Introduction about industry

Telecommunication is communication at a distance by technological means, particularly

through electrical signals or electromagnetic waves. The word is often used in its plural
form, telecommunications, because it involves many different technologies.
Early means of communicating over a distance included visual signals, such as
beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs. Other
examples of pre-modern long-distance communication included audio messages such as coded
drumbeats, lung-blown horns, and loud whistles. Modern technologies for long-distance
communication usually involve electrical and electromagnetic technologies, such
as telegraph, telephone, and teleprinter, networks, radio, microwave transmission, fiber optics,
and communications satellites.
Given this growth, telecommunications play an increasingly important role in the world
economy and the global telecommunications industry was about a $4.7 trillion sector in 2012.
The service revenue of the global telecommunications industry was estimated to be $1.5 trillion
in 2010, corresponding to 2.4% of the worlds gross domestic product (GDP).
A basic telecommunication system consists of three primary units that are always present in
some form:

A transmitter that takes information and converts it to a signal.

A transmission medium, also called the "physical channel" that carries the signal. An
example of this is the "free space channel".
A receiver that takes the signal from the channel and converts it back into usable
information.

For example, in a radio broadcasting station the station's large power amplifier is the transmitter;
and the broadcasting antenna is the interface between the power amplifier and the "free space
channel". The free space channel is the transmission medium; and the receiver's antenna is the
interface between the free space channel and the receiver. Next, the radio receiver is the
destination of the radio signal, and this is where it is converted from electricity to sound for
people to listen to.
Sometimes, telecommunication systems are "duplex" (two-way systems) with a single
box of electronics working as both a transmitter and a receiver. For example, a cellular
telephone is a transceiver. The transmission electronics and the receiver electronics in a
transceiver are actually quite independent of each other. This can be readily explained by the fact
that radio transmitters contain power amplifiers that operate with electrical powers measured in
the watts or kilowatts, but radio receivers deal with radio powers that are measured in

the microwatts or nano watts. Hence, transceivers have to be carefully designed and built to
isolate their high-power circuitry and their low-power circuitry from each other.
Telecommunication over fixed lines is called point-to-point communication because it is
between one transmitter and one receiver. Telecommunication through radio broadcasts is
called broadcast communication because it is between one powerful transmitter and numerous
low-power but sensitive radio receivers.
Telecommunications in which multiple transmitters and multiple receivers have been
designed to cooperate and to share the same physical channel are called multiplex systems. The
sharing of physical channels using multiplexing often gives very large reductions in costs.
Multiplexed systems are laid out in telecommunication networks, and the multiplexed signals are
switched at nodes through to the correct destination terminal receiver.

Telecommunication networks
A communications network is a collection of transmitters, receivers, and communications
channels that send messages to one another. Some digital communications networks contain one
or more routers that work together to transmit information to the correct user. An analog
communications network consists of one or more switches that establish a connection between
two or more users. For both types of network, repeaters may be necessary to amplify or recreate
the signal when it is being transmitted over long distances. This is to combat attenuation that can
render the signal indistinguishable from the noise. Another advantage of digital systems over
analog is that their output is easier to store in memory, i.e. two voltage states (high and low) are
easier to store than a continuous range of states.

Economic impact
Microeconomics:On the microeconomic scale, companies have used telecommunications to help build global
business empires. This is self-evident in the case of online retailer Amazon.com but, according to
academic Edward Lenert, even the conventional retailer Wal-Mart has benefited from better
telecommunication infrastructure compared to its competitors. In cities throughout the world,
home owners use their telephones to order and arrange a variety of home services ranging from
pizza deliveries to electricians. Even relatively poor communities have been noted to use
telecommunication to their advantage. In Bangladesh's Narshingdi district, isolated villagers use
cellular phones to speak directly to wholesalers and arrange a better price for their goods. In Cte
d'Ivoire, coffee growers share mobile phones to follow hourly variations in coffee prices and sell
at the best price.

 Macroeconomics:The economic benefits of good telecommunication infrastructure, there is increasing worry

about the inequitable access to telecommunication services amongst various countries of the
worldthis is known as the digital divide. From this information, as well as educational data, the
ITU was able to compile an index that measures the overall ability of citizens to access and use
information and communication technologies. Using this measure, Sweden, Denmark
and Iceland received the highest ranking while the African countries Nigeria, Burkina Faso and
Mali received the lowest.

