INDUSTRY PROFILE

The Indian Telecommunications industry is the world's fastest growing

telecommunications industry, with 962.82 Million telephone (landlines and mobile)
subscribers and 929.37 Million mobile phone connections as of May 2014. It is also the
second largest telecommunication network in the world in terms of number of wireless
connections after China. The Indian Mobile subscriber base has increased in size by a factor
of more than one hundred since 2001 when the number of subscribers in the country was
approximately 5 million to 962.82 million as on 30th June, 2014.
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 (Hutchison-Essar, Bharti Tele-Ventures,
Escotel, Idea Cellular, BPL Mobile, and Spice Communication
Telecommunications Regulatory Environment in India:
Telecommunications Regulatory Environment (TRE) index, which summarizes
stakeholders perception on certain TRE dimensions, provides insight into how conducive the
environment is for further development and progress. The most recent survey was conducted
in July 2008 in eight Asian countries, including Bangladesh, India, Indonesia, Sri Lanka,
Maldives, Pakistan, Thailand, and the Philippines. The tool measured seven dimensions: i)
market entry; ii) access to scarce resources; iii) interconnection; iv) tariff regulation; v) anticompetitive practices; and vi) universal services; vii) quality of service, for the fixed, mobile
and broadband sectors.
Modern growth:
A large population, low telephony penetration levels, and a rise in consumers' income
and spending owing to strong economic growth have helped make India the fastest-growing
telecom market in the world. The first operator is the state-owned incumbent BSNL. BSNL was
created by corporatization of the erstwhile Indian Telecommunication Service, a government

unit responsible for provision of telephony services. Subsequently, after the telecommunication
policies were revised to allow private operators, companies such as Vodafone, Bharti Airtel, Tata
Indicom, Idea Cellular, Aircel and Loop Mobile have entered the space. See mobile operators in
India. In 2008-09, rural India outpaced urban India in mobile growth rate. Bharti Airtel now is
the largest telecom company in India.
History:
Telecom in the real sense means transfer of information between two distant points in
space. The popular meaning of telecom always involves electrical signals and nowadays
people exclude postal or any other raw telecommunication methods from its meaning.
Therefore, the history of Indian telecom can be started with the introduction of telegraph.
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. In 1881, the Government later reversed its earlier decision and a
license was granted to the Oriental Telephone Company Limited of England for opening
telephone exchanges at Calcutta, Bombay, Madras and Ahmadabad and the first formal
telephone service was established in the country. 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 Exchanges in Calcutta, Bombay and Madras.
The exchange in Calcutta named "Central Exchange" was opened at third floor of the
building at 7, Council House Street.
Emergence as a major player:
In 1975, the Department of Telecom (DoT) was separated from Indian Post &
Telecommunication Accounts and Finance Service. 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 of Liberalization-PrivatizationGlobalization 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 1 October 2000 and named it as Bharat Sanchar Nigam Limited (BSNL). Many
private operators, such as Reliance Communications, Tata Indicom, Vodafone, Loop Mobile,
Airtel, Idea etc., successfully entered the high potential Indian telecom market.
Revenue and growth:
The total revenue in the telecom service sector was 86,720 crore (US$18.8 billion) in
2005-06 as against 71,674 crore (US$15.6 billion) in 2004-2005, registering a growth of
21%. The total investment in the telecom services sector reached 200,660 crore (US$43.5
billion) in 2005-06, up from 178,831 crore (US$38.8 billion) in the previous fiscal.
Telecommunication is the lifeline of the rapidly growing Information Technology
industry. Internet subscriber base has risen to 100 million in 2010. Out of this 10.52 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 US$500 million in 2006 to a whopping US$10 billion by 2009.
Next generation networks:
In the Next Generation Networks, multiple access networks can connect
customers to a core network based on IP technology. These access networks include fiber
optics or coaxial cable networks connected to fixed locations or customers connected through
Wi-Fi as well as to 3G networks connected to mobile users. As a result, in the future, it would
be impossible to identify whether the next generation network is a fixed or mobile network
and the wireless access broadband would be used both for fixed and mobile services. It would
then be futile to differentiate between fixed and mobile networks both fixed and mobile
users will access services through a single core network.

