Indian Telecom sector, like any other industrial sector in the country, has gone through many phases of growth and diversification. Starting from telegraphic and telephonic systems in the 19th century, the field of telephonic communication has now expanded to make use of advanced technologies like GSM, CDMA, and WLL to the great 3G Technology in mobile phones. Day by day, both the Public Players and the Private Players are putting in their resources and efforts to improve the telecommunication technology so as to give the maximum to their customers.
Fixed-line Telephony
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Public Players Subscribers Private Players Subscribers
Mobile Telephony
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Public Players Subscribers Private Players Subscribers
Internet Investment
The Indian telecom sector can be broadly classified into Fixed Line Telephonyand mobile telephony. The major players of the telecom sector are experiencing a fierce competition in both the segments. The major players like BSNL, MTNL, VSNL in the fixed line and Airtel, Hutch, Idea, Tata, Reliance in the mobile segment are coming up with new tariffs and discount schemes to gain the competitive advantage. 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.
Market
shares
of
public
and
Private
Players
Both fixed line and mobile segments serve the basic needs of local calls, long distance calls and the international calls, with the provision of broadband services in the fixed line segment and GPRS in the mobile arena. Traditional telephones have been replaced by the codeless and the wireless instruments. Mobile phone providers have also come up with GPRS-enabled multimedia messaging, Internet surfing, and mobile-commerce. The much-awaited 3G mobile technology is soon going to enter the Indian telecom market. The GSM, CDMA, WLL service providers are all upgrading themselves to provide 3G mobile services.
Along with improvement in telecom services, there is also an improvement in manufacturing. In the beginning, there were only the Siemens handsets in India but now a whole series of new handsets, such as Nokia's latest N-series, Sony Ericsson's W-series, Motorola's PDA phones, etc. have come up. Touch screen and advanced technological handsets are gaining popularity. Radio services have also been incorporated in the mobile handsets, along with other applications like high storage memory, multimedia applications, multimedia games, MP3 Players, video generators, Camera's, etc. The value added services provided by the mobile service operators contribute more than 10% of the total revenue.
The leading cellular service providers have the following number of subscribers:
Service Provider Reliance Tata Airtel MTNL BSNL Hutch Idea Spice BPL Aircel
No. of CDMA Subscribers 2.75 crores 1.07 crores
No. of GSM Subscribers 38.76 lakhs
3.37 crores 24.98 lakhs 2.44 crores 2.44 crores 1.3 crores 25.56 lakhs 10.62 lakhs 48 lakhs
Bharti Airtel has the largest customer base with 31% market share, followed by Hutch and BSNL with each holding 22% market share. The 2007 budget has brought further relief to the customers with the reduction in the tariffs, both local and long distance, and with slashing down the roaming rentals. This is likely to lead to even more people going for cellular services and more and more use of the value added services. However, landline telephony is likely to remain popular, too, in the foreseeable future. MTNL, the largest landline service provider, has recently taken some bold initiatives to retain its market share and, if possible, expand it.
he Indian telecommunications industry is one of the fastest growing in the world and India is projected to become the second largest telecom market globally by 2010. India added 113.26 million new customers in 2008, the largest globally. The country¶s cellular base witnessed close to 50 per cent growth in 2008, with an average 9.5 million customers added every month. According to the Telecom Regulatory Authority of India (TRAI), approximately 14.25 million telephone connections, including wireline and wireless, were added during July 2009, taking the total number of telecom subscriber base at the end of July 2009 to 479.07 million from 464.82 million a month before. According to Business Monitor International, India is currently adding 8-10 million mobile subscribers every month. It is estimated that by mid 2012, around half the country's population will own a mobile phone. This would translate into 612 million mobile subscribers, accounting for a tele-density of around 51 per cent by 2012. It is projected that the industry will generate revenues worth US$ 43 billion in 2009-10. Moreover, according to a study conducted by Nokia, the communications sector is expected to emerge as the single largest component of the country¶s GDP with 15.4 per cent by 2014. The Indian equipment market is estimated at US$ 24 billion in FY09. Finnish giant Nokia is the market leader, with over US$ 3.4 billion revenues last fiscal, followed by Ericsson at US$ 2.11 billion. Growth According to a Frost & Sullivan industry analyst, by 2012, fixed line revenues are expected to touch US$ 12.2 billion while mobile revenues will reach US$ 39.8 billion in India. India has become the second country in the world to have more than 100 million CDMA-based (code division multiple access) mobile phone subscribers after the US, which has 157 million CDMA users. Telecom operators on the popular GSM-based platform added 9.3 million subscribers in August 2009. India continues to be the world¶s fastest-growing mobile market and the total number of GSM users in the country has risen to 335.4 million as of August-end as per data released by the Cellular Operators¶ Association of India (COAI). Value-Added Services Market Currently, mobile value-added services (MVAS) in India accounts for 10 per cent of the operator's revenue, which is expected to reach 18 per cent by 2010. According to a study by Stanford University and consulting firm BDA, the Indian MVAS is poised to touch US$ 2.74 billion by 2010. Major Investments The booming domestic telecom market has been attracting huge amounts of investment which is likely to accelerate with the entry of new players and launch of new services.
