Telecom+Industry+India+2009

8/8/2019 Telecom+Industry+India+2009

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1Telecom Industry: India 2009

TELECOM INDUSTRY - INDIA

1. Executive Summary:While the global economic downturn has adversely affected almost all the industrysectors, the Telecom Industry stands out as an exception. Large investments havebeen planned in the sector during the ensuing year on the back of rapid pace ofsubscriber additions, introduction of new technologies such as 3G, Wi-Max,Internet Protocol Television (IPTV) etc. and Re1gulator driven initiatives. Allmajor players in the industry are banking with us and 88% of the exposure of thesector is in the CAG portfolio.

While the sector is on a growth trajectory, the declining Average Revenue per User(ARPUs), increasing Minutes of Usage (MoUs) and introduction of MobileNumber Portability (MNP) etc are expected to affect the Sector margins.

The increasing competition, with the presence of 9-10 number of players in onecircle (highest in the world), is bound to tigger new initiatives in the near future.However, the break even period for new players is expected to be around 6-7years.

While the outlook for the existing service providers will be positive, it is expected

to be neutral for new service providers, in view of the stiff competition they wouldface from the established players.

The outlook for the Telecom Equipment Manufacturers is expected to be neutralon account of increase in imports to meet the high demand as also sharing ofnetwork infrastructure.

2. Industry Overview:The Indian Telecom industry is one of the fastest growing sectors in the country.The Industry, unlike others, was not hit to a great extent by the recent slowdown inthe economy. Telecom Service Providers are the main drivers of the TelecomIndustry whereas equipment manufacturers witness uncertainties as the orders fortransmission towers and other hardware are spread out unevenly over time.

Large investments are being planned in infrastructure to enable rollout of servicesin hitherto uncovered areas and to enhance capacities. The number of telephoneconnections in the country (mobile and landline) crossed 429 million in March


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2009, as against 300 million in March 2008, registering a growth of 43%. Theoverall tele-density has reached 37% in March 2009 as against 26% in March2008.

The Industry has also witnessed the entry of global players such as Telenor, Swan,

and NTT DoCoMo indicating that substantial growth potential exists, which is alsoevident from the fact that India has been adding more than 10 million subscribersevery month.

3. Industry structure:The Telecom Industry consists of two segments;

Telecom Service Providers Telecom Equipment Manufacturers

4. Telecom Service Providers:Telecom Services can be divided into the following segments:

i. Wireless Segment consisting of Global System for MobileCommunications (GSM) & Code Division Multiple Access (CDMA)(Mobile)


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ii. Wireline Segment (Fixed Line)iii. Internet and Broadband SegmentFor purposes of allocation of Spectrum, India is divided into 22 Circles

consisting of 4 Metropolitan areas and 18 Non-Metro areas. These areas havebeen classified into three categories A, B and C, on the basis of revenuegenerating potential with the Category-A Circle having the highest revenuepotential.

Categories of Circles

Metros Chennai, Delhi, Kolkata, Mumbai

Category A Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Tamilnadu.

Category B Haryana, Kerala, Madhya Pradesh, Punjab, Rajasthan, UttarPradesh (East)

Category C Assam, Bihar, Himachal Pradesh, Jammu & Kashmir, NorthEast, Orissa

India added 15.64 million mobile subscribers in March 2009, and set the globalrecord for adding the maximum number of users in a single month.

According to the Telecom Regulatory Authority of India (TRAI), the MobileSegment accounts for close to 92% of the countrys Telecom market. The totalmobile base stood at 452.90 million by end May 2009.

Major Players: Bharti-Airtel, Vodafone-Essar, Idea, Aircel, RCom, Tata

Telecommunication, BSNL, MTNL, Swan, Telecor

4.1 Key Developments: Department of Telecom (DoT) has initiated the process of imposing

penalties on Telecom Operators for violating Subscriber VerificationNorms. Operators have to pay a penalty of Rs.2,000 for each subscribertaken on without proper identification document.

