TELECOM INDUSTRY IN INDIA 2009

04/08/2023 2

Population 1137 million Geographical area 3,287,000 Sq. Kms. Wireless Sub. 392 Million Wireline Sub. 38 Million. Internet Sub. 12.85 Million (Dec. 08) Wireless Internet Sub 101.10 Million Broadband Sub. 6.22 Million PC Base 35 Million Urban Tele-density 80.97 Rural Tele-density 12.80 Overall Tele-density 36.98 Cable TV Homes ~71 Million. English literate Persons ~110 Million Optical Fibre ~7.7 Lakh

Indian Telecom SectorSnapshot – March 2009

TRAI 2009

Regulatory Structure: Circles Metro circles (major

cities*):• Mumbai • New Delhi • Kolkata

A circles (regions that include other large cities):

• Andhra Pradesh • Gujarat • Karnataka • Maharashtra • Tamil Nadu*

B circles (regions with smaller urban areas and towns):

• Haryana • Punjab • Rajasthan • Uttar Pradesh (East) • Uttar Pradesh (West) • West Bengal C circles (rural areas):• Assam • Bihar • Himachal Pradesh • Jammu & Kashmir • Northeast • Orissa • Kerala • Madhya Pradesh

( Chennai, in the southeast, was previously a separate Metro circle, but as of March 31, 2008, it was integrated into the Tamil Nadu A circle as a single entity.)

BCG Matrix• Airtel • Reliance • Vodafone

BSNLI IDEA cellular TATA Tata Indiacom AIRCEL

MARKET

SHARE IN %

RELATIVE MARKET SHARE

HIGH

LOW

HIGH LOW

• In January 2008, five new entrants -– Loop Mobile , Datacom Solutions, Swan Telecom, S-Tel, UniTech -- were awarded UAS licenses and existing players, Tata Teleservices, Shyam Telelink, Spice Telecom , and IDEA Cellular Ltd. , added to their existing circles, bringing the total number of licenses issued to 281, distributed as follows:

• Basic license holders: 2 • Cellular Mobile Telephony Service (CMTS)

license holders: 39 • Universal Access Service (UAS) license

holders: 240

Rural Coverage About 70 percent of India's near 1.2 billion inhabitants live in rural communities rural teledensity was a mere 12.6 percent Rural wireline connections totalled 10.68 million at the end of December, down by

2.46 percent from 10.95 million at the end of September 2008 The rural wireless subscriber base hit 93.15 million at the end of the year, up 2.38

percent from 90.98 million at the end of September Department of Telecom and BSNL have signed an agreement to provide 861,000

connections to individual users and government institutions through rural and remote exchanges by 2014

To promote rural rollout by the private operators, the Indian government imposed Universal Service Obligations (USO) on the country's operators to build a fund that can finance the rollout of services in areas where there isn't an obvious or pressing business case to do so

The first phase of mobile infrastructure deployment under the USO fund scheme commissioned six different service providers to deploy 7,871 towers

However, by the end of October 2008, only 1,934 towers had been installed The second phase, complete with a tender for an additional 11,049 sites, has yet to

be started The phased rollouts associated with the USO scheme require an additional 40,875

mobile towers to be erected

GSM & CDMA

CDMA Code Division Multiple Access  is a channel access method utilized by various

radio communication technologies.

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 different 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.

By contrast, time division multiple access (TDMA) divides access by time, while frequency-division multiple access (FDMA) divides it by frequency. CDMA is a form of "spread-spectrum” signaling, since the modulated coded signal has a much higher data bandwidth than the data being communicated.

GSM GSM (Global System for Mobile Communication). Estimates that 80% of the global mobile market uses

the standard. It adds General Packet Radio Service(GPRS). It also adds Enhanced Data Rates for GSM Evolution

(EDGE). Another advantage is that the standard includes one

worldwide Emergency Telephone Number, 112. There are five different types of cell sizes in a GSM

network- Micro, Macro, Pico, Femto & Umbrella cells.

Market Share

Snapshot Airtel

Founded in 1985. Key Person: Sunil Bharti Mittal (Chairman & CEO). Revenue $6 Billion. Total number of subscribers in India is over 100 Million. Airtel has market share of 31.65% of total GSM customers. Airtel has its presence in 23 circles except North-East

provision of the country. Company also provides telephone services and internet

access over DSL in 14 circles. Sing Tel owns over 30% of the Bharti Telecom. Bharti Infratel owns 42% of Indus Towers Limited.

Airtel Services Prepaid Mobile connection. Postpaid Mobile Connection. Fixed Line. Broadband. DTH. Airtel Live! (for Ringtones, Wallpapers, Animation games etc.)