Social impact
Telecommunication has played a significant role in social relationships. Nevertheless
devices like the telephone system were originally advertised with an emphasis on the practical
dimensions of the device (such as the ability to conduct business or order home services) as
opposed to the social dimensions. It was not until the late 1920s and 1930s that the social
dimensions of the device became a prominent theme in telephone advertisements. New
promotions started appealing to consumers' emotions, stressing the importance of social
conversations and staying connected to family and friends.
Since then the role that telecommunications has played in social relations has become
increasingly important. In recent years, the popularity of social networking sites has increased
dramatically. These sites allow users to communicate with each other as well as post
photographs, events and profiles for others to see. The profiles can list a person's age, interests,
sexual preference and relationship status. In this way, these sites can play important role in
everything from organizing social engagements to courtship.

Other impacts
In cultural terms, telecommunication has increased the public's ability to access music
and film. With television, people can watch films they have not seen before in their own home
without having to travel to the video store or cinema. With radio and the Internet, people can
listen to music they have not heard before without having to travel to the music store.

Government
Many countries have enacted legislation which conforms to the International
Telecommunication Regulations established by the International Telecommunication Union
(ITU), which is the "leading UN agency for information and communication technology issues."

In 1947, at the Atlantic City Conference, the ITU decided to "afford international protection to
all frequencies registered in a new international frequency list and used in conformity with the
Radio Regulation." According to the ITU's Radio Regulations adopted in Atlantic City, all
frequencies referenced in the International Frequency Registration Board, examined by the board
and registered on the International Frequency List "shall have the right to international protection
from harmful interference."
From a global perspective, there have been political debates and legislation regarding the
management of telecommunication and broadcasting. The history of broadcasting discusses
some debates in relation to balancing conventional communication such as printing and
telecommunication such as radio broadcasting. The onset of World War II brought on the first
explosion of international broadcasting propaganda. Countries, their governments, insurgents,
terrorists, and militiamen have all used telecommunication and broadcasting techniques to
promote propaganda. Patriotic propaganda for political movements and colonization started the
mid-1930s. In 1936, the BBC broadcast propaganda to the Arab World to partly counter similar
broadcasts from Italy, which also had colonial interests in North Africa.

3.Study of world market

Global Telecom Scenario

The global telecommunications (telecom services) industry was estimatedUSD1.71 trillion in

2010. An overwhelming 77% of this sum came from the Telecommunications services
(USD1.32tr). Revenues from fixed-line services stood atUSD449 billion, mobile services
were USD572 billion, and telecom related services such as data communications, telex
accounted for the rest in the services section.
In future the telecom value chain is bound to undergo a significant change, with a move
towrods convergence of information , telecommunications and entertainment and pacing
up the usage of 3G mobile services. The industry will see many M&A and 3G
implementations in the future, but it is the customer who would have the final say
and, decide the future trend of the industry.
The goloble Telecommunications Industry Insight -2006 provides an in depth
coverage of the telecom industry (excluding telecom service and equipment) as a
whole.

List of corporate:BSNL
The Bharat Sanchar Nigam Limited, countrys largest cellular service operator was set up in the
year 2000. It is a state owned telecom company with its headquarters located in New Delhi.
BSNL is also the largest land line telephone establishment in India. As of April, 2011 87.1
million users have been reported to be BSNL users.
MTNL
Mahanagar Telephone Nigam Limited (MTNL) was set up in the year 1985, to run telecom
operations in the major metro cities of India, Mumbai and Delhi. Its headquarters are based in
Mumbai. MTNL was the first company in India to initiate 3G services in India, having the brand
name of MTNL 3G Jadoo Services which provided options as Video call, Mobile TV, Mobile
Broadband etc to the customers.
Airtel
Also known as Bharti Airtel Limited was started in July 1995, with its head office based in New
Delhi. Airtel runs its operations in as many as 19 countries across the world and is also ranked
fifth as telecom service provider globally. As of April 2011, figures show that Airtel has over
164.61 million users which make it the biggest mobile service operator in India. Its service
includes both 2G and 3G facilities.
Reliance Communications

Also known as RCOM was set up in 2004, with its head office in Navi Mumbai. Reliance
Communications as of now has more than 128 million users all across the world.
Aircel
Aircel was founded in 1999, with its head office in New Delhi. It is a joint enterprise between
Maxis Communications and the Apollo Hospitals.
Vodafone Essar
Vodafone Essar was founded in 1994 with its head office at Mumbai. Vodafone provides
services to 23 telecom circles across India.
Tata Indicom
The Tata Teleservices was founded in 1996, with its headquarters in Navi Mumbai.
Idea Cellular
Idea Cellular was started in 1995, with its head office in Mumbai. It also provides 3G services to
its subscribers.
Virgin Mobile
Virgin Mobile started its services in India in 2008, March. It is a U.K. based company.
Uninor
This Company is a joint venture between Telenor Group and Unitech Group and was started in
2009.