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Norway-based telecom operator Telenor has bought a 60 per cent stake in Unitech Wireless for US$ 1.23 billion. BSNL, India's leading telecom company in revenue terms, will put in about US$ 1.16 billion in its WiMax project. Vodafone Essar will invest US$ 6 billion over the next three years in a bid to increase its mobile subscriber base from 40 million at present to over 100 million. Telecom operator Aircel, which launched GSM mobile services in Bangalore in February 2009, plans to invest US$ 220.58 million over the next year to set up base stations across the state. The American Tower Corporation (ATC) has made an offer to acquire Aircel¶s tower business, which has about 12,000 towers.
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Reliance Communications has signed a telecom infrastructure sharing agreement with S Tel, a new telecom operator. The deal, which covers telecom towers, transmission and fibre backbone, will be executed by RCom through its tower subsidiary, Reliance Infratel. Bharti Airtel will invest US$ 126.5 million to ramp up its networks in the Assam and Northeast circles in 2009-10. Etisalat DB Telecom India (erstwhile Swan Telecom) and Reliance Communications have entered into a long-term passive infrastructure sharing agreement worth over US$ 2.1 billion, spread over a period of ten years. Loop Mobile, formerly known as BPL Mobile plans to invest around US$ 75 million in its Mumbai operations.
Manufacturing India's telecom equipment manufacturing sector is set to become one of the largest globally by 2010. Mobile phone production is estimated to grow at a CAGR of 28.3 per cent from 2006 to 2011, totalling 107 million handsets by 2010. Revenues are estimated to grow at a CAGR of 26.6 per cent from 2006 to 2011, touching US$ 13.6 billion. Rural Telephony Rural India had 76.65 million fixed and Wireless in Local Loop (WLL) connections and 551,064 Village Public Telephones (VPT) as on September 2008. Therefore, 92 per cent of the villages in India have been covered by the VPTs. Universal Service Obligation (USO) subsidy support scheme is also being used for sharing wireless infrastructure in rural areas with around 18,000 towers by 2010. Policy Initiatives The government has taken many proactive initiatives to facilitate the rapid growth of the Indian telecom industry.
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100 per cent foreign direct investment (FDI) is permitted through the automatic route in telecom equipment manufacturing. FDI ceiling in telecom services has been raised to 74 per cent. Introduction of a unified access licensing regime for telecom services on a pan-India basis. Introduction of mobile number portability in a phased manner, starting in the fourth quarter of 2008. The government is implementing a program of connecting 66,822 uncovered villages under the Bharat Nirman programme. The government will invest US$ 2 billion to set up 112,000 community service centres in rural India to provide broadband connectivity in 2008-09. The Department of Telecommunications (DoT) has stated that foreign telecom companies can bid for 3G spectrum without partnering with Indian companies. Only after winning a bid, would they need to apply for unified access service licence (UASL) and partner with an Indian company in accordance with the FDI regulations.
