Indian Telecom Presentation

8/14/2019 Indian Telecom Presentation

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INDIAN TELECOM INDUSTRYINDIAN TELECOM INDUSTRYA BRIEF OVERVIEWA BRIEF OVERVIEW

The telecom network in India is the fifth largest network inThe telecom network in India is the fifth largest network inthe world.the world.

Worlds fastest growing telecom marketWorlds fastest growing telecom market

Contributes estimated 1% to Indias GDP.Contributes estimated 1% to Indias GDP.

Services in ~ 5000 cities & towns & ~1 lakh villagesServices in ~ 5000 cities & towns & ~1 lakh villages

Major Players

Major Players -State owned companies (BSNL and MTNL)-State owned companies (BSNL and MTNL)

-Private Indian owned companies (Reliance Infocomm, Tata-Private Indian owned companies (Reliance Infocomm, TataTeleservices,)Teleservices,)

-Foreign invested companies (Vodafone, Bharti Airtel-Foreign invested companies (Vodafone, Bharti Airtel

, Idea Cellular, BPL Mobile), Idea Cellular, BPL Mobile)


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Current Industry StructureCurrent Industry Structure

FDI in telecom recently revised to 74%.

Government gets 15% of revenues from Unified Licensing

Ministry of Communication & Information Technology

Regulator

Licensor

Judiciary

TelecomRegulatory

Authority of India

Telecom DisputeSettlementAppellateTribunal

Dept of Telecom Unified LicenseOperators

Fixed Line Operators

GSM

900

Wireless Operators

National Long DistanceOperators

International Long

Distance Operators

CDMA

1800M

hz


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Market StructureMarket Structure Divided into 22Divided into 22

circlescircles 4 metros4 metros

19 circles19 circleso Further divided intoFurther divided into

A, B and C categoryA, B and C categorybased on economicbased on economicparameters andparameters andrevenue potentialrevenue potential

Each circle has aEach circle has a

licenseslicenses Four operators perFour operators per

circle are allowedcircle are allowed

Licenses areLicenses are

saleablesaleable

North Eastern

States

METRO Circles

Gujarat

Rajasthan

MaharashtraOrissa

Andhra

Pradesh

Karnataka

TamilNadu

Kerala

Madhya

Pradesh

Uttar Pradesh E

Bihar

West

Bengal

Punjab

Himachal

Pradesh

Haryana

Jammu &

Kashmir

Uttar

Pradesh

W

CHENNAI

MUMBAI

DELHI

KOLKATA

C Circles

B Circles

A Circles

Source :COAI


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MOBILE MAJOR CONTRIBUTOR TOMOBILE MAJOR CONTRIBUTOR TO

TELEDENSITYTELEDENSITY


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TRAI 2007 TELECOM REPORTTRAI 2007 TELECOM REPORT

TRAI released the 2007 telecom report and hereTRAI released the 2007 telecom report and hereare a few key findings:are a few key findings:

The total number of telephone subscribers hasThe total number of telephone subscribers hasreached 241.02 millionreached 241.02 million

The overall teledensity has increased to 21.20%The overall teledensity has increased to 21.20%in August 2007in August 2007

The total wireless subscribers (GSM, CDMA &The total wireless subscribers (GSM, CDMA &WLL(F)) base reaches 201.29 millionWLL(F)) base reaches 201.29 million

The wireline segment subscriber base stood atThe wireline segment subscriber base stood at

39.73 million (decrease of 0.16 million at the end39.73 million (decrease of 0.16 million at the endof August 2007)of August 2007) Total Broadband connections in the country haveTotal Broadband connections in the country have

reached 2.56 million by the end of August 2007.reached 2.56 million by the end of August 2007.


