverage and the number of rural broadband
connections is 1.55 lakh.
Foreign direct investment (FDI) is one of the important sources to meet the huge funds
that are required for rapid network expansion. The FDI policy provides an investor-
friendly environment for the growth of the telecom sector. The policy of the Government
of India is to strive to maximize the developmental impact and spin-offs of FDI. At
present, 74% to 100% FDI is permitted for various telecom services. The total FDI
equity inflows in telecom sector have been 1261 million USD during 2007-08.
The government is now looking forward to achieve the target of 600 million telephone
subscribers by the end of Eleventh Plan and to achieve rural Teledensity of 25% by means
of 200 million rural connections at the end of 11th Plan. It is also envisaged that internet
and broad-band subscribers will increase to 40 million and 20 million, respectively, by
2010.
2.3, TARGETS SET BY THE GOVERNMENT
1. Network expansion
· 500 million connections by the year 2010.
· Provision of mobile coverage of 90% geographical area by 2010.
2. Rural telephony
· 2 One phone per two rural households by 2010 (about 80 million rural
connections).
. 200 million rural subscribers by 2012
· Reduce urban-rural digital divide from present 25:1 to 5:1 by 2010.
3. Broadband
. 20 million Broadband connections by 2010
· Broadband with minimum speed of 1 mbps.
· Broadband coverage for all secondary & higher secondary schools and public
health care centres by the end of year 2010.
· Broadband coverage for all Grampanchayats by the year 2010
. Broadband on demand is every village by 2012
4. Infrastructure Sharing
· USO subsidy support scheme for shared wireless infrastructure in rural areas with
about 19,000 towers by 2010.
· Increase sharing in urban areas to 70% by 2010.
5. Introduction of Spread of IPTV and Mobile TV
· IPTV in 600 towns by 2010.

2.4, MAJOR PLAYERS
There are three types of players in telecom services:
• -State owned companies (BSNL and MTNL)
• -Private Indian owned companies (Reliance Infocomm, Tata Teleservices,)
• -Foreign invested companies (Vodafone -Essar, Bharti Tele-Ventures, Escotel, Idea

Cellular, BPL Mobile,)
BSNL
On October 1, 2000 the Department of Telecom Operations, Government of India became

a corporation and was renamed Bharat Sanchar Nigam Limited (BSNL). BSNL is now
India’s leading Telecommunications Company and the largest public sector undertaking.
It has a network of over 45 million lines covering 5000 towns with over 35 million
telephone connections. The state-controlled BSNL operates basic, cellular (GSM and
CDMA) mobile, Internet and long distance services throughout India (except Delhi and
Mumbai). BSNL will be expanding the network in line with the Tenth Five-Year Plan
(1992-97). BSNL, which became the third operator of GSM mobile services in most
circles, is now planning to overtake Bharti to become the largest GSM operator in the
country. BSNL is also the largest operator in the Internet market, with a share of 21 per
cent of the entire subscriber base.
BHARTI AIRTEL
Established in 1985, Bharti has been a pioneering force in the telecom sector with many
firsts and innovations to its credit, ranging from being the first mobile service in Delhi,
first private basic telephone service provider in the country, first Indian company to
provide comprehensive telecom services outside India in Seychelles and first private
sector service provider to launch National Long Distance Services in India. Bharti Tele-
Ventures Limited was incorporated on July 7, 1995 for promoting investments in
telecommunications services. Its subsidiaries operate telecom services across India.

Bharti’s operations are broadly handled by two companies: the Mobility group, which
handles the mobile services in 16 circles out of a total 23 circles across the country; and
the Infotel group, which handles the NLD, ILD, fixed line, broadband, data, and satellite-
based services. Together they have so far deployed around 23,000 km of optical fiber
cables across the country, coupled with approximately 1,500 nodes, and presence in
around 200 locations. The group has a total customer base of 6.45 million, of which 5.86
million are mobile and 588,000 fixed line customers, as of January 31, 2004. In mobile,
Bharti’s footprint extends across 15 circles. Bharti Tele-Ventures' strategic objective is “to
capitalize on the growth opportunities the company believes are available in the Indian
telecommunications market and consolidate its position to be the leading integrated
telecommunications services provider in key markets in India, with a focus on providing
mobile services”.
MTNL
MTNL was set up on 1st April 1986 by the Government of India to upgrade the quality of
telecom services, expand the telecom network, and introduce new services and to raise
revenue for telecom development needs of India’s key metros – Delhi, the political capital,
and Mumbai, the business capital. In the past 17 years, the company has taken rapid
strides to emerge as India’s leading and one of Asia’s largest telecom operating
companies. The company has also been in the forefront of 5 technology induction by
converting 100% of its telephone exchange network into the state-of-the-art digital mode.
The Govt. of India currently holds 56.25% stake in the company. In the year 2003-04, the
company's focus would be not only consolidating the gains but also to focus on new areas
of enterprise such as joint ventures for projects outside India, entering into national long
distance operation, widening the cellular and CDMA-based WLL customer base, setting
up internet and allied services on an all India basis. MTNL has over 5 million subscribers
and 329,374 mobile subscribers. While the market for fixed wireline phones is stagnating,
MTNL faces intense competition from the private players—Bharti, Hutchison and Idea
Cellular, Reliance Infocomm—in mobile services. MTNL recorded sales of Rs. 60.2
billion ($1.38 billion) in the year 2002-03, a decline of 5.8 per cent over the previous
year’s annual turnover of Rs. 63.92 billion.

Vodafone
Vodafone’s presence in India dates back to late 1992, when they worked with local
partners to establish a company licensed to provide mobile telecommunications services
in Mumbai. Commercial operations began in November 1995. Between 2000 and March
2004, Hutch acquired further operator equity interests or operating licenses. With the
completion of the acquisition of BPL Mobile Cellular Limited in January 2006, it now
provides mobile services in 16 of the 23 defined license areas across the country.
Vodafone India has benefited from rapid and profitable growth in recent years. It had over
17.5 million customers by the end of June 2006.
IDEA
Indian regional operator IDEA Cellular Ltd. has a new ownership structure and grand
designs to become a national player, but in doing so is likely to become a thorn in the side
of Reliance Communications Ltd. IDEA operates in eight telecom “circles,” or regions, in
Western India, and has received additional GSM licenses to expand its network into three
circles in Eastern India -- the first phase of a major expansion plan that it intends to fund
through an IPO, according to parent company Aditya Birla Group .
RELIANCE INFOCOMM
Reliance is a $16 billion integrated oil exploration to refinery to power and textiles
conglomerate (Source: http://www.ril.com/newsitem2.html). It is also an integrated
telecom service provider with licenses for mobile, fixed, domestic long distance and
international services. Reliance Infocomm offers a complete range of telecom services,
covering mobile and fixed line telephony including broadband, national and international
long distance services, data services and a wide range of value added services and
applications. Reliance IndiaMobile, the first of Infocomm's initiatives was launched on
December 28, 2002. This marked the beginning of Reliance's vision of ushering in a
digital revolution in India by becoming a major catalyst in improving quality of life and
changing the face of India. Reliance Infocomm plans to extend its efforts beyond the
traditional value chain to develop and deploy telecom solutions for India's farmers,
businesses, hospitals, government and public sector organizations. Until recently,
Reliance was permitted to provide only “limited mobility” services through its basic
services license. However, it has now acquired a unified access license for 18 circles that