PESTAL analysis of telecommunication industry

Political Factor
India is politically very unstable, whenever the government changes, its policies are also changed and
that hampers the functioning of every business sector, so is the telecom sector affected.
If any business enterprise wants to expand its business say for example outside the country it has to
check out the political relations with that country depending upon the political relations with that
country that will affect the operations of the business in that country also.

Economic Factors
The Indian economy is growing at faster rate , and most important the population of India the mostly
youth , so entering in the Indian market will be a good sign of investment , the government of India is
putting good effort in encouraging the FDI in the country by providing tax benefits.
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
An attractive trade and investment policy and lucrative incentives for foreign collaborations have
made India one of the worlds most attractive markets for the telecom equipment suppliers and
service providers.

Social Factor
1). Age distribution:
The telecom industry in India like Vodafone, Airtel, Idea etc are selling their products
according to various age distribution basis. They make the schemes available to youngsters with low
call rates and messages scheme
For adults if we see make call rates low in std section.
2). Change in tastes and preferences:
As we know price war is going on so the customer can shift over to next brand which cost
less to him so the company has to go according to the needs and preferences of the customer.
3). Social welfare:

Many companies are doing social welfare and taking initiatives for that we can examine the
latest e.g. of idea cellular co. for 26 Nov 2009 that it collected money for the victims of 26/11 attack
by the subscribers of idea when any call was made.
4).Consumer buying patterns :
The buying behaviour of the customers in India is changing , the customers are shifting to
buy the new products and service according the offers and schemes available to them.

Technological Factor
Replacement Technology
Technology in India is replacing very fast with change in time, as the economy is growing
the technology is also, so the company bringing new technology will be very successful.
Research funding
Govt is providing various tax benefits and subsidies to the players which are in research and
development fields of telecom sector , the govt has also open various research institutes where the
research is done with the collaboration of various private research companies .
Telecommunications companies with 3G services will no longer be allowed to avail of tax
breaks found under Section 80 IA of the Income Tax Act.

Legal Factor
Until 1985, the Indian Telegraph Act of 1885 and the Wireless Telegraph Act of 1932
provided the legal basis for the central government's telecommunications monopoly. Under these
laws, posts and telecommunications were combined in one P&T department run by the Ministry of
Communications. In the late 1970s and early 1980s protests against poor service by subscribers,
politicians, industrialists, and business leaders coincided with global and national pressure for
liberalization. As a result, a parliamentary committee was established in 1981, which recommended
numerous structural and service improvements.
A separate Department of Telecommunications (DoT) was established in 1985, under the
Ministry of Communications and two supposedly public sector undertakings (PSUs)(VSNL and
MTNL) were created to expand, develop, and manage crucial segments of the Indian
telecommunications system.

Ecological Factor

In present scenario, telecommunication services are widely used all over the world. People
extensively use telephone services, internet services and many more. Initially, there were wired
phones which are not hazardous to our health and also to the environment. Now, more than 80
million people use pocket-sized cellular phones as a principal form of communication and many
researches proved that these smaller phones, with their smaller antenna, increase exposure to
microwaves and pose a potential health threat to the frequent user.

GLOBAL GROWTH :FIXED LINES vs MOBILE:-

Telepohne and internet users Worldwide

(MILLIONS)

Size of the industry

The Telecom had only 54.6 million telephone subscribers in 2003, the number increased
to 429.7 million at the end of March 2009 and further to 562 million as on October 31, 2009
showing addition of 2.49 million during the period from March to December 2009.The increase
is entirely due to the spectacular increase in wireless connections at a compound annual growth
rate (CAGR) of 60 % per annum since 2004. Presently India has one of the lowest tariffs in the
world and is the fastest growing teIecom markets in the world. Indian telecom has become the
second largest wireless network in the world with 525.1 million wireless connections. With
supportive policies, broadband subscribers grew from 0.2 million in 2005 to 6.2 million by endApril 2009 and about to 7.98 million by end-December 2009.

Total contribution to the economy/ sales

As economic growth of India continues to be stable, 8% as the Indian customers continue

to hold the currently under-penetrated mobile technology, as the regulatory policy continues to
favor investment in the sector. India's telecom service revenue was ~USD 30 billion in 2008, and
Ernst and Young analysts believe it is projected to almost double to ~USD 55 billion by 2012,
thereby contributing over 6% to the GDP. The Indian Telecom industry is on the path of
continuously increasing its productivity levels. As an Economic Times survey taken for 200
companies (arranged in terms of value of output) finds that the incremental capital output ratio
(ICOR), that measures the output generating capacity of incremental capital, has improved from
0.62 in 2005-06 to 0.59 in 2006-07.