The Defence Services have demanded that a portion of 3G spectrumshould be reserved for their communication needs. DoT has decided tohave an exclusive band for the Defence Services with commercial usersallowed access to the civilian band only.

DoT has modified the rollout obligations for new Telecom Operators.The new entrants need to roll out services within one year from the dateof allotment of Spectrum, as against within a year of getting the licence.The amount of penalty for delay has also been reduced. New Entrants


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would earlier have had to pay a total of over Rs.51 crs. in penalties byApril, 2009. However, with the modified obligation the penalty wouldnow be Rs.2.6 crs. payable by July 2009.

DoT is partnering with Private Telecom Operators to set up wirelessbroadband infrastructure in rural areas. Companies selected through thecompetitive bidding route will get financial support from the UniversalService Obligation (USO) Fund.

4.2Regulatory Initiatives and PoliciesTRAI, facilitates rollout of new technologies and applications, keeps checkon tariffs, allocates spectrum and recommends improvement to theGovernment and Industry alike.

The Cabinet Committee on Economic Affairs (CCEA) has adopted newguidelines for computation of foreign equity holding in Indiancompanies. The new norm is expected to allow companies to raise thelevel of foreign investment and which will benefit all such companiesthat have touched their Foreign Direct Investment (FDI) ceiling.

FDI is permitted to the extent of 100% through the automatic route inTelecom Equipment Manufacturing while the ceiling in TelecomServices has been raised to 74 %.

Unified Access Licensing is being introduced for telecom services on apan-India basis. DoT has proposed an additional one-time charge for spectrum held

beyond 6.2 MHz (for GSM Operators) and 5 MHz (for CDMAOperators), which would impact negatively on GSM Operators but wouldbe neutral for CDMA Operators.

The Government is implementing a program for connecting 66,822hitherto uncovered villages under the Bharat Nirman Programme. The

Government also intends to invest Rs.10,000 crs. in setting up 1.12 lakhCommunity Service Centres in rural India to provide broadbandconnectivity.

DoT has allowed passive infrastructure sharing among operators, whichincludes sharing of physical sites, buildings, shelters, towers, powersupply and battery backup. They have also allowed sharing of active


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providers to provide content for 3G services. MTNL is looking to tap its 15,000IPTV subscribers in Delhi and Mumbai for 3G services.

4.4Mobile Number Portability:The implementation of Mobile Number Portability (MNP) would givesubscribers the liberty to switch operators while retaining the same call number.DoT has awarded licences to Syniverse and Telecordia, for the launch of thisservice which will be done in a phased manner, starting with the metros and afew category 'A' circles during the third quarter of 2009-10.

The large mobile operators will be more susceptible to competition in theimplementation of MNP as compared to the relatively new players. Largeplayers will witness a 1.5-2.0% increase in their churn rates, resulting in acontraction in operating margins on a pan-India level by about 250-300 basis

points (bps). On the other hand, a new entrant managing to garner 10% of thissubscriber churn by weaning them away from incumbent operators couldachieve an EBITDA break-even in 6-7 years as compared to earlier estimates of8-9 years.

4.5Competition:The industry is witnessing stiff competition with the entry of new players andwith each Circle comprising of more than 10 players which is one of the highestconcentrations anywhere in the world. The industry is also likely to witness a

variety of marketing and product service strategies as new entrants try to gain afoothold by launching value added services to take on the strength of theestablished players. As stated earlier the implementation of Mobile NumberPortability (MNP) will give new licencees an opportunity to attract subscribersof other operator networks, provided they are able to deliver Quality of Service(QoS) and content.

DoT and TRAI have enforced a three-year lock-in period, whereby newentrants cannot sell equity. This would help to prevent the entry of not soserious Operators into the Telecom Industry.

Of the 9 companies that were issued 121 licenses, the 6 new entrants areUnitech Wireless, Swan Telecom, S Tel, Loop Telecom, Datacom and ShyamTelelink. These companies have been allotted spectrum in most of the Circlesand are now in the process of entering into alliances with either Foreign orDomestic players.