permits it to provide the full range of mobile services. It has rolled out its CDMA mobile
network and enrolled more than 6 million subscribers in one year to become the country’s
largest mobile operator. It now wants to increase its market share and has recently
launched pre-paid services. Having captured the voice market, it intends to attack the
broadband market.
TATA TELESERVICES
Tata Teleservices is a part of the $12 billion Tata Group, which has 93 companies, over
200,000 employees and more than 2.3 million shareholders. Tata Teleservices provides
basic (fixed line services), using CDMA technology in six circles: Maharashtra (including
Mumbai), New Delhi, Andhra Pradesh, Tamil Nadu, Gujarat, and Karnataka. It has over
800,000 subscribers. It has now migrated to unified access licenses, by paying a Rs. 5.45
billion ($120 million) fee, which enables it to provide fully mobile services as well. The
company is also expanding its footprint, and has paid Rs. 4.17 billion ($90 million) to
DoT for 11 new licenses under the IUC (interconnect usage charges) regime. The new
licenses, coupled with the six circles in which it already operates, virtually gives the
CDMA mobile operator a national footprint that is almost on par with BSNL and Reliance
Infocomm. The company hopes to start off services in these 11 new circles by August
2004. These circles include Bihar, Haryana, Himachal Pradesh, Kerala, Kolkata, Orissa,
Punjab, Rajasthan, Uttar Pradesh (East) & West and West Bengal.

2.5, Market shares of major companies
Operator Subscriber base Subscriber base (wire line)

(cellular)
Bharti Airtel 110,511,416 2,928,254
Reliance Communications 86,117,663 1,152,237
Vodafone Essar 82,846,046
BSNL 58,756,598 28,446,969
Idea Cellular 51,454,402
Tata Teleservices 46,796,033 1,003,261
Aircel 25,728,633
MTNL 4,680,141 3,514,454
BPL 2,495,087
Sistema Shyam 1,960,532
HFCL Infotel 379,654 165,978
All India 471,726,205 37,306,334
2.6, Entry barriers in industry

Friction does exist between existing players and the newer entrants, as also between the
providers of services based on different technologies (CDMA Vs Cellular). The same
needs to be resolved with government intervention through the regulator in order to
further improve the services. The telecom sector today is not a small one and covers
various services and many players within each service. One of the most vibrant
developments in telecommunications has been Cellular telephony – a technology that
gives us the power to communicate anytime and anywhere. This segment, a part of the
broader telecommunications industry, has today spawned an entire industry in mobile
telecommunication. Mobile phones today are an integral part of growth, success and
economic efficiency of businesses. The government in India has today
recognized, providing world-class telecommunications infrastructure as the key to rapid
economic and social development of the country.

2.7, Segments in industry

Wireless telephones
The Mobile telecommunications system in India is the second largest in the world and it
was thrown open to private players in the 1990s. The country is divided into multiple
zones, called circles (roughly along state boundaries). Government and several private
players run local and long distance telephone services. Competition has caused prices to
drop and calls across India are one of the cheapest in the world. The rates are supposed to
go down further with new measures to be taken by the Information Ministry. The mobile
service has seen phenomenal growth since 2000. In September 2004, the number of
mobile phone connections has crossed fixed-line connections. India primarily follows
the GSM mobile system, in the 900 MHz band. Recent operators also operate in the 1800
MHz band. The dominant players are Airtel, Reliance Infocomm, Vodafone, Idea
cellular and BSNL/MTNL. There are many smaller players, with operations in only a few
states. International roaming agreements exist between most operators and many foreign
carriers.
The list of ten states (including the metros Mumbai, Kolkata and Chennai in their
respective states) with largest subscriber base as of September 2009 is given below
State Subscriber base Wireless
density'"
Maharashtra 58,789,949 51.96
Uttar Pradesh 57,033,513 26.32
Tamil Nadu 45,449,460 63.66
Andhra Pradesh 37,126,048 42.58
West Bengal 32,540,049 34.28
Karnataka 28,867,734 46.76
Rajasthan 27,742,395 39.09
Gujarat 27,475,585 45.49
Bihar 27,434,896 25.04
Madhya Pradesh 24,923,739 33.09
All India 471,726,205 37.71
Wireless density was calculated using projected population of states from the natural
growth rates of 1991-2001 and population of 2001 census.

Landlines
Landline service in India is primarily run by BSNL/MTNL and Reliance
Infocomm though there are several other private players too, such as Touchtel and Tata
Teleservices. Landlines are facing stiff competition from mobile telephones. The
competition has forced the landline services to become more efficient. The landline
network quality has improved and landline connections are now usually available on
demand, even in high density urban areas. The list of eight states (including the metros
Mumbai, Kolkata and Chennai in their respective states) with largest subscriber base as of
September 2009 is given below
State Subscriber base
Maharashtra 5,996,912
Tamil Nadu 3,620,729
Kerala 3,534,211
Uttar Pradesh 2,803,049
Karnataka 2,751,296
Delhi 2,632,225
West Bengal 2,490,253
Andhra Pradesh 2,477,755
Broadband
The current definition of Broadband in India is speeds of 256 Kbit/s. TRAI on July 2009
have recommended raising this limit to 2 Mbps. As of September 2009, India has 7.21
million broadband users. In the fixed line arena, BSNL and MTNL are the incumbents in
their respective areas of operation and continue to enjoy the dominant service provider
status in the domain of fixed line services. For example BSNL controls 79% of fixed line
share in the country.
On the other hand, in the mobile telephony space, Airtel controls 21.4% subscriber base
followed by Reliance with 20.3%, BSNL with 18.6%, Vodafone with 14.7% subscriber
base (as per June 2005 data).
Airtel and BSNL have launched 8 Mbit/s & Reliance Communication offers 10 Mb/s
broadband internet services in selected areas recently. For home users, the maximum
speed for unlimited downloads is 2 Mbit/s, available for USD 60 (roughly, without taxes)
per month.
Internet Service Providers (ISPs) & Hosts: 86,571 (2004)

3.ENVIRONMENT FACTORS
3.1, Government policies and regulations

National Telecom Policy 1994
In 1994, the Government announced the National Telecom Policy which defined certain
important objectives, including availability of telephone on demand, provision of world
class services at reasonable prices, improving India’s competitiveness in global market
and promoting exports, attractive FDI and stimulating domestic investment, ensuring
India’s emergence as major manufacturing / export base of telecom equipment and
universal availability of basic telecom services to all villages. It also announced a series of
specific targets to be achieved by 1997.
Telecom Regulatory Authority of India (TRAI)

The entry of private service providers brought with it the inevitable need for independent
regulation. The Telecom Regulatory Authority of India (TRAI) was, thus, established
with effect from 20th February 1997 by an Act of Parliament, called the Telecom
Regulatory Authority of India Act, 1997, to regulate telecom services, including
fixation/revision of tariffs for telecom services which were earlier vested in the Central
Government.
TRAI’s mission is to create and nurture conditions for growth of telecommunications in

