Its clear most of the expansion in subscribers is set to occur in rural India & Indian’s rural telephone density has been languishing at around 8-10%. So, if 70% of total population is rural, the scope for growth in this Industry is unprecedented Introduction – Evolution Indian telecoms sector is more than 165 years old. Telecommunications was first introduced in India in 1851 when the first operational land lines were laid by the government near Kola (then Calcutta), although telephone services were formally introduced in India much later in 1881.
Further, in 1883, telephone services were merged with the postal system. In 1947, after India attained independence, all foreign telecommunication companies were nationalized to form the Posts, Telephone and Telegraph (OPT), a body that was governed by the Ministry of Communication. The Indian telecoms sector was entirely under government wineries until 1984, when the private sector was allowed in telecommunication equipment manufacturing only.
The government concretions its earlier efforts towards developing R in the sector by setting up an autonomous body – Centre for Development of Telemetric (C-DOT) in 1984 to develop state-of-the-art telecommunication technology to meet the growing needs of the Indian telecommunication network. The actual evolution of the industry started after the Government separated the Department of Post and Telegraph in 1985 by setting up the Department of Posts and the Department of Telecommunications (DOT). The entire evolution of the telecoms industry can be classified into three distinct phases.
Phase l- Pre-Liberation’s Era (1980-89) Phase al- Post Liberation’s Era (1990-99) Phase post 2000 Until the late ass the Government of India held a monopoly on all types of communications – as a result of the Telegraph Act of 1885. As mentioned earlier in the chapter, until the industry was liberalized in the early nineties, it was a heavily government-controlled and small-sized market, Government policies have played a key role in shaping the structure and size of the Telecoms industry in India.
As a exult, the Indian telecoms market is one of the most liberalized market in the world with private participation in almost all of its segments. The New Telecoms Policy (NTP-99) provided the much needed impetus to the growth of this industry and set the trend for lubrications in the industry. Factors Facilitating Growth of the Sector The phenomenal growth in the Indian telecoms industry was brought about by the wireless revolution that began in the nineties. Besides this, the following factors also Liberation’s The relaxation of telecoms regulations has played a major role in the development of the Indian telecoms industry.
The liberation’s policies of 1991 and the consequent influx of private players have led the industry on a high growth trajectory and have increased the level of competition. Observationally, the telecoms industry has received more investments and has implemented higher technology. Increasing Affordability of Handsets The phenomenal growth in the Indian telecoms industry was predominantly aided by the meteoric rise in wireless subscribers, which encouraged mobile handset manufacturers to enter the market and to cater to the growing demand.
Further, the manufacturers introduced lower-priced handsets with add-on facilities to cater to the increasing number of subscribers from different strata of the society. Now even entry-level handsets come with features like colored display and FM radio. Thus, the falling handset prices and the add-on features have triggered growth of the Indian telecoms industry. Prepaid Cards Bring in More Subscribers In the late nineties, India was introduced to prepaid cards, which was yet another milestone for the wireless sector.
Prepaid cards lured more subscribers into the industry besides lowering the credit risk of service providers due to its upfront payment concept. Prepaid cards were quite a phenomenon among firestorm users ho wanted to control their bills and students who had limited resources but greater need to be connected. Pre-paid cards greatly helped the cellular market to grow rapidly and cater to the untapped market. Further, the introduction of innovative schemes like recharge coupons of smaller denominations and life time incoming free cards has led to an exponential growth in the subscriber base.
Introduction of Calling Party Pays (CAP) The CAP regime was introduced in India in 2003 and under this regime, the calling party who initiated the call was to bear the entire cost of the call. This regime came o be applicable for mobile to mobile calls as well as fixed line to mobile calls. So far India had followed the Receiving Party Pays (RIP) system where the subscriber used to pay for incoming calls from both mobile as well as fixed line networks. Shifting to the CAP system has greatly fuelled the subscriber growth in the sector.
