This document provides an overview of the telecom sector in India. It discusses the history and growth of telecom in India, including key events and mergers. It also outlines the role of the government and regulatory bodies in telecom. Additionally, it covers topics like spectrum auctions, the advantages of India's market, value-added services, recent industry updates, and future technologies. The document concludes by discussing some of the top challenges facing the Indian telecom sector and its future roadmap.

1. NCRD’S Institute of Management Studies
Master in Management Science
2011
Telecom Sector in India
Operation Management
Add names

2. Content
History, Facts
GoI, Regulatory Bodies
Spectrum Action
India Advantage
VAS
Industry Updates
Future Technologies
Conclusion

3. History of Telecom in India- I
Merger of ETC &IRT to form
First Military Landline from Merger with the Postal service (IRCC) Indian Radio Telegraph
Fort William to Lalbazaar Cable Company
(Calcutta ) by the British Govt
1851 1881 1883 1923 1932 1947
First Civil landline service
introduced for the British Formation of Indian Radio Formation of Posts Telephone
Viceroy and his team Telegraph Company (IRT) & Telegraphs under Ministry of
Communication

4. History of Telecom in India- II
•1st call on Mobile phone •Cellular service For 3 months in a row
DOT established separate •Telecom Minister Sukh launched. India beats China for
from Postal system Ram(Delhi) to Jyoti Basu •New Telecom the maximum subs
(Calcutta) Policy(NTP) is adopted added every month
1985 1986 1995 1997 1999 2000 2009
DOT spilt into 3 :
TRAI created
•MTNL (metros) DOT becomes a corporation =
(Telecom Regulatory
•DOT (others) BSNL
Authority of India)
•VSNL (International)

5. Quick Facts
Source: TRAI Report May 2011 (in Mn)

6. Growing Numbers
Revenue(US$ billion)
Revenue(US$ billion)
43
32
20
15
10 11
9

7. Telecom Companies Bharti-Airtel,
WTTIL, Tata teleservices Vodafone, Idea, Relia
Nokia, nce, Tata Teleservices
Motorola, tower, QTIL
Samsung,
LG,
Sony Ericson
ARM,
Texas Instruments, IBM, Wipro,
Qualcomm, Aricent,
Infineon Tech Mahindra
Symbian, Google
Infinera, Cisco,
Alcatel Lucent, Nokia
Siemens, Huawei

8. Market Share
Operator Share May 2011

9. Handset market

10. Growth Avenues
Enterprise 3G
Telecom Services
Rural
Telephony Growth WiMax
Avenues
Infrastructure
Value Added
Sharing
Services
Virtual Private Managed Services
Network

11. Urban-Rural Telephony

12. Content
History, Introduction, Facts
GoI, Regulatory Bodies
Spectrum Action
India Advantage
VAS
Industry Updates
Future Technologies
Conclusion

13. Strategic Flow
 500 Mn Mobile and Wire line subscribers in India today
 Rs. 40,000 Crore quarterly revenue figures for this industry
Clear
Policy
So How all this happened?
Cheap tariff
Competition
regime

14. TRAI functions
Consumer
Protection
Ensure Quality of Service
Ensure Affordable Tariff
Regulate Interconnections
Regulation, Directions, Orders
Recommendations

15. Content
History, Introduction, Facts
GoI, Regulatory Bodies
Spectrum Auction
India Advantage
VAS
Industry Updates
Future Technologies
Conclusion

16. Spectrum Allocation
Need for Spectrum Allocation
• Spectrum auctions ensure the efficient use of spectrum by
allocating it to those entities that value it most, while also
generating revenues for governments.
• In order to allocate spectrum amongst competing service
providers, regulatory agencies often use auctions.
• The key challenge before regulatory agencies is to design
auctions in such a way as to foster competition while at
the same time ensuring that bidders can effectively use
the spectrum for their business.

17. Spectrum Allocation in India
• In India, telecom licences were auctioned
for basic and cellular services from 1991 by
the Department of Telecom (DoT).
• The entire country was divided into roughly
20 circles, categorized as A, B, or C
Circles depending upon their revenue potential.
• Required to seek Foreign partners.
• For cellular licences, Global System for
Mobile Communications (GSM) was the
chosen technology and for basic services, a
combination of fiber optic and wireless in
GSM&WLL the local loop (WLL) was selected.

18. Content
History, Introduction, Facts
GoI, Regulatory Bodies
Spectrum Auction
India Advantage
VAS
Industry Updates
Future Technologies
Conclusion

19. India’s Competitive Advantage
1. Fastest growing free market democracy
2. Cost advantage in product development and back office processing
3. Stable economic outlook – Decade long reforms
4. Huge market potential – one of the largest consumer markets
5. Large talent pool
Source: www.telenor.com

20. FDI in Telecom Sector largest sector to
Third
attract FDI in India
FDI in Telecommunication Sector (US$ million)
2008-09 2345.38
2007-08 1275.65
2006-07 521
2005-06 680
2004-05 129
2003-04 116
Source: IBEF Report

21. Content
History, Introduction, Facts
GoI, Regulatory Bodies
Spectrum Auction
India Advantage
VAS (Value Added Services)
Industry Updates
Future Technologies
Conclusion

22. VAS (Value Added Services)
SMS
VAS services, Bulk Messaging, B2B and B2C
Voice IVR
Mobile Radio, Voice chat, English Learning, Devotional
and Astrology, Music on Demand
Content downloads
Mobile WAP Portal
Consumer Applications
Enterprise solutions : Mobile CRM, Mobile SFA
CRBT (Caller ring back tones)
USSD
Message along with *141#
Flash alerts

