indian Telecom Sector

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-1

PRESENTATION ON

TELECOM SECTOR

-Presented By Sanjeev Prasad

Pankaj Gupta


STATUS OF TELECOM SECTORSTATUS OF TELECOM SECTOR

Historically telecom network in india was owned and managed by govt as it is considered as a strategic service.


INDIA’S POSITION IN TELECOM SECTORINDIA’S POSITION IN TELECOM SECTOR

India is 4th largest market in asia after china, japan and south korea.

Indian telecom network is 8th largest in the world and 2nd largest among emerging ecomomies.

Contribution of telecom sector in terms of revenue is 2.1 % of GDP as compared to 2.8% in developed economies.


REFORMS IN TELECOM SECTORREFORMS IN TELECOM SECTOR

Reforms in telecom sector began in 1980 with telecom manufacturing being opened for private sector followed by national telecom policy(ntp) in 1994 and 1999.

In 1990 telecom revolution in many countries which resulted in better quality of service with lower tariff rates force Indian policy makers to open up telecom sector for private players


POLICY REFORM- 3 PHASESPOLICY REFORM- 3 PHASES

Phase-1 –

The decade of 1980's saw private sector being allowed in telecommunications equipment manufacturing.

Mahanagar telephone nigam limited (mtnl) and videsh sanchar nigam limited (vsnl) were formed.

A telecom commission was set up to give focus to telecommunications policy formation.



Phase-2 – in 1990s, telecommunications sector also benefited

from the general opening up of the economy. NTP 1994 was the first attempt to give a

comprehensive roadmap for the Indian telecommunications sector.

Availability of telephones on demand (targeted by 1997) Universal service covering all villages and one pco per

500 persons in urban areas at the earliest (targeted to be achieved by 1997)

Telecom services at affordable and reasonable prices



Phase- 3-

NTP 1999 brought in the third generations of reforms in the indian telecommunications sector.

FDI increase from 49% to 74%. Internet telephony in 2002. Launch of cdma technology. 3-6 operator in each circle. Intra circle merger guidelines. Broadband policy 2004.


CLASSIFICATION OF TELECOM SECTORCLASSIFICATION OF TELECOM SECTOR

1. Fixed line telephony Current market size of rs.30164 crore with

43 million lines. BSNL and MTNL account for 90% revenue

for basic services. Private sector avilable in 18 circles and

collectively account for 10% of revenue. Private sector offer high end services like

leased lines, isdn, videoconferencing as a result ARPU ( av. revenue per user is more for private players).



2. Mobile telephony

There are 25 private companies providing cellular services in 19 telecom circles and 4 metro cities, covering 1500 towns across the country.

Presently, there are five private service operators in each area, and an state operator.

Almost 80% of the cellular subscriber base belongs to the pre-paid segment.

The dot has allowed cellular companies to buy rivals within the same operating circle provided their combined market share did not exceed 67 per cent.

Previously, they were only allowed to buy companies outside their circle.



3. Internet- Internet has become very easily accessible

with cyber cafes. There is no restriction on the number of

internet companies and more than 185 companies are operational.

Internet telephony has been allowed officially from 1 april 2002.

The growing demand of corporates for applications such as electronic commerce, internet leased lines, ISDN, VPN etc is driving the growth of the internet services market.



4. Telecom equipments- Growth in the telecom equipment market resulted in

increasing demand for telecom services. Key players like bsnl, bharti, reliance, batata, bpl and

hutchison will drive equipment market growth. Transmission equipment, cable and terminal equipment

are expected to drive the market in the years to come. Switching systems will remain a big market, with a size of

around rs 50 billion.


MARKET SHARE OF PRIVATE AND PUBLIC MARKET SHARE OF PRIVATE AND PUBLIC PLAYERSPLAYERS

The public players and the private players share the fixed line and the mobile segments.

Currently the public players have more than 60% of the market share.

Bharti airtel has the largest customer base with 31% market share, followed by hutch (vodafone) and bsnl with each holding 22% market share.

The value added services provided by the mobile service operators contribute more than 10% of the total revenue.


KEY INDIAN COMPANIESKEY INDIAN COMPANIES

• BSNL - Incumbent service provider and World's 7th largest Telecommunications Company providing comprehensive range of telecom services in India

• Services include Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-VPN, VSAT, VoIP services, IN Services etc.

• MTNL - State owned operator covering the cities of Mumbai an Delhi

• Provides both fixed and mobile services

• Bharti Airtel - Integrated operator with presence in all segments

• Leads the mobile segment in the country

• Reliance Communications - Largest player in India in the CDMA segment

• Plans a GSM network

• Tata Teleservices - Integrated operator (with VSNL) with presence in all segments

• Provides CDMA services in 20 circles


TELECOM SERVICE PROVIDERS AND TELECOM SERVICE PROVIDERS AND EQUIPMENT MAJORSEQUIPMENT MAJORS

• Nortel offers a suite of products and solutions across two broad categories Carrier Networks (incorporating Wireless Networks, Wireline Networks and Optical Networks) and Enterprise Networks.

• In India since 1991. Has an R&D centre in Bangalore

• Promotes and supports a range of telecommunications products and services in India in association with licensed operators.

