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Telecom Industry and Communication Technology

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Indian Institute of Management Rohtak

        

 

 

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Telecom Industry and Communication Technology
Part - A

 

 

Submitted to:                                                                 Submitted by: 
Prof Sujit Kumar                                                                Group 10


                                                                                                                     Aleeva Goyari

                                                                                Ankush Verma

                                                                                Hrangbung Anal

Jeevan Rathod

                                                                                Shankul Mishra

                                                                                Sagar Rathee

Introduction

The rapidly growing telecommunication sector in India has emerged as the world’s second largest telecommunications market. With a subscriber base of 1.20 billion, the telecom industry has substantially become a strong contributor to India’s overall GDP and is expected to grow further.

The Indian Telecom industry has undergone significant changes over the past three decades, owing to the liberal and reformist policies of the Government of India along with the strong consumer demand in the rapid growth in the telecom sector. The deregulation of Foreign Direct Investment (FDI) norms as well as technology played an important role in phenomenal growth of the sector in the country which reflects the success of the Government initiatives.

History

Started in 1851, Indian telecom industry marked its beginning in Calcutta when the Government laid the first operational lines. In 1881 telephones services were introduced which was then merged with the postal system in 1883. Post-independence, all foreign telecommunications companies were nationalized to form the Post, Telephone and Telegraph (PTT), a monopoly run by the Government of India, under Ministry of Communications. It was then decided to consider Indian Telecom Sector to be consider as a strategic service and bring it under the roof of the state’s control. The first wind of telecom sector began to flow in 1980 when the private sector was allowed in manufacturing telecom equipment’s.

The year 1985 saw the establishment of Department of Telecommunications (DoT) which was the solo domestic and long-distance service. Videsh Sanchar Nigam Limited (VSNL) and Bharat Sanchar Nagar Limited (BSNL) were the two wholly owned Government companies. The first reform came about in 1994 when the sector began a transition from a monopoly to a competitive structure. During this period, National telecom Policy (NTP) was formulated which was a first attempt to transition to a competitive market-based structure. In 1997 Telecom Regulatory Authority of India (TRAI) was created to act as a regulator to facilitate the growth of the telecom sector.

Evolution of Telecom Industry

1851

First operational landlines laid between Calcutta and Diamond Harbour

1881

Introduction of telephone service in India

1923

Formation of Indian Radio Telegraph Company

1985

DOT was setup to provide domestic and long-distance telephone services

1986

Establishment of MTNL and VSNL

1992

Private players allowed in VAS

1994

Government announced National Telecom Policy

1995

Cellular service was commercially launched in India

1997

Creation of Telecom Regulatory Authority

1999

New Telecom Policy was launched (NTP 1999) which led to migration from high cost fixed license fee to low cost revenue sharing regime

2000

Amendments made to TRAI Act

2002

Subscriber linked spectrum allotment procedure was introduced

2003

Introduction of Internet and GPRS

2004

Broadband policy 2004 was formulated

2005

Attempt to boost rural telephony

FDI limit changed from 49 to 74 percent

2006

Number portability proposed

2007

Decision on 3G services

2008

Discussions on 3G spectrum bid process

2009

Mobile subscribers in India crossed 500 million mark

2010

Completed the auction of 3G and BWA spectrum

Table 1. Source: bsnl.co.in

Market Overview

  • The telecom sector continues to be one of the India’s biggest success industry and also witnessed unparalleled growth built on wireless revolution by global standards.
  • Gross Revenue of the Indian telecom industry is 40265.12 crores during 2010 and are expected to grow with a CAGR of 10.88% over next decade.
  • In 2010 the EBITDA margin is 13.95% and OPEX ratio is 86.05%
  • The total telecom subscribers in India is 65.39 crores in 2010. Below is market share and subscribers base of service providers (all India) in 2010.

S.No

Service Providers

Subscribers

Market Share in %

1

Bharati Airtel

12,76,19,314

21.84

2

RCom

10,24,22,145

17.53

3

Vodafone

10,08,58,358

17.26

4

BSNL

6,94,50,012

11.89

5

Tata

6,59,42,255

11.29

6

Idea

6,38,24,688

10.92

7

Aircel

3,68,61,174

6.31

8

Others

1,73,45,456

2.97

...

...

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