the country in manner and at a pace, which will enable India to play a leading role in
emerging global information society. One of the main objectives of TRAI is to provide a
fair and transparent policy environment, which promotes a level playing field and
facilitates fair competition. In pursuance of above objective TRAI has issued from time to
time a large number of regulations, orders and directives to deal with issues coming
before it and provided the required direction to the evolution of Indian telecom market
from a Government owned monopoly to a multi operator multi service open competitive
market. The directions, orders and regulations issued cover a wide range of subjects
including tariff, interconnection and quality of service as well as governance of the
Authority.
The TRAI Act was amended by an ordinance, effective from 24 January 2000,
establishing a Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT)
to take over the adjudicatory and disputes functions from TRAI. TDSAT was set up to
adjudicate any dispute between a licensor and a licensee, between two or more service
providers, between a service provider and a group of consumers, and to hear and dispose
of appeals against any direction, decision or order of TRAI.
New Telecom Policy 1999
The most important milestone and instrument of telecom reforms in India is the New
Telecom Policy 1999 (NTP 99). The New Telecom Policy, 1999 (NTP-99) was approved
on 26th March 1999, to become effective from 1st April 1999. NTP-99 laid down a clear
roadmap for future reforms, contemplating the opening up of all the segments of the
telecom sector for private sector participation. It clearly recognized the need for
strengthening the regulatory regime as well as restructuring the departmental telecom
services to that of a public sector corporation so as to separate the licensing and policy
functions of the Government from that of being an operator. It also recognized the need
for resolving the prevailing problems faced by the operators so as to restore their
confidence and improve the investment climate.
Key features of the NTP 99 include:
· Strengthening of Regulator.
· National long distance services opened to private operators.
· International Long Distance Services opened to private sectors.
· Private telecom operators licensed on a revenue sharing basis, plus a one-time

entry fee. Resolution of problems of existing operators envisaged.
· Direct interconnectivity and sharing of network with other telecom operators

within the service area was permitted.
· Department of Telecommunication Services (DTS) corporatized in 2000.
· Spectrum Management made transparent and more efficient.
All the commitments made under NTP 99 have been fulfilled; each one of them, in letter
and spirit, some even ahead of schedule, and the reform process is now complete with all
the sectors in telecommunications opened for private competition.
National Long Distance
National Long Distance opened for private participation. The Government announced on
13.08.2000 the guidelines for entry of private sector in National Long Distance Services
without any restriction on the number of operators. The DOT guidelines of license for the
National Long Distance operations were also issued.

Highlights - NLD Guidelines
· Unlimited entry for carrying both inter-circle and intra-circle calls.
· Total foreign equity (including equity of NRIs and international funding

agencies) must not exceed 74%. Promoters must have a combined net worth of
Rs.25 million.
· Private operators will have to enter into an arrangement with fixed-service

providers within a circle for traffic between long-distance and short-distance
charging centres.
· Seven years time frame set for rollout of network, spread over four phases. Any
shortfall in network coverage would result in encashment and forfeiture of bank
guarantee of that phase.
· Private operators to pay one-time entry fee of Rs.25 million plus a Financial
Bank Guarantee (FBG) of Rs.200 million. The revenue sharing agreement would
be to the extent of 6%.
· Private operators allowed setting up landing facilities that access submarine

cables and use excess bandwidth available.
· License period would be for 20 years and extendable by 10 years.
International Long Distance
In the field of international telephony, India had agreed under the GATS to review its
opening up in 2004. However, open competition in this sector was allowed with effect
from April 2002 itself. There is now no limit on the number of service providers in this
sector. The license for ILD service is issued initially for a period of 20 years,
with automatic extension of the license by a period of 5 years. The applicant company
pays one-time non-refundable entry fee of Rs.25 million plus a bank guarantee of Rs.250
million, which will be released on fulfillment of the roll out obligations. The annual
license fee including USO contribution is @ 6% of the Adjusted Gross Revenue and the
fee/royalty for the use of spectrum and possession of wireless telegraphy equipment are
payable separately. At present 24 ILD service providers (22 Private and 2 Public Sector
Undertaking) are there. As per current roll out obligations under ILD license, the licensee
undertakes to fulfill the minimum network roll out obligations for installing at least one
Gateway Switch having appropriate interconnections with at least one National Long

Distance service licensee. There is no bar in setting up of Point of Presence (Pop) or

Gateway switches in remaining location of Level I Tax’s. Preferably, these Pops should
conform to Open Network Architecture (ONA) i.e. should be based on internationally
accepted standards to ensure seamless working with other Carrier’s Network.
Universal Service Obligation Fund
Another major step was to set up the Universal Service Obligation Fund with effect from
April 1, 2002. An administrator was appointed for this purpose. Subsequently, the Indian
Telegraph (Amendment) Act, 2003 giving statutory status to the Universal Service
Obligation Fund (USOF) was passed by both Houses of Parliament in December
2003. The Fund is to be utilized exclusively for meeting the Universal Service Obligation
and the balance to the credit of the Fund will not lapse at the end of the financial year.
Credits to the Fund shall be through Parliamentary approvals. The Rules for
administration of the Fund known as Indian Telegraph (Amendment) Rules, 2004 were
notified on 26.03.2004.
The resources for implementation of USO are raised through a Universal Service Levy
(USL) which has presently been fixed at 5% of the Adjusted Gross Revenue (AGR) of all
Telecom Service Providers except the pure value added service providers like Internet,
Voice Mail, E-Mail service providers etc. In addition, the Central Govt. may also give
grants and loans. An Ordinance was promulgated on 30.10.2006 as the Indian Telegraph
(Amendment) Ordinance 2006 to amend the Indian Telegraph Act, 1885 in order to
enable support for mobile services and broadband connectivity in rural and remote areas
of the country. Subsequently, an Act has been passed on 29.12.2006 as the Indian
Telegraph (Amendment) Act 2006 to amend the Indian Telegraph Act, 1885.
Currently, DOT initiated action to bring mobile services within the ambit of Universal
Service Obligation Fund (USOF) activities. Under this initiative, 7871 mobile
infrastructure sites are being rolled out, in the first phase, across 500 districts and 28 states
of India. This scheme will provide mobile services to approximately 0.2 million villages
which where hitherto deprived of the same. As on 31st January 2009, 3316 shared towers
have been set up under the First Phase of the scheme. The USOFof DOT has proposed to
set up about 10,128 additional towers in order to extend the mobile coverage in other
uncovered areas under the Second Phase of the Scheme. The second phase is based on
sharing of subsidized passive infrastructure (tower, boundary wall, electronic connection,
power back up, security cabin etc ) by three telecom service providers who will put up
their own subsidized active infrastructure (BTS, antenna, backhaul) and roll out wireless
services.

Unified Access Services
Unified access license regime was introduced in November’2003. Unified Access

Services operators are free to provide, within their area of operation, services, which
cover collection, carriage, transmission and delivery of voice and/or non-voice messages
over Licensee’s network by deploying circuit, and/or packet switched equipment. Further,
the Licensee can also provide Voice Mail, Audiotex services, Video Conferencing,
Videotex, E-Mail, Closed User Group (CUG) as Value Added Services over its network
to the subscribers falling within its service area on non-discriminatory basis. The country
is divided into 23 Service Areas consisting of 19 Telecom Circle and 4 Metro Service
Areas for providing Unified Access Services (UAS). The license for Unified Access
Services is issued on non-exclusive basis, for a period of 20 years, extendable by 10 years
at one time within the territorial jurisdiction of a licensed Service Area. The license Fee is
10%, 8% & 6% of Adjusted Gross Revenue (AGR) for Metro and Category `a’, Category
`B’ and Category `C’ Service Areas, respectively. Revenue and the fee/royalty for the use
of spectrum and possession of wireless telegraphy equipment are payable separately. The
frequencies are assigned by WPC wing of the Department of Telecommunications from
the frequency bands earmarked in the applicable National Frequency Allocation Plan and
in coordination with various users subject to availability of scarce spectrum.
Internet Service Providers (ISPs)
Internet service was opened for private participation in 1998 with a view to encourage
growth of Internet and increase its penetration. The sector has seen tremendous
technological advancement for a period of time and has necessitated taking steps to
facilitate technological ingenuity and provision of various services. The Government in
the public interest in general, and consumer interest in particular, and for proper conduct
of telegraph and telecom services has decided to issue the new guidelines(Details) for
grant of license of Internet services on non-exclusive basis. Any Indian company with a
maximum foreign equity of 74% is eligible for grant of license.
Broadband Policy 2004