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Operators Snapshots

Operator Promoter(s) No. ofLicensedCircles

Start up Spectrum(No. of Circles)

Unitech Wireless Unitech 22 21

Swan Telecom Dynamix BalwasGroup

13 13

Datacom Videocon 22 17Loop Telecom Essar Group, BPL

Mobile21 13

Shyam Telelink Shyam Group,(Russia BasedSistema)

22 22

S Tel Skycity Foundations,Telecom Investments

6 6

More particulars about the new operators are furnished in Annexure I

4.6Value Added Services (VAS)Venture Capitalist firms such as Canaan Partners, Draper Fisher Juvertson,Helion, and Nexus India are looking to fund innovation in services such asmobile payment options, advertising, voice-based SMS and Satellite VideoStreaming. Mobile Value Added Services (VAS) is estimated to be aRs.3,500 crs. market with a 20% y-o-y growth and which is likely to touchRs.15,000 crs. by 2012.

VAS were valued at Rs.5,700 crs. in June 2008, and is expected to grow rapidlyat a CAGR of 70% to touch Rs. 9,400 crs. by June 2009. Currently, VAS inIndia accounts for about 10% of the operator's revenue which is expected toreach 18% by 2010.

4.7 Growth Drivers:Growth in mobile services has been driven by a sharp fall in subscription costsand rising incomes which have increased the affordability of mobile services.The following are the major factors which are expected to drive the growth ofthe industry:

Decreasing Cost of Subscription: The cost of life-time prepaid cards hasfallen from Rs.999 to Rs. 99. The availability of low denomination pre-paidvouchers, bundled offerings and other product innovations have made mobileservices affordable in semi-urban and rural markets. Moreover, with increasingcompetition in the mobile handset manufacturing segment, the cost of an entrylevel handset has fallen considerably.


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Favourable Regulatory Environment: The Governments Telecom Policyinitiatives have been growth-oriented and forward looking. Various incentivessuch as increase in foreign investment limits to 74%, implementation of theUnified Access Licensing Regime (UASL), availability of the UniversalService Obligation (USO) fund for enabling expansion in rural areas andintroduction of MNP have led to the proliferation of mobile services in thecountry.

IPTV and DTH Direct-to-Home (DTH) industry revenues are expected to bearound Rs.12,500 crs by 2013. In the near future, consolidation of DTHservices would take place along with increased interest in Internet ProtocolTelevision (IPTV), Streaming Video on Demand, Interactive Games etc.

Low Penetration Levels: The Indian wireless industry, with a 33%penetration, is only second to China in terms of number of subscribers. Most of

this growth has come from urban India where penetration is close to 60%, whileit is less than 15% in rural markets. This does present the industry with anopportunity for growth. (Exhibit 1)

Exhibit 1: T elecom Subscriber Base: Growth Estimations


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4.8 Rural Telephony:With over 50% of net additions emanating from rural markets, this has becomea focus point for the industry. As ARPUs (Average Revenue per User) whencompared to global levels are lowest in India, volume growth is the main

revenue driver for the industry. The Universal Service Obligation (USO)Subsidy Support Scheme would enable sharing of wireless infrastructure inrural areas with around 18,000 towers slated to come up by 2010.

However, increasing penetration in rural markets, may not see commensurategrowth in revenue. A higher-than-expected decline in ARPU and MoU couldalso hit margins.

4.9Average Revenue per user (ARPU):With the rapid pace of subscriber additions, the industry is also characterised bydeclining ARPU (Exhibit 2). Industry wide GSM and CDMA ARPUs havedeclined (since 2004) at an annual rate of 12% and 20%, respectively. Thedecline can be attributed to customer friendly policy initiatives by theRegulators, intensifying competition, reduction in Local and NLD call charges,a rising share of pre-paid subscribers and a majority of new additions beingfrom the low income groups.

(Exhibit 2)


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4.10 Minutes of Usage (MoUs):MoUs have increased from 442 in FY07 to 508 in FY09 but are expected tofall to 469 in FY10 and stablise at that level as more low usage customerscome on board, (Exhibit 3).

