Post on 18-Nov-2014
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Telecommunications Reforms in India Telecommunications Reforms in India
Mushtaq Khan 03 Himanshu Ahire 13 Mushtaq Khan 03 Himanshu Ahire 13
Presentation Plan
1
5
Introduction
Growth of the Industry (Analysis)
3 Major Players in Telecom Sector
4
History2
Major reforms
6 SWOT analysis
7 Problems and prospects
Presentation Plan
1
5
Introduction
Growth of the Industry (Analysis)
3 Major Players in Telecom Sector
4
History2
Major reforms
6 SWOT analysis
7 Problems and prospects
The total wireless subscriber base {GSM, CDMA and WLL (F)} stood at 391.76 million at the end of financial year.
The number of wireline subscribers on 31st March 2009 was 37.96 million. On an average, more than 10 million subscribers were added every month
during the financial year. The overall teledensity at the end of March 2009 was 36.98% as compared
to 26.22% ending March 2008. The rural teledensity at the end of March 2009 was 15.20% as compared to
9.20% ending March 2008
There were 13.54 million internet subscribers on 31st March 2009 as compared to 11.09 million on 31st March 2008.
The number of broad-band connections on 31st March 2009 was 6.22 million compared to 3.87 million for the same period during previous year.
*Source : http://www.trai.gov.in/ Annual Report
Introduction to Indian Telecom Industry – Recent facts & figures
Presentation Plan
1
5
Introduction
Growth of the Industry (Analysis)
3 Major Players in Telecom Sector
4
History2
Major reforms
6 SWOT analysis
7 Problems and prospects
• 1851 First operational land lines were laid by the government near Calcutta (seat of British power)
• 1881 Telephone service introduced in India • 1883 Merger with the postal system • 1923 Formation of Indian Radio Telegraph Company (IRT) • 1932 Merger of ETC and IRT into the Indian Radio and
Cable Communication Company (IRCC) • 1947 Nationalization of all foreign telecommunication
companies to form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of Communications
History of Indian Telecom Industry
• 1985 Department of Telecommunications (DOT) established, an exclusive provider of domestic and long-distance service that would be its own regulator (separate from the postal system)
• 1986 Conversion of DOT into two wholly government-owned companies: the Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas.
• 1997 Telecom Regulatory Authority of India created.
• 1999 Cellular Services are launched in India. New National Telecom Policy is adopted.
• 2000 DoT becomes a corporation, BSNL
History of Indian Telecom Industry
Presentation Plan
1
5
Introduction
Growth of the Industry (Analysis)
3 Major Players in Telecom Sector
4
History2
Major reforms
6 SWOT analysis
7 Problems and prospects
Basic Services Operators
BSNL
MTNL
Major Players in different segments of Indian telecom industry
Reliance
TTSL
GSM Services Operators
Airtel
Vodafone
Idea
Reliance
TTSL
BSNL
CDMA Services Operators
Reliance
Internet Services Operators
BSNL
MTNL
Reliance
TTSL
BSNL
Airtel
TTSL – Tata Teleservices Ltd.
MOBILE SERVICES
BSNL – Bharat Sanchar Nigam Ltd.
MTNL – Mahanagar Telecom Nigam Ltd.