Recognizing the potential of ubiquitous Broadband service in growth of GDP and
enhancement in quality of life through societal applications including tele-education, tele-
medicine, e-governance, entertainment as well as employment generation by way of high-
speed access to information and web based communication; Government has announced

Broadband Policy in October 2004. The main emphasis is on the creation of infrastructure
through various technologies that can contribute to the growth of broadband services.
These technologies include optical fibre, Asymmetric Digital Subscriber Lines (ADSL),
cable TV network; DTH etc. Broadband connectivity has been defined as “Always On”
with the minimum speed of 256 kbps. It is estimated that the number of broadband
subscribers would be 20 million by 2010. With a view to encourage Broadband
Connectivity, both outdoor and indoor usage of low power Wi-Fi and Wi-Max systems in
2.4 GHz-2.4835 GHz band has been delicensed. The use of low power indoor systems in
5.15-5.35 GHz and 5.725-5.875 GHz bands has also been delicensed in January 05. The
SACFA/WPC clearance has been simplified. The setting up of National Internet
Exchange of India (NIXI) would enable bringing down the international bandwidth cost
substantially, thus making the broadband connectivity more affordable.
The prime consideration guiding the Policy includes affordability and reliability of
Broadband services, incentives for creation of additional infrastructure, employment
opportunities, induction of latest technologies, national security and brings in competitive
environment so as to reduce regulatory interventions.
By this new policy, the Government intends to make available transponder capacity for
VSAT services at competitive rates after taking into consideration the security
requirements. The service providers permitted to enter into franchisee agreement with
cable TV network operators. However, the Licensee shall be responsible for compliance
of the terms and conditions of the license. Further in the case of DTH services, the service
providers permitted to provide Receive-Only-Internet Service. The role of other
facilitators such as electricity authorities, Departments of ITs of various State
Governments, Departments of Local Self Governments, Panchayats, Departments of
Health and Family Welfare, Departments of Education is very important to carry the
advantage of broadband services to the users particularly in rural areas. Target has been
set for 20 million broadband connections by 2010 and providing Broadband connectivity
to all secondary and higher secondary schools, public health institutions and Panchayats
by 2010. In rural areas, connectivity of 512 KBPS with ADSL 2 plus technology (on wire)
will be provided from about 20,000 existing exchanges in rural areas having optical fibre
connectivity. Community Service Centres, secondary schools, banks, and health centres,
Panchayats, police stations etc. can be provided with this connectivity in the vicinity of
above-mentioned 20,000 exchanges in rural areas. DOT will be subsidizing the
infrastructure cost of Broadband network through support from USO Fund to ensure that
Broadband services are available to users at affordable tariffs.

3.2, FOREIGN DIRECT INVESTMENT (FDI)
In Basic, Cellular Mobile, Paging and Value Added Service, and Global Mobile Personal
Communications by Satellite, Composite FDI permitted is 74% (49% under automatic
route) subject to grant of license from Department of Telecommunications subject to
security and license conditions.
FDI up to 74% (49% under automatic route) is also permitted for the following: -
Radio Paging Service
Internet Service Providers (ISP's)
FDI up to 100% permitted in respect of the following telecom services: -
Infrastructure Providers providing dark fibre (IP Category I);
Electronic Mail; and Voice Mail
Subject to the conditions that such companies would divest 26% of their equity in favor of
Indian public in 5 years, if these companies were listed in other parts of the world.
 In telecom manufacturing sector 100% FDI is permitted under automatic route.

 The Government has modified method of calculation of Direct and Indirect
Foreign Investment in sector with caps and has also issued guidelines on
downstream investment by Indian Companies.
 Guidelines for transfer of ownership or control of Indian companies in sectors
with caps from resident Indian citizens to non-resident entities have been issued
3.3, Technology
3G & Broadband Wireless Services (BWA)
The latest technology in telecom is 3G. 3G is the third generation of tele standards and
technology for mobile networking, superseding 2.5G. It is based on the International
Telecommunication Union (ITU) family of standards under the IMT-2000. [1]

3G networks enable network operators to offer users a wider range of more advanced
services while achieving greater network capacity through improved spectral efficiency.
Services include wide-area wireless voice telephony, video calls, and broadband wireless
data, all in a mobile environment. Additional features also include HSPA data
transmission capabilities able to deliver speeds up to 14.4 Mbit/s on the downlink and 5.8
Mbit/s on the uplink. Unlike IEEE 802.11 networks, which are commonly called Wi-Fi or
WLAN networks, 3G networks are wide-area cellular telephone networks that evolved to
incorporate high-speed Internet access and video telephony. IEEE 802.11 networks are
short range, high-bandwidth networks primarily developed for data.
Service providers provide different services on networks. Blackberry is the latest one.
Blackberry services bring together smart phones and software services to provide
customers with easy wireless access to email, phone, and web and multimedia
applications. At present, four telecom operators - Reliance Communications, Airtel,
Vodafone and Tata Teleservices - are providing BlackBerry services.
Introduction of new technology in Telecommunications Services Sector is always
welcome by the customers since telecommunication has become the dire need of the hour.
Hence new technology causes customer expansion and high profit margins.
3.4, Research & Development

India has proven its dominance as a technology solution provider. Efforts are being
continuously made to develop affordable technology for masses, as also comprehensive
security infrastructure for telecom network. Research is on for the preparation of tested
infrastructure for enabling interoperability in Next Generation Network. It is expected that
the telecom equipment R & D shall be doubled by 2010 from present level of 15%.
Modern technologies inductions are being promoted. Pilot projects on the existing and
emerging technologies have been undertaken including WiMax, 3G etc. Emphasis is
being given to technologies having potential to improve rural connectivity. Also to beef
up R&D infrastructure in the telecom sector and bridge the digital divide, cellular
operators, top academic institutes and the Government of India together set up the
Telecom Centres of Excellence (COEs). The main objectives of the COEs are as follows:
· Achieve Telecom Vision 2010 that stipulates a definite growth model and take it
beyond.
· Secure Information Infrastructure that is vital for country’s security.
· Capacity Building through Knowledge for a sustained growth.
· Support Planned Predictive Growth for stability.
· Reduce Rural Urban Digital Divide to reach out to masses.
· Utilize available talent pool and create environment for innovation.

· Management of National Information Infrastructure (NII) during Disaster
· Cater the requirement of South East Asia as Regional Telecom Leader
3.5, Mobile Number Portability (MNP)
Mobile Number Portability (MNP) allows subscribers to retain their existing telephone
number when they switch from one access service provider to another irrespective of
mobile technology or from one technology to another of the same or any other access
service provider. The Government has announced the guidelines for Mobile Number
Portability (MNP) Service License in the country on 1st August 2008 and has issued a
separate License for MNP service w.e.f. 20.03.2009. The Department of
Telecommunication (DoT) has already issued licenses to two global companies (M/s
Syniverse Technologies Pvt. Ltd. and M/s MNP Interconnection Telecom Solutions India
Pvt. Ltd.) for implementing the service.
MNP is to be implemented in Delhi, Mumbai, Maharashtra & Gujarat service areas of

Zone – 1 and Kolkata, Tamil Nadu including Chennai, Andhra Pradesh & Karnataka
service areas of Zone - 2 within six months of the award of the license i.e. by 20.09.2009
and in rest of the service areas within one year of the award of the license i.e. by
20.03.2010.
4. KEY PLAYERS
4.1, Bharti Airtel

Airtel comes to you from Bharti Airtel Limited, one of Asia’s leading integrated telecom
services providers with operations in India and Sri Lanka. Bharti Airtel since its inception
has been at the forefront of technology and has pioneered several innovations in the
telecom sector.