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Evolution of the industry-Important MilestonesEvolution of the industry-Important Milestones

History of Indian TelecommunicationsHistory of Indian TelecommunicationsYearYear

1851 First operational land lines were laid by the government near Calcutta (seat1851 First operational land lines were laid by the government near Calcutta (seat

of British power)of British power) 1881 Telephone service introduced in India1881 Telephone service introduced in India 1883 Merger with the postal system1883 Merger with the postal system 1923 Formation of Indian Radio Telegraph Company (IRT)1923 Formation of Indian Radio Telegraph Company (IRT) 1932 Merger of ETC and IRT into the Indian Radio and Cable Communication1932 Merger of ETC and IRT into the Indian Radio and Cable Communication

Company (IRCC)Company (IRCC) 1947 Nationalization of all foreign telecommunication companies to form the1947 Nationalization of all foreign telecommunication companies to form thePosts, Telephone and Telegraph (PTT), a monopoly run by the government'sPosts, Telephone and Telegraph (PTT), a monopoly run by the government'sMinistry of CommunicationsMinistry of Communications

1985 Department of Telecommunications (DOT) established, an exclusive1985 Department of Telecommunications (DOT) established, an exclusiveprovider of domestic and long-distance service that would be its own regulatorprovider of domestic and long-distance service that would be its own regulator(separate from the postal system)(separate from the postal system)

1986 Conversion of DOT into two wholly government-owned companies: the1986 Conversion of DOT into two wholly government-owned companies: theVidesh Sanchar Nigam Limited (VSNL) for international telecommunications 3Videsh Sanchar Nigam Limited (VSNL) for international telecommunications 3and Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitanand Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitanareas.areas.

1997 Telecom Regulatory Authority of India created.1997 Telecom Regulatory Authority of India created. 1999 Cellular Services are launched in India. New National Telecom Policy is1999 Cellular Services are launched in India. New National Telecom Policy is

adopted.adopted. 2000 DoT becomes a corporation, BSNL2000 DoT becomes a corporation, BSNL


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GSM TECHNOLOGYGSM TECHNOLOGY

GSMGSM ((Global System for MobileGlobal System for Mobilecommunications)communications) is the most popular standardis the most popular standard

for mobile phones in the world. GSM is consideredfor mobile phones in the world. GSM is considered

aa second generationsecond generation (2G) mobile phone system.(2G) mobile phone system.

GSM also pioneered Short message serviceGSM also pioneered Short message service

(SMS). One of the key features of GSM is the(SMS). One of the key features of GSM is the

Subscriber Identity Module (SIM). The GSMSubscriber Identity Module (SIM). The GSM

standard has been an advantage to bothstandard has been an advantage to both

consumers (who benefit from the ability to roamconsumers (who benefit from the ability to roam

and switch carriers without switching phones) andand switch carriers without switching phones) andalso to network operators (who can choosealso to network operators (who can choose

equipment from any of the many vendorsequipment from any of the many vendors

implementing GSM. GSM was designed with aimplementing GSM. GSM was designed with a

moderate level of security.moderate level of security.


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CDMA TECHNOLOGYCDMA TECHNOLOGY

CDMA2000CDMA2000 is a hybrid 2.5G / 3G technology ofis a hybrid 2.5G / 3G technology ofmobile telecommunications standards that usemobile telecommunications standards that useCDMA, a multiple access scheme for digital radio,CDMA, a multiple access scheme for digital radio,to send voice, data, and signalling data (such asto send voice, data, and signalling data (such asa dialed telephone number) between mobilea dialed telephone number) between mobile

phones and cell sites. CDMA permits manyphones and cell sites. CDMA permits manysimultaneous transmitters on the same frequencysimultaneous transmitters on the same frequencychannel. Since more phones can be served bychannel. Since more phones can be served byfewer cell sites, CDMA-based standards have afewer cell sites, CDMA-based standards have asignificant economic advantage over TDMA basedsignificant economic advantage over TDMA based

standards.standards.


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TECHNOLOGY GENERATIONSTECHNOLOGY GENERATIONS 2G2G (or 2-G) is short for(or 2-G) is short forSecond-generationSecond-generation wireless telephone technology.wireless telephone technology.

Three primary benefits of 2G networks over their predecessors were that phoneThree primary benefits of 2G networks over their predecessors were that phoneconversations were digitally encrypted, 2G systems were significantly moreconversations were digitally encrypted, 2G systems were significantly moreefficient on the spectrum allowing for far greater mobile phone penetration levels;efficient on the spectrum allowing for far greater mobile phone penetration levels;and 2G introduced data services for mobile, starting with SMS text messages.and 2G introduced data services for mobile, starting with SMS text messages.

