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INDUSTRY ANALYSIS

Indian telecommunication industry is the fastest growing telecommunication industry in the

World. It is the second largest market for the telecommunication industry only after China. It

has registered a CAGR of more than 50% in terms of subscribers and 15% in terms of gross

revenue over the past decade. It has a subscriber base of 897.02 million as on April 2013

with an overall teledensity of 73.16%. The subscriber base as on March 2013 is about 898.80

million with a teledensity of 73.32%, thereby showing a monthly growth of -0.11% and is

hoping to hit the 1 billion subscriptions by 2014.

As on April 30 2012, Bharti Airtel is the market leader of the telecommunication industry

with 19.94% of the market share followed by Reliance with market share of 16.58%,

Vodafone with 16.41%, Idea with 12.4%, BSNL with 10.51%, Tata with 8.77%, Aircel with

5.93% and the remaining with the smaller operators.

The average voice tariff is roughly around 35 paise/ minute which is the worlds lowest tariff.

Due to this the average revenue per user (ARPU) of Indian telecommunication industry is

only 16% whereas Japans ARPU is around 64%. The Rs. 1,48,792 Crore cellular mobile

industry is reeling under the pressures of a crippling dept of around Rs. 2,50,000 Crore and

the negative growth is demonstrating very little hope for early revival.

Recent events like 2G scam and cancellation of licenses of few subscribers by the SC have

led to uncertainty in the industry leading to lesser growth. The Department of Telecom (DoT)

and Telecom Regulatory Authority of India (TRAI) have made several policy changes and

recommendations in critical areas such as delinking of licence from spectrum, allocation of

spectrum through auctions and spectrum liberalisation.

The introduction Mobile Value Added Services, Mobile number portability, free roaming, the

overall communication tariff and the decrease in the price of cell-phones are the key drivers

of growth for the telecommunication industry. Mobile number portability requests has been

in from 41.88 million at the end of March 2012 to 45.89 million at the end of April 2012,

4.01 million requests in the month of April 2012.

The expansion of the 3G network and the introduction of the 4G spectrum and 3G roaming

are the key innovation factors which may bring back the growth rate in the

telecommunication industry.

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