The company is structured into four strategic business units - Mobile, Telemedia,
Enterprise and Digital TV. The mobile business offers services in India and Sri Lanka.
The Telemedia business provides broadband, IPTV and telephone services in 95 Indian
cities. The Digital TV business provides Direct-to-Home TV services across India. The
Enterprise business provides end-to-end telecom solutions to corporate customers and
national and international long distance services to telcos.
Vision & promise

By 2010 Airtel will be the most admired brand in India:
Loved by more customers

Targeted by top talent
Benchmarked by more businesses
‘’We at Airtel always think in fresh and innovative ways about the needs of our customers
and how we want them to feel. We deliver what we promise and go out of our way to
delight the customer with a little bit more’’
Corporate Responsibility at Bharti Airtel
Overview
At Bharti, CSR is a way of life. Each department and employee strives to be sensitive to
the stakeholders and environment within their work context. Bharti encourages employees
to take decisions and design business-linked processes that are sensitive to communities
and environment.
Corporate Social Responsibility (CSR) in Bharti encompasses much more than only social
outreach programs. It is an integral part of the way Bharti conducts its business. The
essence of Bharti’s commitment to Corporate Social Responsibility is embedded in the
‘Corporate Values’, which stem from its deepest held beliefs. These Values are:
 To be responsive to the needs of our customers

 To trust and respect our employees
 To continuously improve our services – innovatively and expeditiously
 To be transparent and sensitive in our dealings with all stakeholders
We encourage our employees to take decisions and design business processes, keeping in
mind the following:
 Ethics, fairness and being correct

 Meeting and going beyond compliances and legal requirements
 Showing respect and sensitivity towards stakeholders and communities, and
 Nurturing the environment
We practice our CSR beliefs and commitments through a three-pronged approach:

 Engaging with stakeholders

 Ensuring stakeholder sensitive policies and practices
 Undertaking programs for our employees, community and environment
Bharti Airtel sensitizes its employees towards CSR issues at various forums. We feel that
it is important that each employee should understand the importance of environmental,
social and economical aspects while taking business decisions. At Bharti, each employee
is sensitized towards CSR issues and thus operations at the ground level are influenced.
Such sensitization exercises have resulted in many socially and environmentally sensitive
decisions on the ground. For example, Confidence Plan for hearing impaired people
covers noise-making DG sets at extra cost, investing in consumer awareness campaigns to
ensure safe use of mobile are some examples of the above.
Airtel -Annual results in brief
Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Sales 34,014.29 25,703.51 17,794.43 11,228.68 7,903.02
Operating profit 12,991.06 10,501.03 7,116.95 3,881.83 2,788.39
Interest 1,763.98 483.71 255.84 225.60 245.92
Gross profit 11,367.82 10,253.18 6,954.67 3,718.13 2,583.64
EPS (Rs) 20.40 16.45 10.64 5.31 3.26
Annual results in details

Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Other income 140.74 235.86 93.56 61.90 41.17
Stock adjustment - - - - -
Raw material - - - - -
Power and fuel - - - - -
Employee expenses 1,498.34 1,366.64 1,148.98 788.16 508.80
Excise - - - - -
Admin and selling expenses 4,263.93 3,727.86 - - -
Research and development
- - - - -
expenses
Expenses capitalized - - - - -
Other expenses 15,260.96 10,107.98 9,528.50 6,558.69 4,605.83
Provisions made - - - - -
Depreciation 3,206.28 3,280.63 2,353.30 1,432.35 1,019.36
Taxation 417.70 728.35 568.15 273.71 353.60
Net profit / loss 7,743.84 6,244.20 4,033.22 2,012.07 1,210.68
Extra ordinary item - - - - -
Prior year adjustments - - - - -
Equity capital 1,898.24 1,897.91 1,895.93 1,893.88 1,856.09
Equity dividend rate - - - - -
Agg.of non-prom. shares (Lacs) 6235.09 6475.58 7402.88 10325.93 9921.81
Agg.of non promotoHolding (%) 32.85 34.12 39.04 54.52 53.53
OPM (%) 38.19 40.85 40.00 34.57 35.28
GPM (%) 33.28 39.53 38.88 32.93 32.52
NPM (%) 22.67 24.07 22.55 17.82 15.24
Factsheet
Name Bharti Airtel Limited.
Business Description Provides GSM mobile services in all the 22 telecom circles
in India, and was the first private operator to have an all
India presence.
Provides Telemedia services (fixed line and broadband
services through DSL) in 95 cities in India.
Established July 07, 1995, as a Public Limited Company
Proportionate Revenue Rs. 369,615 million (year ended March 31, 2009-Audited)
Rs. 270,250 million (year ended March 31, 2008-Audited)

As per US GAAP Accounts

Proportionate EBITDA Rs. 151,678 million (year ended March 31, 2009 - Audited)
Rs. 113,715 million (year ended March 31, 2008 - Audited)
As per US GAAP Accounts
Shares in Issue 3,796,842,330 as at Sept 30, 2009
Listings The Stock Exchange, Mumbai (BSE)
The National Stock Exchange of India Limited (NSE)
Market Capitalization
Customer Base 110,511,416 GSM mobile and 2,928,254 Telemedia
Customers (status as on Sept 30, 2009)
Operational Network Provides GSM mobile services in all the 22 telecom circles
in India, and was the first private operator to have an all
India presence.
Provides Telemedia services (fixed line) in 95 cities in India.

Registered Office Bharti Airtel Limited
(A Bharti Enterprise)
Aravali Crescent,
1 Nelson Mandela Road,
Vasant Kunj Phase II
New Delhi - 110 070
Tel. No.: +91 11 4666 6100
Fax No.: +91 11 4666 6411
4.2, Bharat Sanchar Nigam Ltd

Bharat Sanchar Nigam Ltd. formed in October, 2000, is World's 7th largest
Telecommunications Company providing comprehensive range of telecom services in
India: Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service,
MPLS-VPN, VSAT, VoIP services, IN Services etc. Presently it is one of the largest &
leading public sector units in India. BSNL has installed Quality Telecom Network in the