3G3G is theis the Third generationThird generation of mobile phone standards and technology. 3Gof mobile phone standards and technology. 3Gtechnologies enable network operators to offer users a wider range of moretechnologies enable network operators to offer users a wider range of more

advanced services while achieving greater network capacity through improvedadvanced services while achieving greater network capacity through improvedspectral efficiency. Services include wide-area wireless voice telephony, videospectral efficiency. Services include wide-area wireless voice telephony, videocalls, and broadband wireless data, all in a mobile environment. Additionalcalls, and broadband wireless data, all in a mobile environment. Additionalfeatures also include HSPA(High Speed Packet Access) data transmissionfeatures also include HSPA(High Speed Packet Access) data transmissioncapabilities. 3G networks offer a greater degree of security than 2Gcapabilities. 3G networks offer a greater degree of security than 2Gpredecessors.predecessors.

4G4G ororFourth-GenerationFourth-Generation, A 4G system will be able to provide a comprehensive, A 4G system will be able to provide a comprehensiveIP solution where voice, data and streamed multimedia can be given to users onIP solution where voice, data and streamed multimedia can be given to users onan "Anytime, Anywhere" basis, and at higher data rates than previousan "Anytime, Anywhere" basis, and at higher data rates than previousgenerations. 4G is being developed to accommodate the quality of service (QoS)generations. 4G is being developed to accommodate the quality of service (QoS)and rate requirements set by forthcoming applications like wireless broadbandand rate requirements set by forthcoming applications like wireless broadbandaccess, Multimedia Messaging Service (MMS), video chat, mobile TV, HDTVaccess, Multimedia Messaging Service (MMS), video chat, mobile TV, HDTVcontent, Digital Video Broadcasting (DVB), minimal service like voice and data,content, Digital Video Broadcasting (DVB), minimal service like voice and data,

and other streaming services".and other streaming services".


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3G ISSUES3G ISSUES

Expensive input fees for the 3G service licensesExpensive input fees for the 3G service licenses Numerous differences in the licensing termsNumerous differences in the licensing terms Large amount of debt currently sustained by many telecommunicationLarge amount of debt currently sustained by many telecommunication

companies, which makes it a challenge to build the necessary infrastructurecompanies, which makes it a challenge to build the necessary infrastructurefor 3Gfor 3G

Lack of member state support for financially troubled operatorsLack of member state support for financially troubled operators Expense of 3G phonesExpense of 3G phones

Lack of buy-in by 2G mobile users for the new 3G wireless servicesLack of buy-in by 2G mobile users for the new 3G wireless services Lack of coverage, because it is still a new serviceLack of coverage, because it is still a new service High prices of 3G mobile services in some countries, including InternetHigh prices of 3G mobile services in some countries, including Internet

access (see flat rate)access (see flat rate) Current lack of user need for 3G voice and data services in a hand-heldCurrent lack of user need for 3G voice and data services in a hand-held

devicedevice

High power usageHigh power usage BSNL along with Mahanagar Telephone Nigam Ltd (MTNL) was given aBSNL along with Mahanagar Telephone Nigam Ltd (MTNL) was given a

head-start by the department of Telecom to roll out 3G services in thehead-start by the department of Telecom to roll out 3G services in thecountry.country.

While the private telecom companies have to acquire 3G spectrum throughWhile the private telecom companies have to acquire 3G spectrum througha process of bidding, both the public sector units have already been allotteda process of bidding, both the public sector units have already been allotted

spectrum on a pro-rata basis.spectrum on a pro-rata basis.


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ISSUES IN SPECTRUM ALLOCATION

AND PRICING IN INDIA. Radio frequency spectrum is a limited natural resource.

9kHz and 3000 GHz and are being used for 40 differenttypes of services

GSM technology works in the frequency bands of 900 and

1800 MHz in India and CDMA technology works in the 800MHz band. larger number of subscribers requires, either a larger

amount of spectrum or an increase in the number of basestations.