Easy Pay. Recharge Prepaid. Blackberry. Apple iPhone.

The BCG Matrix

SWOT AnalysisSTRENGTHS

• Over 100 mn customer base.• Largest cellular service provider in India.• Strategic alliance with Sony-Ericsson, Nokia and Sing Tel.• Presence in all 23 circles in India.

WEAKNESSES:

• Don’t have their own towers which is the strong point of Vodafone-Essar.• Pulling off a deal with South Africa’s MTN could signal the lack of any real emerging market opportunities for the business once the Indian market has become mature.

OPPORTUNITIES:•Tie-up with Google for the customized version of Google search engine.•Strategic partnership with Blackberry and Apple.•Embarking on another JV with Vodafone Essar and Idea Cellular to create a new tower company called INDUS TOWERS.

THREATS:•Earlier a 5.6% partner is a rival (Vodafone).•Quickly changing pace of the global telecommunication industry could tempt Airtel to go along the acquisition trail.•Presence of DOCOMO and Virgin can make an impact because of low cost.

Sponsored Programs Airtel “Connection” at MTV. “Super Singer Junior2” at Vijay TV. Champions league title sponsor with ESPN. Kya Aap Paanchavi Pass Se tez Hain?

Vodafone

Vodafone-Essar P rofile Vodafone is the world’s largest mobile

telecommunications community, employing over 65,000 staff and with over 130 million customers. The business operates in 26 countries worldwide.

In India Vodafone-Essar has market share of 23%.

They are the main threat for Airtel.

Vodafone Serv ices Prepaid Mobile Connection. Postpaid Mobile Connection. VAS (Value Added Services). Caller tunes and Downloads. Entertainment ( Amar Chitrakatha, Movies etc). Devotional (Bible, Gurbani, Pope, etc). Busy Message. Sports. News & Updates. Call Management Services (Call Conference, Call filter etc). Astrology. Finance (Portfolio Tracker, Stocks etc). Travel (Train Schedule, Railway Bookings). Mail Messaging & more(Voice SMS, BlackBerry). Dial in Services (Cricket Commentary, Dil say). Bill Information.

ZoO-ZOo World Famous in India

BSNL Profile Bharat Sanchar Nigam Ltd. formed in October, 2000, is World's 7th

largest Telecommunications Company.

Range of Telecom services: Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-VPN, VSAT, VoIP services, IN Services etc.

Today, it has about 47.3 million line basic telephone capacity, 4 million WLL capacity, 48.11 Million GSM Capacity, more than 37382 fixed exchanges, 44966 BTS, 3140 Node B ( 3G BTS), 287 Satellite Stations, 480196 Rkm of OFC Cable, 63730 Rkm of Microwave Network connecting 602 Districts, 7330 cities/towns and 5.5 Lakhs villages.

BSNL Services BSNL provides almost every telecom service in India.

Following are the main telecom services provided by BSNL:

Universal Telecom Services : Fixed wire line services & Wireless in Local loop (WLL) using CDMA Technology called bfone and Tarang respectively. As of December 31, 2008, BSNL has 73% market share of fixed lines.

Cellular Mobile Telephone Services: BSNL is major provider of Cellular Mobile Telephone services using GSM platform under the brand name BSNL Mobile. As of March 31, 2008 BSNL has 19% share of mobile telephony in the country.

Continue… Internet: BSNL provides internet services through

dial-up connection (Sancharnet) as Prepaid, (NetOne) as Postpaid and ADSL broadband (BSNL Broadband). BSNL has around 50% market share in broadband in India. BSNL has planned aggressive rollout in broadband for current financial year.

Intelligent Network (IN): BSNL provides IN services like tele-voting, toll free calling, premium calling etc.

Services Portfolio

BSNL LANDLINE PHONE PLUS SERVICE NEW TELEPHONE CONNECTION PERMANENT CONNECTION CONCESSION IN RENTALS SHIFT OF TELEPHONE TRANSFER OF TELEPHONE TELEPHONE TARIFF BSNL MOBILE POSTPAID PREPAID UNIFIED MESSAGING GPRS/WAP/MMS DEMOs TARIFF SMS & BULK SMS I NET OVERVIEW SERVICES ON I NET USING ON I NET I NET CONNECTIONS TARIFF

BSNL WLL INTERNET SERVICES NETWORK BROADBAND TYPES OF ACCESS WI-FI CO-LOCATION SERVICE BSNL WEB HOSTING INTERNET TARIFF DIAL UP INTERNET SMS& BULK SMS BSNL BROADBAND REGISTER ONLINE TARIFF USO FUNDED RURAL BROADBAND FAQ CHECK USAGE BSNL MANAGED NETWORK