Domestic and Export Share

The Indian Telecom Industry manufacturing contributes about two-thirds of the total
exports of the country. It has been estimated that manufacturing exports would increase from
US$ 40 billion in 2002 to US$ 300 billion in 2015, simultaneously increasing its share in world
manufacturing trade from 0.8 % to 3.5 %.

4.Study of indian market

INTRODUCTION TELECOM INDUSRTY IN INDIA

Telecom in India is an economic miracle which has impacted the lives of millions and
contributing immensely towards Indias socio-economic development. Industry had a solid past
since the first Experimental Electric Telegraph Line got started between Calcutta and Diamond
Harbour in 1850 followed by first Indian Telegraphic Act in 1855. In 1881, for the first time,
Licences were granted to Private Companies to operate Telephone Systems at Madras, Bombay,
Rangoon and Calcutta.
As on March 31, 1948, there were 7330 telegraph offices, 321 telephone exchanges with 82,895
telephones, and in addition 28,155 telephones were with private and private branch exchanges.
After independence Government of India took complete control over the telecom sector and
brought it under the Post & Telegraph Department.
The initial phase of telecom reforms started in 1984 when the Centre for Development of
Telematics (C-DoT) was set up for developing indigenous technologies and permissions were
given to the private sector to manufacture subscriber-equipment. There was de- licensing of
manufacturing of telecom equipment in 1991. The new Economic Policy of India was announced
on July 24, 1991 and aimed at meeting India's competitiveness in global market; rapid growth of
exports, attracting foreign direct investment and stimulating domestic investments. In order to
attain the goals of New Economic Policy, telecommunication services of world class were
needed and it was considered necessary to focus and give high priority to the development of
telecom services in the country. Accordingly, the Government formulated the National Telecom
Policy -1994 (NTP 1994-attached).

At the time of formulation of NTP 1994, telephone density in India was 0.8 per 100 persons as
against world average of 10 per 100 persons. Today, Indias telecom industry is the worlds
second-largest market. The total subscriber base (including wire line and wireless) in the sector
reached 886 millions in June 2011. In the last decade, the penetration levels has risen over 50
per 100 persons, with the mobile segment leading this growth. The advent of NTP 1999 paved
the way for aggressive growth in the wireless subscriber base.
To facilitate India's vision of becoming an IT super power and develop a world class telecom
infrastructure in the country, a high level Group on Telecommunications (GoT) drafted New
Telecom Policy 1999 (NTP 1999-attached) and after the approval of the Cabinet, NTP 1999 was

announced to be effective from April 1, 1999. The NTP 1999 recognized that providing world
class telecommunications infrastructure and information, was the key to rapid economic and
social development of the country. Further, it was considered critical not only for the
development of the Information Technology Industry, but also that it had wide spread
ramification on the economy of the country. Added to this, it was anticipated that going forward
in this sector would contribute to a major part of Gross Domestic Product (GDP) of the country.
The Policy focused on creating an environment which enabled continued attraction of investment
in the sector and allowed creation of communication infrastructure by leveraging on
technological development and today Indias mobile market is the second-largest of its kind in
the world after China. During the period between FY00 and FY11, the wireless subscriber base
in India grew at a Compound Annual Growth Rate (CAGR) of 77.5% to reach 851.7 million
subscribers in June, 2011.
Mobile services were commercially launched in 1995 in the country. In the initial years of
mobile telephony, the growth in the number of subscribers was very low, with average monthly
subscriber additions in the range of 0.050.1 million subscribers. Today, the wireless segment
adds around 15 to 20 million subscribers each month. Such phenomenal growth can be attributed
primarily to the countrys large population, high economic growth, and high-competition in the
sector, reduced tariffs and the introduction of positive and enabling regulatory reforms especially
facilitating the sharing of infrastructure.
While under NTP 1999, the targets were achieved well in advance yet urban-rural divide needs
to be filled-up. The urban subscribers account for more than 66% of the overall subscriber base.
Similarly, broadband subscribers are concentrated in Urban Areas primarily on account of
affordability. The recent announcement of NTP 2011 would offer many further opportunities in
the sector around Broadband, Equipment Manufacturing & Telecom Infrastructure.
Indian Telecom Industry started in 1851 when the first operational land lines were laid by
the government near Calcutta (seat of British power). In 1881 the Telephone services were
introduced in India and telephone services were merged with the postal system in 1883. In 1923
the Indian Radio Telegraph Company (IRT) was formed. In 1947 after the independence, all the
foreign telecommunication companies were nationalized to form the Posts, Telephone and
Telegraph (PTT), a monopoly run by the government's Ministry of Communications. The Indian
Telecom Industry was considered as a strategic service and best to bring under state's control. In
1980 when the private sector was allowed in telecommunications equipment manufacturing the
first wind of reforms in telecommunications sector began to flow.
Department of Telecommunications (DOT) was established which was an exclusive
provider of domestic and long-distance service that would be its own regulator (separate from the
postal system). Government has two wholly owned companies which were created as: the Videsh
Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar

Telephone Nigam Limited (MTNL) for service in metropolitan areas in 1986. In 1990's the
opening up of economy led to the benefits of telecom Industry. In 1994 the National Telecom
Policy (NTP) was formulated which was the first attempt to give a comprehensive roadmap for
the Indian telecommunications sector. Telecom Regulatory Authority of India (TRAI) was
created in 1997. It was formed to act as a regulator to facilitate the growth of the telecom sector.
Indian Telecom Industry can be divided into two segments: Fixed Service Provider
(FSPs), and Cellular Services. The Indian Fixed line services consist of basic services, national
or domestic long distance and international long distance services. The state operators (BSNL
and MTNL), account for almost 90 % of revenues from basic services. In selective urban areas
the Private sector services are presently available which collectively account for less than 5 % of
subscriptions. However, private services focus on the business/corporate sector, and offer
reliable, high- end services, such as leased lines, ISDN, closed user group and
videoconferencing.

Brief introduction

Indian Telecom Industry is the fastest growing and 5th largest in the world at 110.01
million connections. The subscriber base has grown by 40% in 2005 and has reached the
expectations of 250 million in 2007. Over the years, two out of every three new telephone
connections are wireless. Consequently, wireless now accounts for 54.6% of the total telephone
subscriber base, as compared to only 40% in 2003. Wireless subscriber has grown to 2.5 million
new subscribers every month from 2007.
The wireless subscriber base skyrocketed from 33.69 million in 2004 to 62.57 million in 2005.
The wireless technologies currently in use in theIndian Telecom Industry is Global System for
Mobile Communications (GSM) and Code Division Multiple Access (CDMA). The industry
presently has 9 GSM and 5 CDMA operators providing mobile services in 19 telecommunication
circles and 4 metro cities, covering more than 2000 towns across the country and the
connectivity numbers are still growing for Indian Telecom Industry. Telecom Industry in India is

regulated by the Telecom Regulatory Authority of India (TRAI). It has been able to earn a good
reputation for its transparency and competence. Telecom Industry community has three types of
players.

State owned companies like - BSNL and MTNL.

Privately owned Indian companies like - Reliance Infocomm and Tata Teleservices.
Companies like - Hutchison-Essar, BPL Mobile, Bharti Tele-Ventures, Idea Cellular,
Escotel Spice Communications, etc were done with foreign investments.

Indian Telecom Industry ' services is not only confined to basic telephone but also
extends to internet, broadband (both wireless and fixed), cable TV, SMS, IPTV, soft
switches, etc. The Government Broadband Policy, aimed at 9 million broadband
connections and 18 million internet connections in 2007. Telecom Industry today in India
is expected to contribute nearly 1% to India's GDP which is heartening and estimated to
grow further and brighten the Scenario of Indian Telecom Industry.

Market capitalization

The Indian Telecom industry has been playing an important role in the world economy and
global revenues in 2008 were USD 4 trillion, expected to grow at a steep 11% p.a. CAGR over
the next 2 years. By 2013 almost half (~USD 1.7 trillion) of telecom revenues accrue from
service revenue. Analysts believe that the revenue is expected to grow significantly to ~USD 2.7
trillion. Today 20% of the world population has access to the Internet. The telecom industry is
vast and offers a wide range of career opportunities on both the hardware and software fronts.
Opportunities in mobile telephony, internet protocol media systems, wireless communications,
GSM, GPRS and CDMA technology, VoIP, data networks and optical networks are amongst the
others.

Size of the industry

The Indian Telecom had only 54.6 million telephone subscribers in 2003, the number
increased to 429.7 million at the end of March 2009 and further to 562 million as on October 31,
2009 showing addition of 2.49 million during the period from March to December 2009.The
increase is entirely due to the spectacular increase in wireless connections at a compound annual
growth rate (CAGR) of 60 % per annum since 2004. Presently India has one of the lowest tariffs
in the world and is the fastest growing teIecom markets in the world. Indian telecom has become
the second largest wireless network in the world with 525.1 million wireless connections. With
supportive policies, broadband subscribers grew from 0.2 million in 2005 to 6.2 million by endApril 2009 and about to 7.98 million by end-December 2009.