Department of Telecommunications has evolved guidelinesfor the allotment of extra spectrum, based on subscriberbase and roll out. The subscriber-based criteria have beenformulated taking into account demographic characteristicsof different categories of service areas, average traffic persubscriber, number of base stations in a specified area etc.Spectrum is allotted subject to completion of coordinationand availability at a particular location.


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FUTURE GROWTH POTENTIAL

India is getting younger.India is getting younger. Amongst the fastest growing economies.Amongst the fastest growing economies. Era of mergers and acquisitions in Indian TelecomEra of mergers and acquisitions in Indian Telecom

Promoters have begun selling off stakes to longPromoters have begun selling off stakes to longtime players of telecom operations.time players of telecom operations. Unlimited usage with fixed monthly charge.Unlimited usage with fixed monthly charge. Unlimited plans both In basic and cellular.Unlimited plans both In basic and cellular. Revenue through VAS and Broadband.Revenue through VAS and Broadband.

Emergence of Indian MNCs in telecom sector.Emergence of Indian MNCs in telecom sector. Due to heavy competition, pressure is alsoDue to heavy competition, pressure is also

mounting on usage charges.mounting on usage charges.


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0.3 0.3 0.40.5

0.7 0.91.2

1.5 1.7

19.7

14.3

12.2

10.4

8.2

6.95.8

4.8

4

7.0

5.14.3

3.62.92.31.91.6

1.3

0

2

4

6

8

10

12

14

16

18

20

1996 1997 1998 1999 2000 2001 2002 2003 2004

Teledens

ity

Rural Urban Total

Teledensity LevelsTeledensity Levels

Urban Telephony surpasses targetsUrban Telephony surpasses targets

Rural left far behindRural left far behind


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102.1

1710

3.9 1.9 1 0.3 0.3

0

20

40

60

80

100

120

60 180 260 360 520 840 1300 2240

HH Income in $ per month

Number

ofHHinmillions

135 million rural

households

Rural IndiaRural India India has a 700India has a 700

million people livingmillion people livingin 638,000 villagesin 638,000 villages

Per-capita income ofPer-capita income of

$ 0.40 per day)$ 0.40 per day)

As per DoTAs per DoT

statistics 500,000statistics 500,000

villages havevillages have

telephone access.telephone access.

However,However,

teledensityteledensity

patterns revealpatterns reveal

the lowthe lowpenetration ofpenetration of

communicationcommunication

servicesservices

The question is :Is connectivityrelevant to therural populace of

India?


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REFERENCESREFERENCES

http://en.wikipedia.org/wiki/http://en.wikipedia.org/wiki/ http://www.pluggd.in/wp-content/uploads/2007/09/telecom-http://www.pluggd.in/wp-content/uploads/2007/09/telecom-

market-share.PNGmarket-share.PNG http://newshopper.sulekha.com/postnewslink.aspxhttp://newshopper.sulekha.com/postnewslink.aspx http://www.naukrihub.com/india/telecom/recent-http://www.naukrihub.com/india/telecom/recent-

developments/3g.htmldevelopments/3g.html

Whats 3G all about?Amit Tripathi/ DNA MONEY | Saturday, 02Whats 3G all about?Amit Tripathi/ DNA MONEY | Saturday, 02August , 2008, 09:12August , 2008, 09:12

DNA MONEY issue September 11th and 12th year 2008.DNA MONEY issue September 11th and 12th year 2008. Report on The Indian Telecom Industry By:Consulting Club,IIMReport on The Indian Telecom Industry By:Consulting Club,IIM

CalcuttaCalcutta Issues in spectrum allocation and pricing in india.: (Deepak AshishIssues in spectrum allocation and pricing in india.: (Deepak Ashish

Kaul, Jt. CCA.) IndiaKaul, Jt. CCA.) India A Telecom Destination: Bharat Bhatia, Regional Director, AsiaA Telecom Destination: Bharat Bhatia, Regional Director, AsiaGGA , MotorolaGGA , Motorola

Indian Mobile Industry: S D Saxena, Director (Finance), BharatIndian Mobile Industry: S D Saxena, Director (Finance), BharatSanchar Nigam LimitedSanchar Nigam Limited


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Indian Telecom Presentation

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