(Exhibit 3)

With the consistent fall in ARPUs, Telecom Operators have shifted their focusto increasing the Minutes of Usage (MoU) and stabilising the Average RevenuePer Minute (ARPM) (Exhibit 4).

(Exhibit 4)


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4.11 Industry Financials (Major Players):For the quarter ending March 2009

Rs. Crs. G% Rs. Crs. G% Rs. Crs. G% Rs. Crs. G% Mar 08 % Mar 09 % Mar 08 % Mar 09 %

Bharti Airtel 9049.7 21.5 9016.8 21.6 3569.6 24.5 2075 15.8 38.5 39.4 24.1 22.9

Reliance communication 3753.6 8.6 3172.7 -8.2 1676.4 30.9 982.8 102.6 37 44.7 14 26.2

Idea Cellular 2832.5 42.7 2832.5 42.7 763.4 13.1 304.3 9.4 34 27 14 10.7

MTNL 1287.2 -11.2 1085.2 -7.5 126 -74.1 -83.3 33.5 9.8 12 -6.5

Tata Communication 1273.2 43.1 886.9 3.7 564.3 204.1 302.4 429.7 20.9 44.3 6.4 23.7

Tata Teleservices 508.2 10.6 536.4 17.7 120.2 1.4 -39.2 25.8 23.7 -11.4 -7.7

G T L 422.9 13.6 412 10.7 75.5 26.7 26.7 -0.9 16 17.9 7.2 6.3

Company

Income Sales PBDIT PAT PBDIT/Income PAT/Income

(Source: CMIE)

Bharti Airtel, the largest Telecom Operator accounting for nearly 50% of thetotal industry sales, increased sales by 22% during the quarter ended March2009. A dip in other expenses aided the faster 24% growth in PBDIT. TheCompany reported a robust 16% PAT growth. While, the companys PBDITmargin expanded by 90 basis points, its PAT margin contracted by 120 basispoints during the quarter.

Reliance Communications total income increased by 9% despite showing a8% drop in sales. Other Income increased by Rs.564 crs. by way of financecharges with increase in PAT by 102% to Rs.983 crs. over the same period.

Idea Cellulars sales grew by a 43%. Subscriber acquisition and servicingexpenditure increased by 25%, with network costs more than doubling to

Rs.704 crs and Regulatory Charges increasing by almost 50 % to Rs.811 crs.This has resulted in a muted 13.1% PBDIT growth at Rs.763.4 crs. A sharp45% increase in depreciation expenses restrained PAT growth to 9%.

Detailed Players profile is furnished in Annexure II

4.12 Key Concern Areas: Spectrum allocation: Spectrum is a scarce resource and is critical for the

rapidly increasing the subscriber base of Telecom Operators. Additional

spectrum is always required by the both existing and new players formaintaining the service quality and catering to the increasing subscriberbase. Delay in allocation or non availability of spectrum would result inpoor quality of service and become a major constraint to expansion.

Price wars: The decrease in rates for voice calls directly affect theprofitability of the Sector leading to declining ARPUs. A move by one or


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more operators to increase subscriber base by reducing tariffs wouldresult in price wars across the Sector.

License fee: Indian Telecom Operators have to apportion a substantialpart of their revenues to meet taxes levied by the Regulatory Authority.

The Regulators are presently looking to increasing the charge onspectrum beyond 6.2 MHz. This increase is bound to adversely affect themargins of Operators.

4.13 Investments Outlay: Unitech Wireless backed by Telenor Norway has announced a Telecom

Infrastructure Project with an investment Rs.10,000 crs. spread over 3years. The Company plans to initially roll out in eight circles.

Idea Cellular has announced an infrastructure development project inOrissa, involving a cost of Rs.1,000 crs. The Company had alsoannounced a Rs.1,000 crs. GSM Expansion Project in Tamil Nadu.

Tata Teleservices intends to go in for a Rs.1,000 crs. GSM expansionproject.