The Road Ahead The target for the 11th Plan period (2007-12) is 600 million phone connections with an investment of US$ 73 billion. Apart from the basic telephone service, there is an enormous potential for various value-added services. In fact, the real potential for telecom service growth is still lying untapped. According to the CII Ernst & Young report titled 'India 2012: Telecom growth continues', revenue from India's telecom services industry is projected to reach US$ 54 billion in 2012, as against US$ 31 billion in 2008. Exchange rate used: 1 USD = 48.22 INR (as on July 2009) 1 USD = 48.82 INR (as on August 2009)
Indian Telecom Industry
At 110.01 million connections ' Indian Telecom Industry' is the fifth largest and fastest growing in the world. The subscriber base has grown by 40% in 2005 and is expected to reach 250 million in 2007. Over the last 3 years, two out of every three new telephone connections were wireless. Consequently, wireless now accounts for 54.6% of the total telephone subscriber base, as compared to only 40% in 2003. Wireless subscriber growth is expected to grow at 2.5 million new subscribers every month in 2007. The wireless subscriber base skyrocketed from 33.69 million in 2004 to 62.57 million in FY 2004 -2005. The wireless technologies currently in use ' Indian Telecom Industry ' are Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). There are primarily 9 GSM and 5 CDMA operators providing mobile services in 19 telecommunication circles and 4 metro cities, covering more than 2000 towns across the country. And the numbers are still growing for ' Indian Telecom Industry '. ' Telecom Industry in India ' is regulated by 'Telecom Regulatory Authority of India' (TRAI). It has earned good reputation for transparency and competence. Three types of players exists in ' Telecom Industry India ' community y y y
State owned companies like - BSNL and MTNL. Private Indian owned companies like - Reliance Infocomm and Tata Teleservices. Foreign invested companies like ± Hutchison-Essar, Bharti Tele-Ventures, Escotel, Idea Cellular, BPL Mobile, Spice Communications etc.
The ' Indian Telecom Industry ' services is not confined to basic telephone but it also extends to internet, broadband (both wireless and fixed), cable TV, SMS, IPTV, soft switches etc. The bottlenecks for ' Indian Telecom Industry ' are: Slow reform process. Low penetration. Service providers bears huge initial cost to make inroads and achieving break-even is difficult. Huge initial investments. Limited spectrum availability and interconnection charges between the private and state operators. The Government Broadband Policy 2004, aims at 9 million broadband connections and 18 million internet connections in 2007. ' Indian Telecom Industry ' is currently expected to contribute nearly 1% to India's GDP which is heartening and estimated to grow further and brighten the ' Scenario of Indian Telecom Industry '.
NEW DEL:HI, INDIA: GlobalLogic, AVP, Services, Bharat Bansal envisages the top trends that would impact the telecom industry in 2009 1. Equipment consolidation by putting more functionality at the edge of the network ± This will help in minimizing the hardware investments while maintaining highly scalable and flexible networks. For example, rather than purchasing and managing separate devices for edge routing, Ethernet aggregation and subscriber management, carriers are opting for multi-service devices that integrate various functionality into a single routing platform. We expect this trend will continue gaining momentum into next year. 2. Fourth Generation (4G) Technology ± R&D spending in 4G technology will happen, which will be able to deliver upto 100Mbps bandwidth with Quality of Service (QoS) and traffic prioritization. Hence, video conferencing using mobile will be possible. 3. Fixed Mobile Convergence (FMC) ± There will be deployments in FMC space leading to a smooth transfer between Fixed and Mobile networks, with rich user experience delivered at lower cost. Thus the gap between wireline and wireless networks will get bridged. 4. Telepresence service is used in video-conferences to give a realization that the participants are all in the same room by using life-sized people and superior voice quality. On the network side this means audio and video delivery using Service Level Agreements on performance guarantees need to be in place. It will save millions of dollar for the company travel cost as well as improve employee productivity besides reducing pollution levels. Hence, in future deeper penetration will happen in the market place with solutions becoming more affordable. 5. Security ± Security will continue to be emphasized in 2009 as internet based attacks will become more sophisticated and challenging as profit driven criminals will try to steal the confidential business and personal data. 6. Merger and Acquisition - With the continuation of global financial crisis hitting the carriers, the consolidation in the Telecom industry will keep on happening. This will result into mergers and acquisitions resulting in products consolidations. 7. Service Creation Environment (SCE) ± The demand for new services at a fraction of cost with quick to market will rise. Hence, the Service Creation Environment (SCE) will be used extensively and the engineers with this skill-set will be in demand. 8. MVAS services ± ARPU (average revenue per user) due to voice will continue to go down and thus the carriers will look for avenues to quickly add more mobile value added services (MVAS) to their portfolio. The new services will see a convergence of voice, data and video. 9. New markets ± As the service providers space gets crowded, the carriers will look for newer markets e.g. in India the carriers will continue their march towards the villages. 10. IPTV and DTH ± Quite some interest has been generated in the DTH segment in
the emerging markets like India. In the coming time, the consolidation of DTH will happen and interest in IPTV will rise, which will lead to Video on demand, interactive games etc.
Scope Of Telecom Industry
The telecom industry is growing at a great pace and the growth rate is expected to double with every passing year. There are many new developments in the telecomm sector, including the ingress of 3G technology that the Indian market is witnessing at present.