• Has invested in Bharti Airtel and also Network i2i is a 50:50 Joint Venture between Bharti and SingTel, connecting Chennai to Singapore

• Largest pure-play GSM service provider in India

• Has over 15 million subscribers

• Has a 10% stake in Bharti telecom, an integrated service provider

• Represents the largest foreign investment in the telecom services

sector in India


MAJOR PLAYERS IN TELECOM SECTORMAJOR PLAYERS IN TELECOM SECTOR

SERVICE PROVIDER NO OF CDMA SUBSCRIBER

NO OF GSM SUBSCRIBER

RELIANCE 2.7CR

TATA 1.07CR

AIRTEL 3.37 CR

MTNL 24.98 LAKH

BSNL 2.44 CR

VODAFONE 2.44 CR

IDEA 1.3 CR

SPICE 25.56 LAKH

BPL 10.62 LAKH

AIRCEL 48 LAKH


MARKET SHARE MAJOR PLAYERS IN TELECOM MARKET SHARE MAJOR PLAYERS IN TELECOM SECTORSECTOR


INVESTMENT AND GROWTHINVESTMENT AND GROWTH

In 2005-2006, the telecom industry witnessed a growth of 21% with a total revenue of rs. 86,720 crores, and the total investment rising to rs. 2,00,660 crores.

It is projected that the telecom industry will be enjoying over 150% growth in the next 4-6 years.

The growth also requires a huge investment by the players in the sector. Bharti airtel is planning to invest about $8 billion by the year 2010.


INVESTMENT AND GROWTHINVESTMENT AND GROWTH

Liberalization policy and some socio-economic factors are mainly responsible for the immense growth in the sales volumes.

The lifestyle of the people has changed. They need to be connected to the other people all the time.

With the lowering down of the tariffs the affordability of the mobile phones has increased.

The finance sector has also come up with loans for handsets on 0% interest. Mobile services providers are also expanding their coverage area by installing more and

more antennas and other equipments.


INDIA CHINA COMPARISIONINDIA CHINA COMPARISIONIndia China comparison

0

250

500

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Year

Mill

ion

Sub

scri

bers

China

India

In the 11th year India - 76 mn. China - 24 mn.

•Of the 160 million subscribers, more than 90 million subscribers added in the last two years

•More than 5 million subscribers added every month since Dec. 2005, translating into the highest growth rate in the world

•On a comparison of growth since introduction of mobile telephony, India surpasses China at the same stage of market evolution


IMPACT OF BUDGET 2007 ON TELECOM SECTORIMPACT OF BUDGET 2007 ON TELECOM SECTOR Budget 2007 has brought disappointment to the telecom

sector.

Mobile service providers have been asked to cut down their roaming rentals as well as their long distance and international call tariffs.

Telecom regulatory authority of india (trai) is of the opinion that this will lead to increased use of roaming, which will ultimately lead to more revenue generation.

With cheaper handsets and lesser tariffs, it is expected that by the year 2010 there will be over 500 million subscribers in the indian telecom market.


CAREER PROSPECT IN TELECOM SECTORCAREER PROSPECT IN TELECOM SECTOR

With the coming of more and more projects such as setting up of new service bases, expansion of coverage areas, network installations, maintenance, etc , the telecom industry is going for high scale recruitments.

There is a huge demand for software engineers, mobile analysts, and hardware engineers for mobile handsets.

There are ample opportunities for marketing people whose services are required to capture more and more customer base.

The emergence of advance technologies and the high growth rate of the industry hold a lot of promise to the jobseekers.


CAREER PROSPECT IN TELECOM SECTORCAREER PROSPECT IN TELECOM SECTOR


TECHNOLOGY USED IN TELECOM SECTORTECHNOLOGY USED IN TELECOM SECTOR

Gsm (global system for mobile communication)

The most popular standard for mobile phones in the world. Its promoter, the gsm association, estimates that 82% of

the global mobile market uses this standard. Gsm is used by over 2 billion people across more than 212

countries Is considered a second generation (2g) mobile phone

system.



2.Cdma (code division multiple access ) One of the basic concepts in data communication

is the idea of allowing several transmitters to send information simultaneously over a single communication channel.

This allows several users to share a bandwidth of frequencies.

This concept is called multiplexing. Cdma employs spread-spectrum technology

and a special coding scheme (where each transmitter is assigned a code) to allow multiple users to be multiplexed over the same physical channel



3. Wireless local loop (WLL)

A term for the use of a wireless communications link as the connection for delivering plain old telephone service (pots) and/or broadband internet to telecommunications

customers



3g technology The technology intended for smartphones- multimedia

cellphones IT PROVIDE 3mbps SPEED FOR DOWNLOADING WHICH

IS VERY HIGH AS COMPARED TO THAT OF 2G TECHNOLOGY

It provide intrenet surfing, downloading,audio video conferencing, fax service and many other broad band applications

3g technology was implemented in japan for the first time in the world

Today the tech. Is serving 25 countries over more than 60 networks in asia, europe and u.S.

Bsnl india will launch 3g tech from dec.2008 in india


FUTURE PROSPECT OF TELECOM SECTORFUTURE PROSPECT OF TELECOM SECTOR

India poised to be a USD 40 bn - 45 bn telecom market by FY 2010

Telecom sector targets announced by Government of India

• 250 million subscribers by 2007

• 500 million subscribers by 2010

• 20 million broadband subscribers by 2010

• Mobile access to all villages with population more than 5,000 by 2006

• Mobile access to all villages with population of more than 1,000 by 2007


THANK YOU

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