MTNL is adding 150 additional towers to its existing network of 600towers in Mumbai and another 90 towers in the satellite township of NaviMumbai by March 2010.

Bharat Sanchar Nigam Ltd. (BSNL) announced a Rs.650 crs. 3G MobileServices & Telecom project to be launched in Bangalore. The companyalso announced a project to launch Wimax, IPTV and 3G services inKerala.

Bharti Airtel announced a multi-state Transceiver Station Project forsetting up 1,00,000 base transceiver stations across India by December2009. This investment in infrastructure will support the Companys planto roll out value added services such as high speed internet and mobilee-commerce in rural areas.

4.14 Outlook: With 10 million subscriber additions a month, the Telecom Sector

continues to maintain its growth momentum. With the launch of 3G andWi-max services the industry is expected to reach new levels in comingfuture.


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Network sharing has taken many forms, ranging from passive sharing of cellsites and towers to sharing of Radio Access Networks (RANs) and other activeelements. Passive infrastructure sharing however, is most common due to therelative technical and commercial simplicity. There has also been a surge indemand for equipment such as batteries, towers, shelters and cables. However,the active infrastructure equipment industry has not grown at same pace.Companies such as Motorola, Nokia Siemens Networks (NSN) and Ericssonhave been importing components in bulk to meet demand. Tower sharing hascome under focus in recent times, which process has given rise to bilateralbarter arrangements. However, this has further evolved into a system wherebyindependent tower companies are jointly owned by telecom operators. Towersharing, has led to significant reduction in costs. However, synergies that wereexpected from tower sharing are yet to be realised with the average number ofoperators per tower presently at 1.3 as against the target of 1.8 (the ratio in the

US is 2.5)

5.1 Outlook:Passive infrastructure sharing will be an attractive option for operators as

there is need to garner resources to face imminent 3G auctions.

Rentals and number of tenants are likely to decrease further emphasising theneed for higher occupancy ratios. Tower companies will have to resort torepositioning themselves as integrated service providers in order to remaincompetitive.

Industry is expected to see investments of about Rs.5,200 crs. in towerinfrastructure through 2012. The number of towers expected to rise by 60%with 350,000 towers in place by 2012 having a tenancy ratio of 1.8-1.9operators per tower.

In the above scenario of falling income, increased competition and subduedcapital expenditure, the outlook for the segment would be neutral.


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Annexure I

Swan Telecom:

Swan Telecom was the first of the new licensees to divest a part of its stake to a

strategic foreign telecom player. Emirates Telecommunications Corporation(Etisalat), had bought a 45% stake in Swan for US$900 million. The remaining55% is held by Dynamix Balwas Group, a Mumbai based Real Estate andHospitality business group.

Swan has approval to offer both National and International Long Distance(NLD and ILD) services, as also to operate as an Internet Service Provider. TheCompany offers the complete array of Telecom Services- from mobile to fixedline, carry voice, data and internet services.

Swan has entered into strategic alliance with BSNL to utilise the laters networkto roll out its own services. The tie-up includes Swan using BSNLs leased linesand its fibre optic backbone; routing NLD traffic through the state ownedoperators network; intra- and intercircle roaming arrangements andcooperation in planning infrastructure expansion. The company holds spectrumfor 13 circles and plans to roll out usuage by July-August 2009.

Unitech Wireless:

Unitech Wireless has also offloaded a 60% stake to Norways Telenor forUS$1.2 billion. Unitech has received spectrum to operate in 21 out of 22Circles. The Company is setting in motion the first phase offering services in 13Circles by mid 2009. The Company is planning to invest Rs. 15,000-20,000 crs.in the next three years.

Datacom:

The Company was allotted the spectrum early but could not utilise theadvantage due to controversy between the promoter Videocon and MahendraNatha Group. The Company has downsized its Orissa operations and hopes tolaunch the services in other Circles by end of 2009.