Public and Private Players
MTNL, BSNL, VSNL are the major Public Players, whereas Airtel, Idea, Hutch, Tata, Reliance, BPL are the leading Private Players in the country. Some of them are entering foreign markets as well. The Bharti Telecom will be launching its services for the NRIs in the US with the help of Airtel CALLHOME service.
The market shares of the leading public and Private Players
INVESTMENT 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. 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. The telecom sector in the country has already adopted the latest technological advancements to cater to the demands of the growing market. Telecom Expo India, Convergence India, VAS India and IPTV India being organized year to year are all efforts in this direction. 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. This has led to discontent on the part of the service providers. However, 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. Moreover, 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. Also, the telecom industry this year will be focusing more on rural areas to connect them with the urban areas so that the farmers and the small-scale industries can have faster access to information related to weather and market conditions. EMPLOYMENT STATUS With the coming of more and more projects, 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. Besides, there are ample opportunities for marketing people whose services are required to capture more and more customer base. The new projects, setting up of new service bases, expansion of coverage areas, network installations, maintenance, etc are providing more and more employment opportunities in the telecom sector.
The 2009 Telecom Industry Review summarizes current conditions across the global telecommunications industry, providing analysis of over a dozen infrastructure and service segments. From fundamental background issues to detailed five-year forecasts accompanied by practical strategic advice, this study provides a sweeping examination of the telecom marketplace.
The review provides up-to-date information in such key areas as high-speed access, VoIP, operations support systems, gateways, cable telephony, residential and business communications trends, and new opportunities such as fixed mobile convergence, various IP-based applications delivered as services, and IPTV. Whether you are an industry veteran or new to telecom, the 2009 Telecom Industry Review will serve as a frequently referenced yearbook, supplying hard data and sound analysis on pressing service and equipment issues. Concise, clear, and current, the review is a detailed strategic tool that amasses a year¶s worth of telecom researchover a dozen segments-into one comprehensive resource.
Future Trend Of Telecommunication Industry In India
Motivation The telecommunications industry is one of the fastest growing industries in India. It more than characterized the boom in the Indian economy. The teledensity in India grew at a rate from just about three for every 100 people in 2000 to reach 10.66 per 100 as of October 2005. This phenomenal growth in the telecommunication scenario can be attributed to the exponential growth of the wireless phones in the country. The Government has targeted to have subscriber base of 250 million phones by 2007, which would translate to a teledensity of 23 per 100 people. The major beneficiary of these policy initiatives has been the wireless market, which has spearheaded the telecom revolution in India and has continued to attract large investments. There is a lot made out for the 3G services. Should 3G services be introduced in India? Would that serve the purpose? The initial buzz is that 3 G services would give the always-on connectivity to the mobile owners. But ongoing war between 3G, 4G and WiMax will not make it easy for India to decide its future course. Objective of the Paper This paper will comprehensively cover the past, present and future of telecommunication industry in India. I will then follow up with in-depth operator analysis and their future anticipation and will attempt to gauge industry players¶ interest in 3G, 4G and WiMAX and understand their views, plans and concerns. We will compare these results and analyze the changes in market perception of WiMax and the implications that these changes have for operators. This report reassesses the viability of 3G, 4G and WiMax both regionally and globally, using indepth case studies of innovators in the field to examine what works, and what doesn¶t.