7.players in industry
Key players:The telecom industry can be categorized into the following categories;
India's teledensity has improved from under 4% in March 2001 to around 73% by the end of
March 2013. Cellular telephony continues to be the fastest growing segment in the Indian
telecom industry. The mobile subscriber base (GSM and CDMA combined) has grown from
under 2 m at the end of FY00 to touch 863 m at the end of March 2013. Tariff reduction and
decline in handset costs has helped the segment to gain in scale. The cellular segment is
playing an important role in the industry by making itself available in the rural and semi
urban areas where teledensity is the lowest.

The fixed line segment continues to decline in terms of the subscriber base. It has
declined to 30.21 m subscribers in March 2013 from 32.17 m in March 2012. The decline
was mainly due to substitution of landlines with mobile phones.

As far as broadband connections (>=256 kbps) are concerned, India currently has a
subscriber base of 15.05 m. Broadband penetration received a boost from the auction of
broadband spectrum. The network providers have stated that they would be looking at
boosting the contribution of data to their revenues. This bodes well for the future of
broadband services.
Major market are covered by six player as of Decembers 2013
players

Market share

Bharti Airtel

22.55 %

BSNL

10.96%

TTSL

7.31%

Vofafone India

17.82%

Idea Cellular

14.48%

RCOM

13.68%

Others

13.52%

Market share
13%

Bharti Airtel

23%

BSNL

14%
11%

TTSL
Vofafone India

14%

7%
18%

Idea Cellular
RCOM
Others

9.Key issue and current trends

FDI of 74% is allowed subject to license granted by Department Of Telecommunication

In Basic, Cellular, Paging and Value Added Service and Global Mobile Personal
Communications by Satellite.
FDI up to 100% is allowed for dark fibre, electronic and voice mail. The condition set
was that these companies would divest 26% of their equity in favor of Indian companies
in five years, provided they were listed in other parts of the world.
FDI of 100% was allowed in telecom manufacturing.
The new trend in the Indian Telecom Industry is the 3G or Third Generation technology
which is a convergence of various Second Generation telecommunication systems. The
technology is intended for Smartphones - multimedia cell phones which consists of Video
broadcasting and other e-commerce services such as, stock transactions and e-learning
which will now be made possible much faster. It offers 3 Mbps speed for downloading,
which is very high as compared to that of the 2G technology.
Mobile Number Portability is the service which allows any subscriber to change his
service provider without changing his mobile phone number. The announcement of the
guidelines has made telecom service providers to improve the quality of service to avoid
losing subscribers.
Value added Services (VASs): Mobile VASs include text or SMS, menu-based services,
downloading of music or ring tones, mobile TV, videos, streaming, and sophisticated mcommerce applications.
Manufacturing: The Indian telecom industry today manufactures a vast range of telecom
equipment using state-of-the-art technology. Indian has become hub of many renowned
telecom companies for even manufacturing bases in India. The production of telecom
equipment has increased from US$ 9.09 billion during 2007-08 to US$ 10.75 billion
during 2008-09
In R&D the favorable factors such as facilitative policies, large talent pool and low
labour cost can provide an impetus to the telecom manufacturing industry in the country.
Exports increased from US$ 88.61 million in 2002-03 to US$ 2.42 billion in 2008-09
accounting for 21 % of the equipment produced in the country.

INDIAN TELECOM AT A GLANCE IN 2011 2012

The telecom sector continues to grow,in a steady phase. The total number of telephones
increased from 206.8 million on 31 March 2007 to 926.95 million on 31 December 2011. Teledensity is an important indicator of telecom penetration in the country. It has increased from 18.2
per
cent
in
March
2007
to
76.8
per
cent
in
December
2011.
Tele-density varies across areas and there is a significant urban-rural divide. While it reached
167.4 per cent in the urban areas at the end of December 2011, rural tele-density was only 37.5
per cent.

INDIAN TELECOM INDUSTRY AT A GLANCE IN 2012 - 2013

The telecom sector has been one of the fastest growing sectors in recent years in India. It
is now the second largest telephone network in the world, after China. Tele-density, which shows
the number of telephones per 100 persons, was 76.75 per cent at the end of October 2012.
However with the growth of mobile telephony the number of landline telephones has declined
from 32.17 million as on end March 2012 to 30.95 million as on 31 October 2012. Wireless
telephones now account for 96.7 per cent of all telephones. After the Broadband Policy came
into force in 2004, several measures have been taken to promote broadband penetration in the
country. As a result, there were 22.86 million internet subscribers including 13.79 million
broadband subscribers at the end of March 2012.
Broadband subscribers increased to 14.81 million by the end of this financial year. India
is expected to have around 130.6 million mobile internet users by March 2014, according to a
joint study by the Internet and Mobile Association of India (IAMAI) and Indian Market Research
Bureau (IMRB). The number of users accessing internet through mobile devices was 87.1
million in December 2012.
India's internet industry can contribute up to US$ 100 billion to India's gross domestic
product (GDP) and generate about 22 million jobs by 2015. The Indian telecom industry's
contribution is likely to increase upto 3.3 per cent of the country's GDP by 2015. The
telecommunications industry in India attracted foreign direct investments (FDI) worth US$
12,623 million between April 2000 to December 2012, an increase of 7 per cent to the total FDI
inflows in terms of US$, according to the latest data published by Department of Industrial
Policy and Promotion (DIPP).