Loop Telecom:

Loop Telecom have obtained licences for providing mobile services in 21Circles and has received the start-up spectrum in 13 circles. The company isunder debate related to Essars direct stake of 9.9%, However, the Company is


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in process of establishing network to roll services at an investment of US$2-2.5billion, to be raised through various options including debt and equity.

Shyam Telelink:

Shyam Telelink has the licence to launch the services across the country andhas successfully launched CDMA mobile services in Rajasthan. The Companywill follow up with the launch of services, South India, followed by the Northand the East. It is planning to invest US$1.5 billion in 2009 for networkrollouts.

S Tell:

S Tell is a Chennai based Telecom company promoted by Skycity Foundationsand Mauritius based Telecom Investments. The company has spectrum for 6Circles.


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Annexure II

Bharat Sanchar Nigam Ltd

Bharat Sanchar Nigam Ltd (BSNL) is a public sector undertaking, wholly-ownedby the Government of India. It was formed in October 2000 through thecorporatisation of DoT.

BSNL provides telecom services throughout the country, except Delhi andMumbai. The services provided by the company include Fixed Line, GSM mobile,CDMA mobile, National Long Distance, International Long Distance, Internet,MPLS-based virtual private network (VPN) services, ISDN, Leased Lines,Intelligent Network, Telex/Telegraph and Electronic Private Automatic BranchExchange (EPABX) services.

At the end of March 2009, BSNL had a total of 29.35 million subscribers for itsfixed services, representing about 78 per cent of the total fixed services subscriberbase in the country. However, it is facing stiff competition from private mobile aswell as fixed players, which has hampered its fixed services subscriber growth. Atthe end of March 2009, BSNL had 46.7 million GSM mobile subscribers across 20circles having risen from 36.2 million in March 2008. 3G Mobile Services werecommercially launched by BSNL in February 2009, in 11 cities namely Agra,Ambala, Jalandhar, Jaipur, Dehradoon, Shimla, Lucknow, Ranchi, Durgapur,Haldia and Patna. The initial subscription cost to avail the 3G services offered bythe Company was Rs 300.

Mahanagar Telephone Nigam Ltd

Mahanagar Telephone Nigam Ltd (MTNL) was set up by the Government in 1986to provide telecom services in Delhi and Mumbai. Telecom services in these twocities, the highest revenue-generating service areas in the country, were previouslyunder the purview of the Department of Telecommunications. The governmentholds a 56.2% stake in the company.

MTNL provides basic telephone services, post paid GSM cellular services underthe Dolphin brand, pre paid GSM cellular services under the Trump brand, CDMAmobile services under the Garuda brand and Internet services. The other servicesprovided by the company are Digital Network Service, Intelligent NetworkService, Leased Line Service and Telex Service.


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In December 2008, MTNL announced the launch of its 3G services in the DelhiCircle and later in the Mumbai Circle with prepaid plans ranging from Rs. 250 toRs. 2500.

Bharti Airtel Limited

Bharti Airtel Limited is an integrated telecom service provider, providing all typesof services namely fixed, mobile, ILD NLD, VSAT, Internet and networksolutions. The company was incorporated in July 1995, is Indias largest telecomservice provider with presence in all the 22 circles of the country and a marketshare of 24.5% of total wireless market. Airtel has an aggregate subscriber base ofmore than 100 million customers as on 31st May, 2009 of which 99.5 million arefor GSM services.

The company was the first one to launch lifetime validity scheme in the prepaid

segment, with one-time charge of Rs. 999. The company then pioneered thelifetime validity scheme by slashing one time charges to Rs 495 and then to Rs.199. In anticipation of increasing competition, Bharti Airtel further slashed thelifetime prepaid rates to Rs. 99 w.e.f January, 2009.

Airtel has initiated merger talks with MTN, one of the major telecom operators inSouth Africa.

Vodafone-Essar group

Vodafone-Essar group, earlier Hutchison-Essar group, provides GSM-based

mobile services in 16 circles of the Country and is the third largest player in theindustry. The company went through a major transformation phase, whereVodafone Limited, a leading UK-based telecommunications services provider,acquired a controlling stake of 67% in the Hutchison-Essar group for an enterprisevalue of US$18.8 in February 2007. The remaining stake is held by the otherpartner, Essar Ltd.