Changing Demographic Profile The changing demographic profile of India has also played an important role in subscriber growth. The changed profile is characterized by a large young population, a burgeoning middle class with growing disposable income, arbitration, increasing iterate levels and higher adaptability to technology. These new features have multiplied the need to be connected always and to own a wireless phone and therefore, in present times mobiles are perceived as a utility rather than a luxury.
Increased Competition & Declining Tariffs Liberation’s of the telecoms industry has fuelled intense competition, especially in the cellular segment. The ever-increasing competition has led to high growth of years. When the cellular phones were introduced, call rates were at a peak of RSI 16 per minute and there were charges for incoming calls too. Today, however, incoming calls are no longer charged and outgoing calls are charged at less than a rupee per minute. Thus, the tariff war has come a long way indeed.
Increased competition and the subsequent tariff war has acted as a major catalyst for attracting more subscribers. Apart from these major growth drivers, an improved network coverage, entry of CDMA players, growth of value-added services (VASS), advancement in technology, and growing data services have also driven the growth of the industry. Outlook The telecoms industry in India has experienced exponential growth over the past few ears and has been an important contributor to economic growth; however, the cut- throat competition and intense tariff wars have had a negative impact on the revenue of players.
Despite the challenges, the Indian telecoms industry will thrive because of the immense potential in terms of new users. India is one of the most-attractive telecoms markets because it is still one of the lowest penetrated markets. The government is keen on developing rural telecoms infrastructure and is also set to roll out next generation or 36 services in the country. Operators are on an expansion mode and are investing heavily on telecoms infrastructure. Foreign telecoms companies are acquiring considerable stakes in Indian companies.
Burgeoning middle class and increasing spending power, the government’s thrust on increasing rural telecoms coverage, favorable investment climate and positive reforms will ensure that Indian’s high potential is indeed realized. Features of Telecoms Industry 0 The Telecoms industry poses high entry and exit barriers. 0 Heavy investment is required to foray into this industry in terms of the equipments, the towers etc. 0 The market for telecoms industry can be divided into individual, corporate, rural and urban segments. On the basis of product offered, the market can be divided into fixed, mobile, internet and video telecoms services. The telecoms industry has limited global players in telecoms industry 0 These players are competing with each other in their spend on R&D in order to innovate and outrun the other companies. 0 In India, major telecoms players are acquiring smaller players and expanding their business leading to consolidation Current Market Scenario 0 300 million telephone subscribers today 0 The second largest telecoms network in the world, after China. 0 Growth can be attributed to liberalizing, reforms and competition. The major players in the the GSM market. Important development-Mobile Number Portability by the end of March 2009 Industry structure The top players in the industry are: 0 Reliance Communications Limited: Reliance is a $16 billion integrated oil exploration to refinery to power and textiles conglomerate. It is also an integrated telecoms service provider with licenses for mobile, fixed, domestic long distance and international services. Reliance Inform offers a complete range of telecoms services, covering mobile and fixed line telephony including broadband, national and international long distance services, data services ND a wide range of value added services and applications.
Reliance India Mobile, the first of Infusion’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 Inform plans to extend its efforts beyond the traditional value chain to develop and deploy telecoms solutions for Indian’s farmers, businesses, hospitals, government and public sector organizations.
Until recently, Reliance was permitted o provide only emitted 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 0 Birth Retailer Limited Birth Retailer founded by Sunnis Metal in 1985. The businesses at Birth Retailer have en structured into three individual strategic business units (Sub’s) Mobile Services, Retailer Delimited Services & Enterprise Services. The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecoms circles while the Retailer Delimited Services business offers broadband & telephone services in 95 cities and has recently launched a Direct-to-Home (HTH) service, Retailer digital TV.
The company provides end-to-end data and enterprise services to the corporate customers through its nationwide fiber optic backbone, last mile connectivity in fixed-line and mobile circles, Vast, ISP and international initiated access through the gateways and landing station Globally, Birth Retailer is the 3rd largest in-country mobile operator by subscriber base, behind China Mobile and China Unisom. In India, the company has a 24. 6% share of the wireless services market, followed by 17. 7% for Reliance Communications and 17. 4% for Avoidance Cesar.