SERVICES BSNL MPLS-VPN ISDN TARIFF

Services Portfolio INTELLIGENT NETWORK FREE PHONE SERVICE PREMIUM RATE SERVICE INDIA TELEPHONE CARD VIRTUAL PRIVATE NETWORK (VPN) VOICE VPN UNIVERSAL NUMBER UNIVERSAL PERSONAL NUMBER TELE VOTING

VIDEO CONFERENCING OVERVIEW TARIFF FAQ

AUDIO CONFERENCING OVERVIEW TARIFF FAQ

TELEX/ TELEGRAPH TELEX/ TELEGRAPH TARIFF

EPABX EPABX FREE EPABX TARIFF CENTREX CENTREX TARIFF

INMARSAT

KU-BAND

TRANSPONDER

New InitiativeWi MAX: Tender Invited for 1000 BTS at Rural

Block HQs covering 25000 village community centres

IPTV

Launched in Three Cities viz. Bangalore, Pune & Kolkata

Agreement signed with Franchisees for another 50 Cities

VOIP EOI under Issue

SWOT AnalysisSTRENGTHS• Pan India Reach.• Experienced telecom service provider.•Huge resources.•Most trusted brand.•Huge optical fibre network and associated bandwidth.

WEAKNESSES• Non-optimization of network capabilities.• Poor marketing strategies.• Legacy of poor service image.• Huge aged manpower.• Lack of strategic alliance.• Procedural delays.

OPP market growth around 20 lac per month.• Untapped broadband services.•Diversification of business to turn-key projects.• fuller utilization of slack resources.

THREATS• Tough competition.• Entry of international players.• Decreasing ARPU.•Populist policies of government like “One India” plan.

Reliance Communication

Reliance Communication Earlier it is known as Reliance Infocom. It is the dream of Late Dhirubhai Ambani of

digital India. Now it is present in around 18 circles. It is providing its services in both GSM as well as

CDMA technology. RCOM is number 1 in Indian telecom industry

among CDMA mobile technology service provider.

RCom Services Prepaid. Postpaid. R Services. R World :> GSM & CDMA. BlackBerry. Broad net Netconnect Reliance Landline. Broadband Leasedline

Conti… Virtual Private Network (VPN) Wireless data WDVPN. Video conferencing. Internet Data Center (IDC). Reliance Global Call. Reliance Big TV. Reliance IPTV. Reliance PCO. IPLC. Audio Conferencing.

RCom Market Strategy RCom targets rural customers with new services

& sachet pricing for mobile internet pricing. Reliance mobile plans unique contest based on

ICC champions Trophy. Reliance Mobile introduces Antakshari service

on GSM and CDMA networks. RCOM signs strategic tie-up with kodiak

networks for Nationwide Roll-out of Mobile conferencing service.

RCom Market Strategy Reliance CDMA provides their own mobile

phones. Reliance GSM provided their SIM cards at

Rs.25. and free talk time of Rs 10 for 3 months that is a good strategy to enter into the market.

On the 30th December 2008, Reliance became the first telecom company in India to operate in both CDMA as well as GSM technologies

!dea Cellular

!dea Profile It initially started in 1995 as a joint venture among the

Tata's, Aditya Birla Group and AT&T by merging "'Wings Cellular'" operating in Madhya Pradesh, Uttar Pradesh (UP) West, Rajasthan.

Initially the Birlas, the Tata's and AT&T Wireless each held one-third equity in the company. But following AT&T Wireless' merger with Cingular Wireless in 2004, Cingular decided to sell its 32.9% stake in Idea. This stake was bought by both the Tata’s and Birla’s at 16.45% each.

!dea Services

Idea for You•Prepaid Plans•Postpaid Plans•Idea Net Setter•New ISD rates

Idea for Your Business•Voice Services•Business Applications•GPRS Applications•Customized Solutions•Corporate Connection Punjab

Idea Fresh•Activate Dialer Tones•Download Latest Games•Personalize Your Phone With Themes•Cool Animations•Free Downloads

Promotional Activities Introduction of ‘Zac’ as a Mascot for !dea. Entry in Orissa and Tamilnadu. Idea partners IIFA for 10th Anniversary

Awards. Idea wins prestigious ‘Golden peacock ‘

Award 2008 for “My Gang”. Bidding, Biking mania, Chhappar Phad ke etc

contests organized by Idea Cellular.

