Overview of Telecom Industry

i)

Growth over Last Few Years

India is the second largest telecommunications market in the world with tremendous growth
trends in last few years. The telecom reforms and decisions taken by Government of Indian along
with the, support from private sector players etc. have been instrumental in the growth of Indian
telecom industry. Things have happened at a brisk pace in the year 2012-13 and it has been an
eventful past few years with activities centered on the National Telecom Policy 2012, Spectrum
Management, Spectrum Auction and Unified Licensing. The contribution from FDI in telecom
has been about US$ 14,163.01 million in the period April 2000 March 2014

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BroadBand Subsriber Base:According to the recent Avendus Report, India has more than 160 million active internet users,
of which 86 million access internet using their mobile devices. This also means that 46 per cent
of the country relies on accessing the internet through broadband connections either from their
home or office. India ranks 122 in the world for fixed broadband penetration with only 1.1 per

every 100 inhabitants having access to fixed broadband

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As per TRAI reports number of broadband subscribers increased from 58.00 Million at the end
of Feb 2014 to 60.87 Million by March 2014 with a growth rate of 4.95 % monthly.
ii)

Present and Future Trends

Although data and mobile based internet services is the future of wireless technology, rural
areas still lacks penetration of data services to the masses and voice is and will remain the
primary source of earnings for at least 5 years

[3]

Indian Telecom market is very fragmented with 7 major operators out of the 15 operational
operators in India have nationwide coverage and mergers and acquisitions of such smaller
players is inevitable in times to come which is subject to regulatory approvals

[3]

Mobile broadband penetration in India is still very low despite exponential growth in number
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of mobile users

Voice Call tariffs from have reduced to lowest possible extent in India and hence to sustain
the profitability and maintain revenue share growth, service providers are working on other
revenue sources like valued added services, cloud computing, managed services

[3]

Currently all the Network Service Providers have deployed Next Generation Network
technologies which can enable carrying high speed data for applications such as SMS, MMS,
Mobile Email, Instant Messaging, Ringtone, Games, Graphics, Mobile App storefronts,
Mobile Social Networking, Mobile Video, Mobile Music, Mobile Advertising

[4]

The National Telecom Policy 2012 emphasizes future requirements like single licensing
across services and service areas, free roaming One License across services and service

areas, providing high speed and high quality broadband access to all village panchayats
through a combination of technologies by the year 2014 and progressively to all villages and
habitations by 2020

Department of Telecommunication (DoT) is promoting a vision of green telecom by which

[5]

it plans to convert 50 per cent of urban and 30 per cent of rural towers to renewable energy

Convergence of different sectors responsible for providing unified services to the customer

Long Term Evolution (LTE) based high speed access networks forming the core of the 4G
network would be the future technology in India. This would revolutionize the mobile user
experience providing superior and uninterrupted high speed for applications like video chats,
conferencing, live music or video streaming or online data sharing. Voice over LTE
(VoLTE) is a key to LTE adoption in near future.

iii)

Major Events of past few years:Mobile Number Portability (MNP) through which subscribers can switch their service
providers retaining the existing number. It was launched by government on 2008 and
implemented in Jan.2011. As per the data reported by the service providers, by the end of
July 2013 about 97.82 million subscribers have submitted their requests to different service
providers for porting their mobile number

Auction of Spectrums for 3G Services ended in May.2010 from which the Indian government
has managed to raise Rs.67, 718.95 Crores. Service was launched in India in Nov.2010 by
TATA Teleservices limited and then followed by Bharti Airtel and Vodafone

[6]

Broadband Wireless Access (BWA) Auction in June 2011 fetched a total revenue of Rs.38,
543.31 crore. Infotel Broadband Services has won bid for all the 22 circles while Aircel won
8, Bharti Airtel, Vodafone, Idea, Reliance Communications opted out of the bid

[7]

Launch of LTE based 4G data services by Airtel in Kolkata in April.2010 which provided 58 times speed of the existing 3G network

[8]

FDI in telecom (equipment manufacturing) increased from 74% to 100% in July 2013.

In 2014, DoT auctioned spectrums for 2G for the frequency ranging 900 MHz and 1800 MHz
which fetched US$10 billion to the government. This was done to enable the operators to

renew their license which were cancelled by the Supreme Court following the 2G scam
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case

iv)

Importance to the Economy:-

A 10% increase in mobile and broadband penetration increases the per capita GDP by 0.81%
and 1.38% respectively in the developing countries World Bank
According to the recently released report by GSMA, made in collaboration with BCG, Indian
mobile economy is growing rapidly and will contribute approximately USD 400 Billion to the
countrys GDP and is going generate 4.1 Million employment opportunities. Currently the
mobile economy in India is worth USD 130 Mn (INR 1.27L), this means that by 2020 it is going
to take a leap of 408%. The figure below shows the rise of the contribution of mobile economy
in India to the countrys GDP

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a) Contribution of Telecom to Education

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b) Contribution of telecom to healthcare

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References:1) http://www.ibef.org/industry/telecommunications.aspx

[1]

2) http://www.business-standard.com/article/management/india-s-broadband-nirvana114040600673_1.html

[2]

3) http://wirelesstelecom.wordpress.com/2011/11/04/current-trends-and-developments-inindia%E2%80%99s-wireless-telecom-industry/

[3]

4) http://ww2.frost.com/research/industry/information-communicationstechnologies/mobilewireless-communications/

[4]

5) http://www.indiatelecom.org/opportunities.php

[5]

6) http://www.medianama.com/2010/05/223-3g-auction-india-ends-provisional-winners

[6]

7) http://telecomtalk.info/india-s-bwa-auction-ends-infotel-is-pan-india-winner/30570/
8)

http://www.nextbigwhat.com/airtel-4g-tariff-details-297/

[7]

[8]

9) http://telecomtalk.info/auction2014-list-of-winners-in-1800mhz-and-900mhz/114075/

[9]

10) http://www.iamwire.com/2013/11/mobile-sector-india-contribute-usd-400-bn-gdp-2020generate-4-1-mn-jobs-gsma

[10]

11) http://www.coai.com/COAI-Annual-Report/2014/#/36/zoomed

[11]