10.PESTEL analysis of telecommunication industry

PESTAL analysis

A management technique that enables an analysis of four external factors that may impact the
performance of the organization. These factors are: Political, Economic, Social, and
Technological.Situation
analysis in
which
political-legal
(government stability,
spending, taxation,) economic (inflation, interest rates, unemployment), socio-cultural
(demographics,
education, income
distribution),
and
technological
(knowledge generatio, conversion ofdiscoveries into products, rates of obsolescence) factors are
examined to chart an organization's long-term plans.

POLITICAL FACTORS

India is politically very unstable, whenever the government changes, its policies are also
changed and that hampers the functioning of every business sector, so is the telecom sector
affected.
If any business enterprise wants to expand its business say for example outside the country it has
to check out the political relations with that country depending upon the political relations with
that country that will affect the operations of the business in that country also.

1. 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 Indias competitiveness in global market
and promoting exports, attractive FDI and stimulating domestic investment, ensuring
Indias 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.

2. 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) corporatised in 2000.

Spectrum Management made transparent and more efficient

3. 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.
TRAIs 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.
4. Wars and Conflicts
The country is presently peaceful and in coming future their is no chance of any war in the
country ,so investing in the india is quiet good and meaningful .
Regarding conflicts the country is having internal political conflict , which in result are little bit
harmful for investing as government stability is not very strong.
Economic Factors

1. Economy situation
GDP -$1.367 trillion (2010)
GDP growth 6.7%
Inflation 9.9% (March 2010)
The Indian economy is growing at faster rate , and most important the population of India the
mostly youth , so entering in the Indian market will be a good sign of investment , the
government of India is putting good effort in encouraging the FDI in the country by providing
tax benefits.
2. Economy Trends
The continuing dominance of youth - Youngsters are different from oldies in a hundred ways,
and anyone can make a long list of the differences. How this will affect Indian society cannot
really be predicted, except to say that it will be more mobile (think more migrants), and more

volatile (stronger responses to frustrations-- one manifestation being the spread of extremist Left
ideology in some 60 districts).
It will adapt faster to new trends, and marketers will be encouraged to focus on low-cost
products and services because youngsters usually have less money. It will probably mean that the
two-parent home (for nurturing children) will remain the predominant norm for long, and that
there will be a strong saving habit because families will be planning (among other things) for
their children's educational future.
India's increasing openness to the world -The foreign trade component of India's GDP (if you
include trade in both goods and services, like software) is now about 55 per cent -- nearly three
times what it used to be. Foreign institutional investors own about 25 per cent of India's listed
stock. And Indian firms were buying three overseas companies a week, through 2006.
A country that is open to the world reacts in fundamentally different ways from a closed system
(of the kind that India used to be).
There is greater self-confidence, faster acceptance of new influences and ideas, a willingness to
accept global benchmarking, and a speedier response to changing circumstance. It is simply a
more adaptive and therefore a more efficient system. Translate that to mean more productivity
growth.
The growth of the middle class- In 2009-10, the National Council for Applied Economic
Research forecasts it will be 173 million. Marry that with growing urbanisation, and it is a safe
guess that well over a third of all Lok Sabha constituencies will have a sizeable middle class and
urban voter base. Think, then, of the many changes this might bring about. The obvious point is
about growth of consumption, but we can go beyond that.
The spread of connectivity and awareness- A country that has 5 million phones and another with
180 million; between a country with 10 million TV sets and one with 120 million; between a
country whose trucks move at 25 km per hour on the highways (counting the time taken for
stops), and 50 km per hour.
3. Taxation specific to product/services
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 fiber (IP Category I);

Electronic Mail; and
Voice Mail

4. Investment Opportunities and Incentives

An attractive trade and investment policy and lucrative incentives for foreign collaborations have
made India one of the worlds 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, value added services, NLD, ILD, ISPs - and global mobile personal
communications by satellite.
Full reparability of dividend income and capital invested in the telecom sector.
SOCIAL FACTOR
1). Age distribution:
The telecom industry in India like Vodafone, Airtel, Idea etc are selling their products
according to various age distribution basis. They make the schemes available to youngsters with
low call rates and messages scheme
For adults if we see make call rates low in std section.
2). Change in tastes and preferences:
As we know price war is going on so the customer can shift over to next brand which
cost less to him so the company has to go according to the needs and preferences of the
customer.
3). Social welfare:
Many companies are doing social welfare and taking initiatives for that we can examine
the latest e.g. of idea cellular co. for 26 Nov 2009 that it collected money for the victims of 26/11
attack by the subscribers of idea when any call was made.
4).Consumer buying patterns:The buying behaviour of the customers in India is changing , the customers are shifting to
buy the new products and service according the offers and schemes available to them.