Tata Teleservices. TTSL is a part of TATA Group of companies. 26% equity stake of TTSL is acquired by NTT

DCOMO Japanese Telecom Giant. They are providing CDMA mobile services

targeted towards the youths , in association with Virgin Group on a franchisee model basis.

TTSL’s enterprise value is $10.8 billion. They are present in 20 circles. They have a subscriber base of over 40

million in over 5000 cities.

Strategies They Acquired Hughes Telecom in 2002. Strategic alliance with Motorola, Ericsson, Lucent, and ECI Telecom

for 3G infrastructure establishment The company joined hands with Tata Chemicals, Tata Kisaan Sansar

network, disseminating information through these centres and using them as local distributors.

The company's retail business has around 3,000 outlets nationally, comprising 600 TTSL owned stores and around 2,500 stores in the Franchisee format. Tata Indicom already covers the top 700 towns in India in terms of population through Tata Indicom Exclusive Stores.

Tata Indicom also maintains an online portal for its customers i-choose where the customers can buy Tata Indicom post-paid connections and prepaid recharge vouchers with an upfront commitment of activation and delivery of the handset within 72 hours

Services Provided Wireless phones. Landline Phones. Internet & Broadband. Net Telephony. Calling Card. Mobile Phone:- Prepaid Mobile Phones. Postpaid Mobile Phones.

Position Map High Tariffs

Low Tariffs

Wide Network Coverage

Narrow Network Coverage

BSNL

• Reliance

Airtel

Idea Vodafone

Role Of VAS in Telecom Mobile value-added services (m-VAS) is the ability for

cellular operators and service providers to charge a premium price for the services (beyond voice conversation) they offer to their subscribers (mobile users).  E.g.,

SMS MMS CRBT(Call ring back tone) Video Streaming. Mobile Advertisement. mCommerce, etc.

Source: pluggd.in

Source: pluggd.in

Role of Mobile in TV Contests

Prediction of Mobile VAS in India

Mobile VAS accounts to 10-12% of the total telecom revenues.

Out of which 8-10% of the total mobile subscribers are expected to be GPRS (General Packet Radio Services) subscribers as well.

mobile VAS revenue growth contributing to telecommunication industry is expected to grow to 30% in next 5-7 years

Many experts are predicting mobile VAS in India to be 1 billion USD market by 2010.

Parameters Airtel Vodafone BSNL RCOM MTNL Idea Tata Indicom

Total Mean

Subscribers Base

8.42 8.03 6.59 6.56 5.95 6.94 5.83 53.47

Local pricing

7.39 7.75 7.04 6.53 6.35 7.22 5.89 54.32

STD pricing

7.53 7.41 6.26 6.83 5.62 6.94 5.65 52.38

Ease of Payment

8.03 7.91 6.78 6.44 5.82 6.22 5.86 52.71

Network coverage

8.15 7.98 7.19 6.53 4.28 6.08 5.47 50.34

VAS 7.39 7.46 6.78 6.71 4.48 5.79 5.83 48.60

Problem solving

7.50 7.46 6.04 5.56 4.55 6.01 5.39 48.15

Brand loyalty

7.84 7.91 7.08 6.39 4.68 5.72 6.03 52.03

Technology issues

7.51 7.53 6.59 6.97 4.28 5.72 5.83 48.59

Dealership network

7.99 8.03 6.11 6.94 5.42 7.51 6.18 53.84

Corporate image

8.15 8.06 6.67 8.07 6.25 8.07 7.46 60.08

Ease of getting new connection

8.33 8.34 8.22 8.35 7.21 8.15 7.35 62.99

Ads & Promotion

8.17 8.17 5.96 7.33 4.62 7.44 6.15 53.99

Availability of VIP No.

6.88 6.84 5.59 6.09 5.42 6.46 5.47 48.31

Source: 4Ps B&M and ICMR

Ranking of Telecos.Ranking Telecom Company Mean

1. Airtel 147.95

2. Vodafone 147.24

3. Idea 125.89

4. RCOM 125.82

5. BSNL 123.63

6. TATA 115.22

7. MTNL 101.75

Source: 4Ps B&M and ICMR survey on India’s Best service Companies

Subscriber Base of Telecos in Gujarat

Company Subscriber BaseIdea Cellular 4230479 (July, 2009)

Airtel 4467184 (July, 2009)

Vodafone 8761853 (July, 2009)

Tata Teleservices NA

Reliance Communication NA

BSNL 2477137 (July, 2009)

Source: COAI (Cellular Operator Association of India)

Tele-density of the state is around 45% against the national tele-density of 35%. Gujarat has total 2.5 Crore subscribers.