Indian telecom networks are not so intensive as developed countrys telecom

networks and India's teledensity is low only in rural areas. 670,000 route kilometers (419,000
miles) of optical fibres has been laid in India by the major operators, even in remote areas and
the process continues. BSNL alone has laid optical fibre to 30,000 Telephone Exchanges out
of their 36 Exchanges. Keeping in mind the viability of providing services in rural areas, an
attractive solution appears to be one which offers multiple service facility at low costs. A
rural network based on the extensive optical fibre network, using Internet Protocol and
offering a variety of services and the availability of open platforms for service development,
viz. the Next Generation Network, appears to be an attractive proposition. Fibre network can
be easily converted to Next Generation network and then used for delivering multiple
services at cheap cost.
Mobile Number Portability (MNP):
TRAI announced the rules and regulations to be followed for the Mobile
Number Portability in their draft release on 23 September 2009. Mobile Number Portability
(MNP) allows users to retain their numbers, while shifting to a different service provider
provided they follow the guidelines set by TRAI. Once a customer changes his/her service
provider & retaining the same mobile number they are expected to hold Thiele number with a
given provider for at least 90 days, before they decide to move to another service provider.
This restriction is set in place to keep a check on exploitation of MNP services provided by
the service providers.
As per news reports, Government of India decided to implement MNP from
December 31, 2009 in Metros & category A service areas and by March 20, 2010 in rest of
the country.
It has been postponed to March 31, 2010 in Metros & category 'A' service areas.
However, time and time again, lobbying by the state-run firms, BSNL and MTNL has
resulted in innumerable delays in the implementation of Mobile Number portability. The
latest reports suggest BSNL and MTNL are finally ready to implement the Mobile Number
Portability by October 31, 2010.
A press release by the Department of Telecommunications on 30 June 2010 said
"Keeping the complexity and enormity of the testing involved before MNP is implemented

and keeping in view the present status of implementation by various operators, it has now
been decided to extend the time line for implementation of MNP to 31st October 2010."
The latest official report is that Mobile Number Portability will be phased in
slowly, starting with Haryana which will have MNP on or soon after November 1, 2010.
A news report on 25 November 2010 said Mobile Number Portability (MNP)
was finally launched in Haryana. The MNP service inaugurate by the Union Minister of
Communications & IT Mr. Kapil Sibal by making the inaugural call to Shri Bhupindrer Singh
Hooda, the Chief Minister of Haryana from a ported mobile number in function held at
Rohtak city.
International:

Nine satellite earth stations - 8 Intelsat (Indian Ocean) and 1 Inmarsat (Indian Ocean

region).
Nine gateway exchanges operating from Mumbai, New Delhi, Kolkata, Chennai,
Jalandhar, Kanpur, Gandhinagar, Hyderabad and Ernakulam

Submarine cables:

LOCOM linking Chennai to Penang, Malaysia.

India-UAE cable linking Mumbai to Al Fujayrah, UAE.
SEA-ME-WE 2 (South East Asia-Middle East-Western Europe 2)
SEA-ME-WE 3 (South East Asia-Middle East-Western Europe 3) - Landing sites at

Cochin and Mumbai. Capacity of 960 Gbit/s.

SEA-ME-WE 4 (South East Asia-Middle East-Western Europe 4) - Landing sites at

Mumbai and Chennai. Capacity of 1.28 Tbit/s.

TIISCS (Tata Indicom India-Singapore Cable System), also known as TIC (Tata

Indicom Cable), Chennai to Singapore. Capacity of 5.12 Tbit/s.

i2i - Chennai to Singapore. Capacity of 8.4 Tbit/s.
SEACOM from Mumbai to the Mediterranean, via South Africa. It currently joins with
SEA-ME-WE 4 off the west coast of Spain to carry traffic onward to London (2009).

Capacity of 1.28 Tbit/s.

I-ME-WE (India-Middle East-Western Europe) with two landing sites at Mumbai

(2009). Capacity of 3.84 Tbit/s.

EIG (Europe-India Gateway), landing at Mumbai (due Q2 2010).
MENA (Middle East North Africa).

TGN-Eurasia (Announced) Landing at Mumbai (due 2010?), Capacity of 1.28 Tbit/s

TGN-Gulf (Announced) Landing at Mumbai (due 2011?), Capacity Unknown.

Telephone statistics:

Telephone subscribers (wireless and landline): 995.9 million (May 2012)

Land lines: 31.53 million (May 2012)

Cell phones: 929.37 million (May 2012)

Monthly cell phone addition: 8.35 million (May 2012)

Teledensity: 79.28% (May 2012)

Annual cell phone addition: 227.27 million (March 2010 - 2011)

Projected teledensity: 1.159 billion, 97% of population by 2013.