23. VAS offerings

24. VAS market in India
VAS: Not a form of basic service but adds value
to the total service offering
Contributes to 10% of total revenue from
telecom operators
The corresponding figure in developed nations
is 25%

25. Present Segments
Population of India – 1,130 mn
Mobile Subscriber Base – 509 mn
GPRS Enabled – 70 mn
GPRS Activated – 17 mn
GPRS Users – 10 mn
Source: IAMAI Report

26. Why mobile VAS ?
Decrease in ARPU for telecom operators
Very low operating margins
Decreasing call rates: Lowest in the world @ 1p/sec
Increase in number of operators in each circle
Saturation in metro market: Over 100% tele-density in 4 metros

27. Rural VAS
Only 12% tele-density in rural areas as compared to 72% in urban areas
Huge market potential
Sachet model of VAS promotion
Localization content
• Local Mandi Rates
• Weather forecasts
• Health and job related information
• Train services

28. Content
History, Introduction, Facts
GoI, Regulatory Bodies
Spectrum Auction
India Advantage
VAS
Industry Updates
Future Technologies
Conclusion

29. Industry Updates
Idea Cellular’s Acquisition of Spice Telecom
• Idea acquired 40.8% stake of Spice Communications at Rs 77.30 a share for Rs 2,716 crore. There
was a share swap in which Spice shareholders got 49 Idea shares for every 100 Spice shares
held.
Vodafone’s entry into India
• Vodafone paid a discounted price of $10.9 billion in cash for acquiring the
52% stake held by Hutchison Telecom International (HTIL)
Telenor-Unitech Deal
• Telenor is in the process of acquiring controlling stake of 67.25% in Unitech
wireless via equity infusion
TTSL – DoCoMo Deal.
• Japanese carrier NTT DoCoMo acquired 26 per cent stake in Tata Teleservices
(TTSL).

30. Bharti-MTN deal
To create a $61-billion
Reasons for failure -
transnational telecom Takeaways for Bharti
Dual listing
goliath.
• Combined revenues of • Access to new • Indian rupee is not
$20 billion geographies with high fully convertible
• Over 200 million growth potential. • Not possible to go in
subscribers across • Greenfield for dual listing of
Africa, Asia and project, time- shares.
Middle East. consuming and capital • which allows people
intensive. to buy shares in the
stock exchanges of
one country and sell in
the bourses of the
other country

31. India 3G Story
In India, 3G mainly for voice? DoT looking to hike the reserve price for the auctions of
Indiatimes - Sep 8 2008 the pan-India 3G spectrum
TopNews - Jun 12 2009
India 3G kicks off; but at what cost?
CIOL - Jan 16 2009 India 3G auction may happen sooner than expected
Telecoms.com - Aug 27 2009
India 3G News: BSNL flips the switch
Source: Google Trends - Mar 5 2009
Product Reviews SK C&C, Reliance team on India 3G roll out
EE Times India - Oct 20 2009

32. Jan 14th 2010
• 3G – Rs 35 bn
Reserve Price • WiMax – Rs 17.5 bn
• EVDO – Rs 8.25 bn
• 2-3 times the reserve prices - to total at
Expected Bid least Rs65bn–Rs120bn.
• with no current presence in India have to
Foreign players pay an additional Rs 16.50bn for 2G
spectrum.
• relaxing the normal US$500m limit on
ECB external commercial borrowings

33. Content
History, Introduction, Facts
GoI, Regulatory Bodies
Spectrum Auction
India Advantage
VAS
Industry Updates
Future Technologies
Conclusion

34. Mobile Number Portability(MNP)
The Inhibitors
Huge Costs Infrastructure Upgrade
Customer Retention/Increased Cost Recovery and Bill
Competition Reconciliation/Query Processing
Source: Voice and Data

35. Generations
4G
10MBPS TO
3G 20 MBPS
600KBPS TO
2MBPS
2g
DATA RATE
14.4

36. Content
History, Introduction, Facts
GoI, Regulatory Bodies
Spectrum Auction
India Advantage
VAS
Industry Updates
Future Technologies
Conclusion

37. Top Ten Challenges
 Sustenance of same EBITDA
 Competitive tariffs
 VAS applications on Device
 Spectrum management
 Broadband expansion in Rural
 Transition to NGN
 Content Regulation of Data
 Ecosystem to facilitate M&A
 Reduce Circles to relax Roaming
 Alternate Technologies (Solar/Wind for
power back-up)

38. Road Ahead
People with and without mobile connections (in millions)
Not Connected Connected
604 Highest Number
Not Connected
661 People
720
510 36
91 25
271 71
140 165 96
China India USA Indonesia Brazil Pakistan
54.4% 43.6% 88.4% 60.5% 86.6% 57.6%
http://en.wikipedia.org/wiki/List_of_countries_by_number_of_mobile_phones_in_use

39. References
1. Trai – Quaterly Report (May 2011 ).
2. http://www.trichytalks.com
3. IBEF report 2007-08 : Telecommunication - MARKET & OPPORTUNITIES.
4. Cellular Statistics – Cellular Operator Association of India
5. IAMAI & eTechnology Group@IMRB: MOBILE VALUE ADDED SERVICES IN
INDIA- A Report.
6. Telenor Entering India: Investment Update
7. Voice and Data(May 2009): Mobile Number Portability - Poaching with
Portability.
8. Business India : Telecom Takeover, Bharti-MTN deal
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