country and now focusing on improving it, expanding the network, introducing new
telecom services with ICT applications in villages and wining customer's confidence.
Today, it has about 47.3 million line basic telephone capacity, 4 million WLL
capacity, 49.76 Million GSM Capacity, more than 37382 fixed exchanges, 46565
BTS, 3895 Node B ( 3G BTS), 287 Satellite Stations, 480196 Rkm of OFC Cable,
63730 Rkm of Microwave Network connecting 602 Districts, 7330 cities/towns and
5.5 Lakh villages. BSNL is the only service provider, making focused efforts and planned
initiatives to bridge the Rural-Urban Digital Divide ICT sector. In fact there is no telecom
operator in the country to beat its reach with its wide network giving services in every
nook & corner of country and operates across India except Delhi & Mumbai. Whether it is
inaccessible areas of Siachen glacier and North-eastern region of the country. BSNL
serves its customers with its wide bouquet of telecom services. BSNL is numero uno
operator of India in all services in its license area. The company offers vide ranging &
most transparent tariff schemes designed to suite every customer.
BSNL cellular service, Cell One, has 55,140,282 2G cellular customers and 88,493 3G
customers as on 30.11.2009. In basic services, BSNL is miles ahead of its rivals, with 35.1
million Basic Phone subscribers i.e. 85 per cent share of the subscriber base and 92
percent share in revenue terms. BSNL has more than 2.5 million WLL subscribers and 2.5
million Internet Customers who access Internet through various modes viz. Dial-up,
Leased Line, DIAS, and Account Less Internet (CLI). BSNL has been adjudged as the
NUMBER ONE ISP in the country. BSNL has set up a world class multi-gigabit, multi-
protocol convergent IP infrastructure that provides convergent services like voice, data
and video through the same Backbone and Broadband Access Network. At present there
are 0.6 million Data One broadband customers. The company has vast experience in
Planning, Installation, network integration and Maintenance of Switching & Transmission
Networks and also has a world class ISO 9000 certified Telecom Training Institute.
Scaling new heights of success, the present turnover of BSNL is more than Rs.351,
820 million (US $ 8 billion) with net profit to the tune of Rs.99, 390 million (US $ 2.26
billion) for last financial year. The infrastructure asset on telephone alone is worth about
Rs.630, 000 million (US $ 14.37 billion). BSNL plans to expand its customer base from
present 47 millions lines to 125 million lines by December 2007 and infrastructure
investment plan to the tune of Rs. 733 cores (US$ 16.67 million) in the next three years.
BSNL – SWOT ANALYSIS
STRENTHS
 Pan-India reach
 Experienced telecom service provider
 Total telecom service provider
 Huge Resources (financial & technical pool)
 Huge customer base
 Most trusted telecom brand
 Transparency in billing
 Easy deployment of new services
 Copper in last mile can be used for easy broadband deployment
 Huge Optical Fibre network and associated bandwidth
WEAKNESSES
 Non-optimization of network capabilities
 Poor marketing strategy
 Bureaucratic organizational set up
 Inflexibility in mindset (DOT period legacies)
 Limited number of value added services
 Poor franchisee network
 Legacy of poor service image
 Huge and aged manpower
 Procedural delays
 Lack of strategic alliances
 Problems associated with incumbency like outdated technologies, unproductive
rural assets, social obligations, political interference,
 Poor IT penetration within organization
 Poor knowledge Management
OPPORTUNITIES
 Tremendous market growing at 20 lac customers per month
 Untapped broadband services
 Untouched international market
 Can capitalize on public sector image to grab government’s ICT initiatives
 ITEB service markets
 Diversification of business to turn-key projects
 Leveraging the brand image to source funds
 Almost un-invaded VSAT market
 Fuller utilization of slack resources
 Can make a kill through deep penetration and low cost advantage
 Broaden market expected from convergence of broadcasting, telecom and
entertainment industry
THREATS
 Competition from private operators
 Keeping pace with fast technological changes
 Market maturity in basic telephone segment
 Manpower churning
 Multinational eyeing Indian telecom market
 Private operators demand for sharing last mile
 Decreasing per line revenues due to competitive pricing
 Private operators demand to do away with ADC can seriously effect revenues

 Populist policies of government like “One India” rates
BSNL Registered Office Bharat Sanchar Bhavan

Harish Chandra Mathur Lane
Jan path, New Delhi-110 001
BSNL Corporate Office Bharat Sanchar Bhavan

Harish Chandra Mathur Lane
Jan path, New Delhi-110 001
4.3, IDEA CELLUAR LTD

Company Information
IDEA Cellular is a publicly listed company, having listed on the Bombay Stock Exchange
(BSE) and the National Stock Exchange (NSE) in March 2007.
IDEA Cellular is a leading GSM mobile services operator in India with over 53 million
subscribers, under brand IDEA. It is a pan India integrated GSM operator covering the
entire telephony landscape of the country, and has NLD and ILD operations.

A frontrunner in introducing revolutionary tariff plans, IDEA Cellular has the distinction
of offering the most customer friendly and competitive Pre Paid offerings, for the first
time in India, in an increasingly segmented market. From basic voice & Short Message
Service (SMS) services to high-end value added & GPRS services such as Blackberry,
Data card, Mobile TV, Games etc - IDEA is seen as an innovative, customer focused
brand.
IDEA offers affordable and world-class mobile services to varied segments of mobile
users. Be it high end users, or low-end, price sensitive consumers - IDEA's tariff plans are
designed to suit every pocket.
With a vision of delighting its customers while meeting their individual communication
needs anytime, anywhere, IDEA offers seamless coverage to roaming customers traveling
to any part of the country, as well as to international traveling customers across over 200
countries. IDEA Cellular has partnership with over 400 operators to ensure that customers
are always connected while on the move, within the country or other parts of the world.
IDEA is the winner of ‘The Emerging Company of the Year Award' at The Economic
Times Corporate Excellence Awards 2008-09. The company has received several other
national and international recognitions for its path-breaking innovations in mobile
telephony products & services. It won the GSM Association Award for “Best Billing and
Customer Care Solution” for 2 consecutive years. It was awarded “Mobile Operator of the
Year Award - India” for 2007 and 2008 at the Annual Asian Mobile News Awards (Click
here to view the complete list)*
IDEA Cellular is an Aditya Birla Group Company, India's first truly multinational
corporation. The group operates in 25 countries, and is anchored by over 1, 30,000
employees belonging to 30 nationalities. The Group has been adjudged the ‘6th Top
Company for Leaders in Asia Pacific Region' in 2009, in a survey conducted by Hewitt
Associates, in partnership with The RBL Group, and Fortune. The Group has also been
rated ‘The Best Employer in India and among the Top 20 in Asia' by the Hewitt-
Economic Times and Wall Street Journal Study 2007.
Service Areas
The Indian telecommunications market for mobile services is divided into 22 "Service
Areas" classified into "Metro", Category "A", Category "B" and Category "C" service
areas by the Government of India. These classifications are based principally on a Service
Area's revenue generating potential.
IDEA is a pan-India operator with services being made available in all parts of the
country.
The telecom service areas have been divided into Established and New Service Areas
Established Service Areas
The established service areas are Delhi, Andhra Pradesh, Gujarat, Maharashtra, Haryana,
Kerala, Madhya Pradesh and Uttar Pradesh (West).
Licenses for the Maharashtra and Gujarat Service Areas were awarded in December 1995,
with network rollout and commercial launch achieved in 1997. In January 2001 the

mobile operations in Andhra Pradesh Service Area were integrated with IDEA through a
merger with Tata Cellular Limited.
In June 2001, the mobile operations in Madhya Pradesh Service Area were fully
integrated with IDEA through an acquisition of RPG Cellcom Limited. In October 2001,
the license for Delhi Service Area was acquired during the fourth mobile license auction,
with network rollout and commercial launch in November 2002.
In January 2004, Escotel Mobile Communications Private Limited ("Escotel"), was

acquired with its original licenses in the Service Areas of Haryana, Uttar Pradesh (West)
and Kerala. All these Service Areas were re-branded and integrated with IDEA in June
2004.
New Service Areas
The New Service Areas are Uttar Pradesh (East), Rajasthan, Himachal Pradesh, Bihar,
Mumbai, Karnataka, Punjab, Orissa, Chennai & Tamil Nadu, Jammu & Kashmir, Kolkata
& West Bengal, and Assam & North East.
Licenses for Uttar Pradesh (East), Rajasthan and Himachal Pradesh were acquired through
the acquisition of Escotel (Escorts Telecommunications Limited).
Idea launched its services in Mumbai and Bihar in 2008. The Mumbai launch was the
largest Metro City launch in India. In Bihar, Idea acquired 500,000 subscribers in just
over 100 days.
Brand Idea was launched in Karnataka and Punjab, through the acquisition of Spice
Communications.
The company has expanded its pan-India presence through service launches in Orissa,
Chennai & Tamil Nadu, Jammu & Kashmir, Kolkata & West Bengal, and the North East
states in FY10.
Idea cellular SWOT Analysis