Goods and services. The telecommunications industry delivers voice communications, data, graphics, television, and video at ever increasing speeds and in an increasing number of ways. Whereas wireline telephone communication was once the primary service of the industry, wireless communication services, Internet service, and cable and satellite program distribution make up an increasing share of the industry. Industry organization. The largest sector of the telecommunications industry continues to be made up of wired telecommunications carriers. Establishments in this sector mainly provide telecommunications services via wires and cables that connect customers¶ premises to central offices maintained by telecommunications companies. The central offices contain switching equipment that routes content to its final destination or to another switching center that determines the most efficient route for the content to take. These companies also maintain the cable network that connects different regions of the country as well as foreign countries, and forms the backbone of the industry. While voice used to be the main type of data transmitted over the wires, wired telecommunications service now includes the transmission of all types of graphic, video, and electronic data mainly over the Internet. These new services are made possible through the use of digital technologies that provide much more efficient use of the telecommunications networks. One major technology breaks digital signals into packets during transmission. Networks of computerized switching equipment route the packets. Packets may take separate paths to their destination and may share the paths with packets from other users. At the destination, the packets are reassembled, and the transmission is completed. Because packet switching considers alternate routes, and allows multiple transmissions to share the same route, it results in a more efficient use of telecommunications capacity as packets are routed along less congested routes. The transmission of voice signals requires relatively small amounts of capacity on telecommunications networks. By contrast, the transmission of data, video, and graphics requires much higher capacity. This transmission capacity is referred to as ³bandwidth.´ As the demand increases for high-capacity transmissions²especially with the rising volume of Internet data²telecommunications companies have been expanding and upgrading their networks to increase the amount of available bandwidth. Cable and other program distribution is another sector of the telecommunications industry. Establishments in this sector provide television and other services on a subscription or fee basis. These establishments do not include cable networks. (Information on cable networks is included in the section on broadcasting, which appears elsewhere in the Career Guide.) Distributors of pay television services transmit programming through two basic types of systems. Cable systems transmit programs over fiber optic and coaxial cables. Direct broadcasting satellite (DBS) operators constitute a growing segment of the pay television industry. DBS operators transmit programming from orbiting satellites to customers¶ receivers, known as minidishes. Establishments in the cable and other program distribution industry generate revenue through subscriptions, providing Internet access, providing
phone service, and advertising sales. They also charge fees for pay-per-view or video-ondemand programs. Wireless telecommunications carriers, many of which are subsidiaries of the wired carriers, transmit voice, graphics, data, and Internet access through the transmission of signals over networks of radio towers. The signal is transmitted through an antenna into the wireline network. Increasing numbers of consumers are choosing to replace their home landline phones with wireless phones. Other wireless services include beeper and paging services. Resellers of telecommunications services are another sector of the telecommunications industry. These resellers lease transmission facilities, such as telephone lines or space on a satellite, from existing telecommunications networks, and then resell the service to other customers. Other sectors in the industry include message communications services such as e-mail and facsimile services, satellite telecommunications, and operators of other communication services ranging from radar stations to radio networks used by taxicab companies. Recent developments. Telecommunications carriers are expanding their bandwidth by replacing copper wires with fiber optic cable. Fiber optic cable, which transmits light signals along glass strands, permits faster, higher capacity transmissions than traditional copper wirelines. In some areas, carriers are extending fiber optic cable to residential customers, enabling them to offer cable television, video-on-demand, very high-speed Internet, and conventional telephone communications over a single line. However, the high cost of extending fiber to homes has slowed deployment. In most areas, wired carriers are instead leveraging existing copper lines that connect most residential customers with a central office, to provide digital subscriber lines (DSL) Internet service. Technologies in development will further boost the speeds and services available through a DSL connection. Changes in technology and regulation now allow cable television providers to compete directly with telephone companies. An important change has been the rapid increase in twoway communications capacity. Conventional pay television services provided communications only from the distributor to the customer. These services could not provide effective communications from the customer back to other points in the system due to signal interference and the limited capacity of conventional cable systems. Cable operators are implementing new technologies to reduce signal interference and increase the capacity of their distribution systems by installing fiber optic cables and improving data compression. This allows some pay television systems to offer two-way telecommunications services, such as video-on-demand and high-speed Internet access. Cable companies are increasing their share of the telephone communications market by using high-speed Internet access to provide VoIP (voice over Internet protocol). VoIP is sometimes called Internet telephony, because it uses the Internet to transmit phone calls. While conventional phone networks use packet switching to break up a call onto multiple shared lines between central offices, VoIP extends this process to the phone. A VoIP phone will break the conversation into digital packets and transmit those packets over a high-
speed Internet connection. Cable companies use the technology to offer phone services without building a conventional phone network. Wireline providers¶ high-speed Internet connections also can be used for VoIP and cellular phones are being developed that use VoIP to make calls using local wireless Internet connections. All of the major sectors of the telecommunications industry are or will increasingly use VoIP. Wireless telecommunications carriers are deploying several new technologies to allow faster data transmission and better Internet access that should make them more competitive with wireline carriers. With faster Internet connections speeds, wireless carriers are selling music, videos, and other exclusive content that can be downloaded and played on cellular phones. Wireless equipment companies are developing the next generation of technologies that will allow even faster data transmission. The replacement of landlines with cellular service should become increasingly common because advances in wireless systems will provide ever faster data transmission speeds.