Subscribers (Rural & Urban) & Market share (GSM & CDMA) - 2009
Subscribers (Rural & Urban) & Market share (GSM & CDMA)
Presentation Plan
1
5
Introduction
Growth of the Industry (Analysis)
3 Major Players in Telecom Sector
4
History2
Major reforms
6 SWOT analysis
7 Problems and prospects
Growth of Subscriber base from 1999 to 2009
Growth of Indian Telecom Sector
Wirelline Subscriber in Million
Growth of Indian Telecom Sector
Wireless Subscriber in Million
Growth of Indian Telecom Sector
Internet Subscriber in Million
Growth of Indian Telecom Sector
Broadband Subscriber in Million
Growth of Indian Telecom Sector
Growth of Teledensity
Presentation Plan
1
5
Introduction
Growth of the Industry (Analysis)
3 Major Players in Telecom Sector
4
History2
Major reforms
6 SWOT analysis
7 Problems and prospects
Indian Telecom Industry FrameworkIndian Telecom Industry Framework
Indian Government Bodies Independent Bodies
Wireless Planning and Coordination (WPC)
Department of Telecommunications
Telecom Commission
Group on Telecom and IT (GoT-IT)
Telecom Regulatory Authority of India (TRAI)
Telecom Disputes Settlement and Appellate Tribunal (TDSAT)
Handles spectrum allocation and management
DoT – Licensee and frequency management for telecom
Exclusive policy making body of DoT
Handles ad hoc issues of the telecom industry
Independent regulatory body
Telecom disputes settlement body
Regulatory Framework provides level playing field for all operators
They formulate various policies and pass laws to regulate the telecom industry in India.
They undertake various research activities and monitor the quality of service provided in the Indian telecom industry. They also provide various recommendations to improve the status of telecom operations in India.
The Department of telecommunications (Government of India) is the main
governing body for the industry.
Telephone Regulatory Authority of India (TRAI) assists the Government of
India (GoI) to take timely decisions and introduce new technologies in the
country.
FDI in telecom recently revised to 74%.
Government gets 15% of revenues from Unified Licensing
Regulator
Licensor
Judiciary
Telecom Regulatory
Authority of India
Telecom Dispute Settlement
Appellate Tribunal
Dept of Telecom Unified License Operators
Fixed Line Operators
GSM
900 &
1800
Wireless Operators
National Long Distance Operators
International Long Distance Operators
CDMA
1800Mhz
Ministry of Communication & Information Technology
INDIA
Go-ahead to the CDMA technology
Private players were allowed in Value Added Services
National Telecom Policy (NTP) was formulated
1992
1994
1997
Independent regulator, TRAI, was established
NTP-99 led to migration from high-cost fixed license fee to low-cost revenue sharing regime
1999
2000
2002
BSNL was established by DoT
ILD services was opened to competition
Internet telephony initiated
Reduction of licence fees
2003
Calling Party Pays (CPP) was implemented
Unified Access Licensing (UASL) regime was introduced
Reference Interconnect order was issued
2004
Intra-circle merger guidelines were established
Broadband policy 2004 was formulated—targeting 20 million subscribers by 2010
2005
FDI limit was increased from 49 to 74 percent
Attempted to boost Rural telephony
2006
Number portability was proposed (pending)
Decision on 3G services (awaited)
2007
Department of Telecommunication (DoT) is the main body formulating laws and various regulations for the Indian telecom industry.
Various important regulations and laws have been passed in the Indian telecom industry post-liberalisation era
ILD – International Long Distance
3G Spectrum Was Auctioned. In April Airtel launched 3G Service and MTNL in December 11
2008
Presentation Plan
1
5
Introduction
Growth of the Industry (Analysis)
3 Major Players in Telecom Sector
4
History2
Major reforms
6 SWOT analysis
7 Problems and prospects
Strengths• Huge wireless subscriber potential
• Fastest growing mobile market in the world
• Consumers are ready to pay for cutting edge services
• Government proposes to hike FDI limit in Telecom to 74%
• Unified license regime
Market SWOT AnalysisWeaknesses
• Lowest call tariffs in the world• Market strongly regulated by Govrenment body –
Governing both ISP and Telecom sectors• Too many authorities ruling the sector• Huge potential for low end and cheap handsets• Wide scale Consumer churn in Telecom and ISP• Wide spread VAS deployment is restricted due to
language and literacy problems• Primarily a voice based market
Threats• Low cost service providers – no possibility of
breaking even in short term• Weak IPR protection• Software and digital content Piracy• Political instability• Regulatory interference
Opportunities• To offer value added services on GSM, CDMA and IP• Language independent services• Mobile Marketing concepts• Content influenced by local culture and Global
success stories• M-Commerce• Unified messaging platforms• Foreign investment in form of equity or technology
Presentation Plan
1
5
Introduction
Growth of the Industry (Analysis)
3 Major Players in Telecom Sector
4
History2
Major reforms
6 SWOT analysis
7 Problems and prospects
Fifth largest telecom network in the world; second largest among the
emerging economies after ChinaOn an average, about 6–7 million new users added per month,
making India the world’s fastest growing wireless services marketLiberal Foreign Investment Regime–FDI limit increased from 49
percent to 74 percent; the rural telecom equipment market is also
open to large investmentsAmong the countries offering the highest rates of return on investmentThe large untapped potential in India’s rural markets–1.9 percent
teledensity in rural markets as compared to the national level of 18
percentThe government promoting telecom manufacturing by providing tax
sops and establishing telecom specific Special Economic Zones
Prospects of Indian Telecom sector
Vodafone purchased stake in Hutch from Hong Kong's Hutchison Telecom International for USD 11.08 billion.