Strength
Attractive existing footprint;Original licensee in seven of the Established Circles,
providing incumbency advantages;Market leader in two of, and established positions in
the remainder of, the Established Circles,Strong distribution channels;,High quality
network structure;,A national brand;,Part of the Aditya Birla Group,Attractive growth
Weaknesses

High Debt-Equity Ratio: The Company's Debt-Equity ratio is high as compared to its
peers. Moreover, the Company needs the approval of the lenders under its financing
arrangements before undertaking certain significant corporate actions
Concentration: The Company revenues are derived solely from providing mobile services
and it is dependent on four of the Established Circles for a significant proportion of its
revenues.The Company had accumulated losses amounting to Rs. 19.23 billion and Rs.
17.23 billion for financial years 2005 and 2006 respectively. The Company may not be in
a position to pay dividends until it clears its accumulated losses.
Opportunities
The Indian telecommunication industry is expected to continue to enjoy growth due to its
low-Teledensity and increasing affordability of mobile telephone and services.
The contribution of service sector to the GDP has improved significantly from 29% in
1950 to 54% in 2005. This is primarily due to growth of information-technology and
information technology enables services. This will further stimulate the demand for
mobile telecommunication services.
The regulatory environment is improving and there is greater clarity in existing rules and
procedures. This would enable operators in improving network quality. Also raising of
funds will become easier due to greater predictability of operational environment.
Threats
There is intense competition in the Indian telecommunication industry. Idea Cellular faces
significant competition from private companies that have a pan-India footprint such as
Bharti Airtel, Tata Teleservices and Reliance Communication Ventures. Also it faces
competition from government owned companies such as BSNL and MTNL.
Alternative technology is evolving very rapidly in the telecommunications industry. For

instance, "Wi-Fi" and Wi-Max" which allows for voice data transfer have been tested and
handsets with such technology may soon be available in the Indian market. Moreover,
satellite communication voice data transport medium like "Skype" may become a serious
competitor in the long distance voice data transfer business.
Idea Cellular Ltd. -Annual results in brief

Mar ' 09 Mar ' 08 Mar ' 07
Sales 9,916.45 6,719.99 2,795.25
Operating profit 2,816.50 2,253.82 981.60
Interest 450.72 277.64 275.73
Gross profit 2,365.78 1,993.64 737.20

Mar ' 09 Mar ' 08 Mar ' 07

EPS (Rs) 3.25 3.96 1.07
Mar ' 09 Mar ' 08 Mar ' 07

Other income - 17.46 31.33
Stock adjustment - - -
Raw material - - -
Power and fuel - - -
Employee expenses 467.69 341.78 154.29
Excise - - -
Admin and selling expenses 1,241.14 969.39 -
- - -
expenses
Expenses capitalized - - -
Other expenses 5,391.12 3,155.00 1,659.36
Provisions made - - -
Depreciation 1,293.34 876.75 455.76
Taxation 64.23 72.50 3.72
Net profit / loss 1,008.21 1,044.39 277.72
Extra ordinary item - - -
Prior year adjustments - - -
Equity capital 3,100.10 2,635.36 2,592.86
Equity dividend rate - - -
Agg.of non-prom. shares (Lacs) 15771.58 11149.15 11149.15
Agg.of non promotoHolding (%) 50.87 42.31 43.00
OPM (%) 28.40 33.54 35.12
GPM (%) - 29.59 26.08
NPM (%) - 15.50 9.83
4.4, Reliance communications

Reliance – Anil Dhirubhai Ambani Group, an offshoot of the Reliance Group founded by
Shri Dhirubhai H Ambani (1932-2002), ranks among India’s top three private sector
business houses in terms of net worth. The group has business interests that range from
telecommunications (Reliance Communications Limited) to financial services (Reliance

Capital Ltd) and the generation and distribution of power (Reliance Infrastructure
Limited).
Reliance – ADA Group’s flagship company, Reliance Communications, is India's largest

private sector information and Communications Company, with over 92 million
subscribers. It has established a pan-India, high-capacity, integrated (wireless and
wireline), convergent (voice, data and video) digital network, to offer services spanning
the entire Infocomm value chain.
Other major group companies — Reliance Capital and Reliance Infrastructure — are
widely acknowledged as the market leaders in their respective areas of operation.
Vision
“We will leverage our strengths to execute complex global-scale projects to facilitate
leading-edge information and communication services affordable to all individual
consumers and businesses in India.
We will offer unparalleled value to create customer delight and enhance business
productivity.
We will also generate value for our capabilities beyond Indian borders and enable millions
of India's knowledge workers to deliver their services globally.”
RELIANCE COMMUNICATION LIMITED sowt analysis

Strength
 Low Entry Cost
 Commission Structure
 Fast Activation Process

 Network
 Connectivity
 Data GPRS
Weakness
 Branding Image
 Distribution problem
 Limited product portfolio- Only Mobile
 Lack of Competitive Strength
 Limited Budget
Opportunity
 Preference of GSM over CDMA
 New Specialist Application
 Rural Telephony
 New Market, Vertical, Horizontal
 Competitors` Vulnerabilities
Threat
 Political destabilization.
 New Entrants
 IT Development
 Market Demand
 Seasonality, Weather Effects
Reliance Annual results in brief

Mar ' 09 Mar ' 08 Mar ' 07 Dec ' 06 Dec ' 05
Sales 13,610.58 13,416.19 11,725.26 8,584.97 -
Operating profit 4,337.16 4,882.46 4,476.60 3,276.94 -

Interest 85.58 445.17 232.38 162.84 -6.79
Gross profit 4,335.67 4,447.75 4,280.87 3,149.84 11.59
EPS (Rs) 11.40 12.53 11.78 8.42 565.00

Other income 84.09 10.46 36.65 35.74 6.47
Stock adjustment - - - - -
Raw material - - - - -
Power and fuel - - - - -
Employee expenses 759.35 858.65 684.40 492.04 1.11
Excise - - - - -
Admin and selling expenses - - 2,119.44 1,544.81 0.56
- - - - -
expenses
Expenses capitalized - - - - -
Other expenses 8,514.07 7,675.08 4,444.82 3,271.18 -
Provisions made - - - - -
Depreciation 2,366.90 1,843.66 1,836.12 1,364.39 2.74
Taxation 12.40 17.64 12.00 18.35 3.20
Net profit / loss 2,352.93 2,586.45 2,408.85 1,722.10 5.65
Extra ordinary item 396.56 - -23.90 -45.00 -
Prior year adjustments - - - - -
Equity capital 1,032.01 1,032.01 1,022.31 1,022.31 0.05
Equity dividend rate - - - - -
Agg.of non-prom. shares (Lacs) 6741.66 6992.16 6798.04 6797.94 -
Agg.of non promotoHolding (%) 32.66 33.88 33.25 33.25 -
OPM (%) 31.87 36.39 38.18 38.17 -
GPM (%) 31.66 33.13 36.40 36.54 -
NPM (%) 17.18 19.26 20.48 19.98 -
5. CONCLUSION