BOSS Brat Sanchez Enigma Limited (known as BOSS,Linda Communications Corporation Limited) is a public sector telecommunication company in India. It is Indian’s largest Type: Telecommunication service provider Availability :Linda wide except Delhi and Iambi Founded :19th century, incorporated 2000 Slogan: Connecting India Revenue :US$ 9. 67 billion (2007) Owner :The Government of India Key people :Ukulele Goal (COM O MINT Manager Telephone Enigma Limited (NYSE:MET) is an Indian Government-owned telephone service provider in the cities of Iambi,Thane, New Delhi, and Nava Iambi in India.
The company was a monopoly until 2000, when the telecoms sector was opened to other service providers. MINT provides fixed line telephones, cellular connection of both GSM -?Adolph in(Postpaid) and Trump (prepaid) and WALL(CDMA) -?Guard-F W And Guard-Mobile and internet revise through dialup and DSL -? Broadband internet Tribal. MINT has also started Games on demand, video on demand and PIPIT services in India through its Broadband Internet service called Tribal. 0 videophone Cesar Avoidance Cesar, usually referred to simply as AVOIDANCE, is a cellular operator in India that covers 23 telecoms circles in India.
It was formerly known as Hutchison Cesar. It is based in Iambi.  Avoidance Cesar is the Indian subsidiary of Avoidance Group 67% and Cesar Group 33%. It is the second largest mobile phone operator in terms of revenue behind Birth Retailer, and third largest in terms of customers. 3] The company now has operations across the country with over 113. 77 million customers. On February 1 1, 2007, Avoidance agreed to acquire the controlling interest of 67% held by Lie Aka Shins Holdings in Hutch-Cesar for SIS$11. Billion, piping Reliance Communications, Hindu Group, and Cesar Group, which is the owner of the remaining 33%. The whole company was valued at USED 18. 8 billion.  The transaction closed on May 8, 2007. Despite the official name being Avoidance Cesar, its products are simply branded Avoidance. It offers both prepaid and postpaid GSM cellular phone coverage throughout India with good recent in the metros. Avoidance Cesar provides 2. GAG services based on 900 Mash and 1800 Mash digital GSM technology, offering voice and data services in 23 of the country’s 23 license areas.
It is among the top three GSM mobile operators of India. January-March quarter of 2011 and plans to spend up to $500 million within two years on its 36 networks. DATA TELEVISES: Data Televises is a part of the $12 billion Data Group, which has accompanies, over 200,000 employees and more than 2. 3 million shareholders. Data Televises provides basic (fixed line services), using Ichthyology in six circles: Maharajah’s including Iambi), New Delhi,Andorra Pradesh, Tamil Undue, Gujarat, and Karakas. It has over 800,subscribers.
It has now migrated to unified access licenses, by paying a RSI. 5. 45 billion ($120 million) fee, which enables it to provide fully invisibilities as well. The company is also expanding its footprint, and has paid. 4. 17 billion ($90 million) to DOT for 11 new licenses under the ICC(interconnect usage charges) regime. The new licenses, coupled with the circles in which it already operates, virtually gives the CDMA inappropriate a national footprint that is almost on par with BOSS and Reallocations..
The circles include Briar, Harlan, Himalaya Pradesh, Kraal,Kola, Arioso, Punjab, Restaurants, Attar Pradesh (East) & West and Wasteland. Major Players 0 There are three types of players in telecoms services: ; -State owned companies (BOSS and MINT) ; -Private Indian owned companies (Reliance 0 Inform, Birth Tell-ventures, Data Televises,) 0 Foreign invested companies (Watchfulness’s(AVOIDANCE), Scoter, Idea Cellular, PL Mobile, Spice Communications) Concentration ratio:concentration ratio of an industry is used as an indicator of the relative size of firms in relation to the industry as a whole.