Telekom Malaysia acquired a 49 percent stake in Spice Communications for USD 179 million.
Maxis Communications acquired a 74 percent stake in Aircel for USD 1.08 billion.
Ericsson to design, plan, deploy and manage Bharti Airtel network and facilitate their expansion in the rural areas, under a USD 2 billion contract.
Recent Deals in Telecom Sector
FDI and other M&A activities increasing in number
Reliance Communications Limited has sold a five percent equity share capital of its subsidiary Reliance Telecom Infrastructure Limited to international investors across the US, Europe and Asia. The deal was worth USD 337.5 million.
Major trends in the telecom sector is increasing M&A activity, de-regulation of telecom policies and growing interest of international investors.
Fight for the Sweet pieFight for the Sweet pie
Vodafone purchased stake in Hutch from Hong Kong's Hutchison Telecom International for USD 11.08 billion.
Telekom Malaysia acquired a 49 percent stake in Spice Communications for USD 179 million.
Maxis Communications acquired a 74 percent stake in Aircel for USD 1.08 billion.
Ericsson to design, plan, deploy and manage Bharti Airtel network and facilitate their expansion in the rural areas, under a USD 2 billion contract.
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700
2003–04 2004–05 2005–06 2006–07
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Recent Deals in Telecom Sector
FDI in Telecom Sector
The Indian telecom industry has always attracted foreign
investors. In fact, the cumulative FDI inflow, during the August
1991 to March 2007 period, in the telecommunication sector
amounted to USD 3,892 million. It is the third largest sector to
attract FDI in India in the post-liberalisation era.
FDI calculation takes into account radio paging, cellular mobile
and basic telephone services in the telecommunication sector.
FDI and other M&A activities increasing in number
Reliance Communications Limited has sold a five percent equity share capital of its subsidiary Reliance Telecom Infrastructure Limited to international investors across the US, Europe and Asia. The deal was worth USD 337.5 million.
The Indian telecom industry has a 74 percent FDI limit in the
telecom services segment.
The GoI has permitted 100 percent FDI in manufacturing of
telecom equipment in India.
Major trends in the telecom sector is increasing M&A activity, de-regulation of telecom policies and growing interest of international investors.
Problems of Indian Telecom sector
• Lowest call tariffs in the world• Market strongly regulated by Govrenment body – Governing both ISP and Telecom
sectors• Low cost service providers – no possibility of breaking even in short term• Political instability
• Wide scale Consumer churn in Telecom and ISP
• Wide spread VAS deployment is restricted due to language and literacy problems
• Primarily a voice based market
“Nigahen nigahon se milake to dekho. Naye logo se rishta bana kar to dekho
Khamoshi se kab hoti hai khwahishein poori dil ki baat bata kar to dekho
Jo hai dil mei use kar do bayaan khud ko ek baar jata kar to dekho
Dil ki baat bata kar to dekho”
Thank You for your patience&
Till Then…Happy Talking !