At the end of March 2009, the Vodafone-Essar group had 68.77 millionsubscribers, with a market share of 17.6%.

Idea Cellular Ltd

Idea Cellular's antecedents date back to 1995, when the Aditya Birla Group andAT&T (through Birla AT&T - Maharashtra, Gujarat) and the Tata Group (throughTata Cellular- Andhra Pradesh) came together to set up cellular networks. Thecompany then called Birla AT&T Communications Ltd, started offering cellularservices in the Gujarat Circle in January 1997 and in the Maharashtra Circle in


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March 1997. In 2000, the company decided to merge with Tata Cellular andsubsequently acquired RPG Cellcom, the cellular operator in Madhya Pradesh. Themerged entity of Birla AT&T and Tata Cellular was renamed Birla Tata AT&TCommunication Ltd in May 2001. In May 2002, the name of the company wasagain changed to Idea Cellular Ltd.

After the group acquired the 48% holdings from the Tata group, the Tatascompletely exited from the company. Aditya Birla Nuvo Ltd and its subsidiariesacquired 15% of the 48% holdings while Birla TMT Holdings Pvt. Ltd acquiredthe balance. With this the combined holdings of the Aditya Birla Group companiesincreased to 98.3%.

In July 2008, Idea Cellular acquired a 40.8% stake in Spice Communications at aprice of Rs.2,176 crs. This will help the company gain a foothold in the Punjab andKarnataka circles, where Spice has a combined subscriber base of around

4.5 million. The current market share of the company is 11.5% as on April 2009.

Reliance Communications Ltd

Reliance Communications Limited (RCom) is an integrated pan Indian telecomoperator and a part of Anil Dhirubhai Ambani Group (ADAG). It offers fixedwireless services based on CDMA technology, CDMA and GSM mobile services,Wireline, ILD, NLD, Internet, and Data services. The company became the firstCDMA operator to offer International roaming facility to its subscribers.

The company provides mobile services in all 23 circles across the country, whereit provides CDMA based mobile services in 21 circles (expect Assam and NorthEast) and GSM based mobile services in eight circles. The company also providesfixed services, in 21 circles across the country

RCom has the second largest subscriber base with a market share of around 19%.The company launched the GSM services in January 2009 and added a recordnumber of subscriber in the first month of its GSM launch.

Tata Teleservices Ltd. (TTSL)

TTSL provides a whole bouquet of services under the Tata Indicom brand. Itsservices include Basic Telephone, Internet (broadband as well as dial-up) and NLDservices. The Telephone services include common wireline as also fixed wirelesstelephones and CDMA mobile services.

As of March 2009 the company had 381,610 fixed line subscribers as compared to322,618 in March 2008. While the total mobile subscriber base stood at


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28.2 million, having risen from 19.7 million as of March 2008. They have a of 7%market share at the end of March 2009.

Aircel

The Aircel Group, providing GSM based mobile services, is a joint venturebetween Maxis Communications Berhad of Malaysia and Apollo HospitalEnterprise Ltd of India, with Maxis Communications holding a majority stake of74%. Aircel commenced operations in 1999 and is the leading player in TamilNadu. Aircel bagged the pan India licences and launched its services in variouscircles in 2008.

The company launched operations in Kerala, Karnataka, Delhi, Uttar Pradesh (E),Uttar Pradesh (W) and the Andhra Pradesh Circles in 2008-09. Aircel alsolaunched its operations in the Mumbai circle in April 2009. With this launch,

Aircel Cellular is now present in 16 circles across the country.

The companys total mobile subscriber base stood at 18.5 million subscribers inMarch 2009 having risen from 10.6 million subscribers at the end of the previousyear with a market share of 4.7%.

Airtel

25%

BSNL

12%

R Com19%

Idea

11%

Tata

9%

Vodafone

19%

Others5%

Market Share of Major Mobile operators as of April

2009 (%)

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