TECHNOLOGICAL FACTOR
Replacement Technology
Technology in India is replacing very fast with change in time, as the economy is growing the
technology is also, so the company bringing new technology will be very successful.

Research funding
Govt is providing various tax benefits and subsidies to the players which are in research and
development fields of telecom sector , the govt has also open various research institutes where
the research is done with the collaboration of various private research companies .
Telecommunications companies with 3G services will no longer be allowed to avail of tax breaks
found under Section 80 IA of the Income Tax Act.
The tax breaks under Section 80 IA are given to companies building infrastructure. In the
telecommunications sector, companies can choose a 10 year period out of the first 15 years of
operations to qualify for the tax benefits.
Companies can choose to avail of a 100 percent exemption on taxable profit in its first five years
and a 30 percent exemption for the next five years.

Innovation potential
Innovations potential in India for technology is very high as the internet and broadband and 3G
and 4G services are still niche so coming in India is very profitable

LEGAL FACTOR
Until 1985, the Indian Telegraph Act of 1885 and the Wireless Telegraph Act of 1932 provided
the legal basis for the central government's telecommunications monopoly. Under these laws,
posts and telecommunications were combined in one P&T department run by the Ministry of
Communications. In the late 1970s and early 1980s protests against poor service by subscribers,
politicians, industrialists, and business leaders coincided with global and national pressure for
liberalization. As a result, a parliamentary committee was established in 1981, which
recommended numerous structural and service improvements.

A separate Department of Telecommunications (DoT) was established in 1985, under the

Ministry of Communications and two supposedly public sector undertakings (PSUs)(VSNL and
MTNL) were created to expand, develop, and manage crucial segments of the Indian
telecommunications system.
The National Telecom Policy (NTP) of 1994 provided the basis for liberalizing the
telecommunication market. It recognized the importance of liberalization and private sector
participation as key elements of economic development. With the entry of private sector in the
provision of telecommunication services a need was felt to have an independent regulatory body.
The above requirement was indicated in the guidelines issued for entry of private sector in basic
telecom service. Accordingly, Telecom Regulatory Authority of India (TRAI) was established in
the year 1997 in pursuance of TRAI (Ordinance) 1997, which was later replaced by an Act of
Parliament, to regulate the telecommunication services. Legal framework of telecom in India is
supported by TRAI (Telecom Regulatory Authority of India), having purpose of Independent
regulator to control telecom industry
India continues to be one of the fastest growing telecom markets in the world. Reforms
introduced by successive Indian governments over the last decade have dramatically changed the
nature of telecommunications in the country. The sector ranks fifth in the world, with over 103.2
million telephone subscriptions by 2005-end.

ECOLOGICAL FACTOR
In present scenario, telecommunication services are widely used all over the world.
People extensively use telephone services, internet services and many more. Initially, there were
wired phones which are not hazardous to our health and also to the environment. Now, more than
80 million people use pocket-sized cellular phones as a principal form of communication and
many researches proved that these smaller phones, with their smaller antenna, increase exposure
to microwaves and pose a potential health threat to the frequent user.
Wireless Technology Research (WTR), formed by the Cellular Telecommunications Industry
Association (CTIA) to research the effects of cellular phones, has indicated several health
problems traceable to radiation exposure due to phone use like many cases of people suffering
from brain tumour, memory loss, and genetic damage in human blood. A recent study indicated
that the number of immune cancer cells doubled in mice exposed to microwaves.

Cognitive effects:
A 2009 study examined the effects of exposure to radiation emitted by standard GSM
cell phones on the cognitive functions of humans. The study confirmed the existence of an effect
of exposure on response times to a spatial working memory task, as well as the fact that exposure
duration may play a role in producing detectable effects on performance

Health hazards of base stations:

Another area of concern is the radiation emitted by the fixed infrastructure used in mobile
telephony, such as base stations and their antennas, which provide the link to and from mobile
phones. This is because, in contrast to mobile handsets, it is emitted continuously and is more
powerful at close quarters. Base station emissions must comply with safety guidelines. Several
surveys have found increases of symptoms depending upon proximity to electromagnetic sources
such as mobile phone base stations.