5.1, Investment Opportunities and Incentives
An attractive trade and investment policy and lucrative incentives for foreign
collaborations have made India one of the world’s most attractive markets for the telecom
equipment suppliers and service providers.
· No industrial license required for setting up manufacturing units for telecom

equipment.
· Automatic approval of 100 percent foreign equity, technology fee up to US $ 2

million, royalty up to 5 percent for domestic sales and 8 percent for exports in
telecom manufacturing projects.
· Foreign equity of 74% (49 % under automatic route) permitted for telecom
services - basic, cellular mobile, paging, and value added services, NLD, ILD, and
ISPs - and global mobile personal communications by satellite.
· Full reparability of dividend income and capital invested in the telecom sector.
5.2, Network Expansion
The telecom sector has shown robust growth during the past few years. It has also
undergone a substantial change in terms of mobile versus fixed phones and public versus
private participation. The following table shows the growth trend of telecom sector from
last five years:
The number of telephones has increased from 54.63 million as on 31.03.2003 to 429.72
million as on 31.03.2009. Wireless subscribers increased from 13.3 million as on
31.03.2003 to 391.76 million as on 31.03.2009. Whereas, the fixed line subscribers
decreased from 41.33 million in 31.03.2003 to 37.96 million in 31.03.2009. The
broadband subscribers grew from a meager 0.18 million to 6.22 million during the last 5
years.
5.3 Trend in Tele-density
Tele-density in the country increased from 5.11% in 2003 to 36.98 % in March. In the
rural area Teledensity increased from 1.49% in Mar 2003 to 15.11% in March 2009 and in
the urban areas it is increased from 14.32% in Mar 2003 to 88.84% in March 2009.This
indicates a rising trend of Indian telecom subscribers.

5.4, Rural Telephony
Apart from the 123.51million fixed and WLL connections on March 2009 provided in the
rural areas, 57167 uncovered VPTs have been provided as on March 2009. Thus, 85% of
the villages in India have been covered by the VPTs. More than 3 lakh PCOs are also
providing community access in the rural areas. Further, Mobile Gramin Sanchar Sewak
Scheme (GSS) – a mobile Public Call Office (PCO) service is provided at the doorstep of
villagers. At present, 2772 GSSs are covering 12043 villages. Also, to provide Internet
service, Sanchar Dhabas (Internet Kiosks) have been provided in more than 3500 Block
Headquarters out of the total 6337 Blocks in the country. The target of 80 million rural
connections by 2010 have already met during year 2008 itself. USOF subsidy support
scheme is also being utilized for sharing wireless infrastructure in rural areas with about
19,000 towers by 2010.
5.5,Opportunities
India offers an unprecedented opportunity for telecom service operators, infrastructure

vendors, manufacturers and associated services companies. A host of factors are
contributing to enlarged opportunities for growth and investment in telecom sector:
· An expanding Indian economy with increased focus on the services sector
· Population mix moving favorably towards a younger age profile
· Urbanization with increasing incomes
Investors can look to capture the gains of the Indian telecom boom and diversify their
operations outside developed economies that are marked by saturated telecom markets
and lower GDP growth rates.
Inflow of FDI into India’s telecom sector during April 2000 to March 2009 was about Rs
275,444 million. Also, more than 8 per cent of the approved FDI in the country is related
to the telecom sector.
5.6, SWOT Analysis of Orange
Strengths
Mobile Communications Arm of a Large, Well-Funded, Well-Connected and Ambitious
Indian Conglomerate
Economies of Scale From Large Subscriber Base

Expertise in a Business Model That Allows It to Maintain High Profitability From Lower-
Yielding Subscribers
Weaknesses
Cost Structure Disadvantage With Subscribers Spread Across Two Different Mobile
Networks
Low ARPU Compared With Competitors
Weakness in Rural Markets
Limited Availability of Value-Added Services
Opportunities
Aggressive Move Into the Rural Market
Use Upcoming Mobile Number Portability as "Launching Pad" to Grab Market Share of
Higher ARPU Users — and Ramp Up Focus on Data Revenue
Overseas Investments
Threats
Quicker Than Expected Slowing of Growth
Mobile Number Portability Risks Accelerating Churn of Subscribers From CDMA to

GSM
New Competitors

Indian Telecommunications

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Indian Telecommunications

Hochgeladen von

Copyright:

Verfügbare Formate

Indian telecommunication industry

An industrial analysis report of

INDIAN TELECOMMUNICATION INDUSTRY

A company analysis report submitted in partial fulfillment of

Under the esteemed guidance of

DEPARTMENT OF MANAGEMENT STUDIES

12/31/2009DEPT OF MANAGEMENT, RGMCET

This is to certify that Mr. V.v.phanidhara setty had undergone an

12/31/2009DEPT OF MANAGEMENT, RGMCET

S.NO CONTENTS PAGE NO

2 MARKET CONDITIONS 7-16

3 ENVIRONMENTAL FACTORS 17-25

4 KEY PLAYERS 26-39

12/31/2009DEPT OF MANAGEMENT, RGMCET

1.1, Introduction of the telephone

 1902 - First wireless telegraph station established between Saugor

12/31/2009DEPT OF MANAGEMENT, RGMCET

 1975 - First PCM system commissioned between Mumbai City

1.2, Industry capacity

12/31/2009DEPT OF MANAGEMENT, RGMCET

1.3, Emergence as a major player

1.4, Liberalization of telecommunications in India

12/31/2009DEPT OF MANAGEMENT, RGMCET

12/31/2009DEPT OF MANAGEMENT, RGMCET

1.5, Revenue and growth

Telephony Subscribers (Wireless and Landline): 525.85 million (Oct 2009)

Monthly Cell phone Addition: 16.67 million (Oct 2009)

12/31/2009DEPT OF MANAGEMENT, RGMCET

Projected Teledensity: 626 million, 46% of population by 2010.

12/31/2009DEPT OF MANAGEMENT, RGMCET

2.1, MAJOR MARKET TRENDS

12/31/2009DEPT OF MANAGEMENT, RGMCET

2.2, Demand Analysis

2.3, TARGETS SET BY THE GOVERNMENT

· 500 million connections by the year 2010.

· Provision of mobile coverage of 90% geographical area by 2010.

. 200 million rural subscribers by 2012

· Reduce urban-rural digital divide from present 25:1 to 5:1 by 2010.

. 20 million Broadband connections by 2010

· Broadband with minimum speed of 1 mbps.

· Broadband coverage for all Grampanchayats by the year 2010

. Broadband on demand is every village by 2012

· Increase sharing in urban areas to 70% by 2010.

5. Introduction of Spread of IPTV and Mobile TV

· IPTV in 600 towns by 2010.

12/31/2009DEPT OF MANAGEMENT, RGMCET

2.4, MAJOR PLAYERS

There are three types of players in telecom services:

• -State owned companies (BSNL and MTNL)

• -Private Indian owned companies (Reliance Infocomm, Tata Teleservices,)

• -Foreign invested companies (Vodafone -Essar, Bharti Tele-Ventures, Escotel, Idea

On October 1, 2000 the Department of Telecom Operations, Government of India became

12/31/2009DEPT OF MANAGEMENT, RGMCET

12/31/2009DEPT OF MANAGEMENT, RGMCET

12/31/2009DEPT OF MANAGEMENT, RGMCET

12/31/2009DEPT OF MANAGEMENT, RGMCET

2.5, Market shares of major companies

Operator Subscriber base Subscriber base (wire line)

2.6, Entry barriers in industry

12/31/2009DEPT OF MANAGEMENT, RGMCET

2.7, Segments in industry

12/31/2009DEPT OF MANAGEMENT, RGMCET

12/31/2009DEPT OF MANAGEMENT, RGMCET