Working Conditions
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Hours. The telecommunications industry offers steady, year-round employment. Workers in this industry are sometimes required to work overtime, especially during emergencies such as floods or hurricanes when employees may need to report to work with little notice. Work environment. Installation, maintenance, and repair occupations account for 1 in 4 telecommunications jobs. One of the largest occupations is telecommunications line installers and repairers, who work in a variety of places, both indoors and outdoors, and in all kinds of weather. Their work involves lifting, climbing, reaching, stooping, crouching, and crawling. They must work in high places such as rooftops and telephone poles, or below ground when working with buried lines. Their jobs bring them into proximity with electrical wires and circuits, so they must take precautions to avoid shocks. These workers must wear safety equipment when entering manholes, and test for the presence of gas before going underground. Telecommunications equipment installers and repairers, except line installers, generally work indoors²most often in a telecommunication company¶s central office or a customer¶s home or place of business. They may have to stand for long periods; climb ladders; and do some reaching, stooping, and light lifting. Following safety procedures is essential to guard against work injuries such as minor burns and electrical shock. Most communications equipment operators, such as telephone operators, work at video display terminals in pleasant, well-lighted, air-conditioned surroundings. The rapid pace of the job and close supervision may cause stress. Some workplaces have introduced innovative practices among their operators to reduce job-related stress.
Most other telecommunications managers, administrative workers, and professionals work 40-hour weeks in comfortable offices. Customer service representatives may work in call centers where they answer customer service calls²many during evening and weekend hours. In past years the number of disabling injuries in telephone communications, the principal sector of the telecommunications industry, has been well below the average for all industries.
doc_562932731.docx
Fixed-line Telephony
y y
Public Players Subscribers Private Players Subscribers
Mobile Telephony
y y
Public Players Subscribers Private Players Subscribers
Internet Investment
The Indian telecom sector can be broadly classified into Fixed Line Telephonyand mobile telephony. The major players of the telecom sector are experiencing a fierce competition in both the segments. The major players like BSNL, MTNL, VSNL in the fixed line and Airtel, Hutch, Idea, Tata, Reliance in the mobile segment are coming up with new tariffs and discount schemes to gain the competitive advantage. 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.
Market
shares
of
public
and
Private
Players
Both fixed line and mobile segments serve the basic needs of local calls, long distance calls and the international calls, with the provision of broadband services in the fixed line segment and GPRS in the mobile arena. Traditional telephones have been replaced by the codeless and the wireless instruments. Mobile phone providers have also come up with GPRS-enabled multimedia messaging, Internet surfing, and mobile-commerce. The much-awaited 3G mobile technology is soon going to enter the Indian telecom market. The GSM, CDMA, WLL service providers are all upgrading themselves to provide 3G mobile services.
Along with improvement in telecom services, there is also an improvement in manufacturing. In the beginning, there were only the Siemens handsets in India but now a whole series of new handsets, such as Nokia's latest N-series, Sony Ericsson's W-series, Motorola's PDA phones, etc. have come up. Touch screen and advanced technological handsets are gaining popularity. Radio services have also been incorporated in the mobile handsets, along with other applications like high storage memory, multimedia applications, multimedia games, MP3 Players, video generators, Camera's, etc. The value added services provided by the mobile service operators contribute more than 10% of the total revenue.
The leading cellular service providers have the following number of subscribers:
Service Provider Reliance Tata Airtel MTNL BSNL Hutch Idea Spice BPL Aircel
No. of CDMA Subscribers 2.75 crores 1.07 crores
No. of GSM Subscribers 38.76 lakhs
3.37 crores 24.98 lakhs 2.44 crores 2.44 crores 1.3 crores 25.56 lakhs 10.62 lakhs 48 lakhs
Bharti Airtel has the largest customer base with 31% market share, followed by Hutch and BSNL with each holding 22% market share. The 2007 budget has brought further relief to the customers with the reduction in the tariffs, both local and long distance, and with slashing down the roaming rentals. This is likely to lead to even more people going for cellular services and more and more use of the value added services. However, landline telephony is likely to remain popular, too, in the foreseeable future. MTNL, the largest landline service provider, has recently taken some bold initiatives to retain its market share and, if possible, expand it.
he Indian telecommunications industry is one of the fastest growing in the world and India is projected to become the second largest telecom market globally by 2010. India added 113.26 million new customers in 2008, the largest globally. The country¶s cellular base witnessed close to 50 per cent growth in 2008, with an average 9.5 million customers added every month. According to the Telecom Regulatory Authority of India (TRAI), approximately 14.25 million telephone connections, including wireline and wireless, were added during July 2009, taking the total number of telecom subscriber base at the end of July 2009 to 479.07 million from 464.82 million a month before. According to Business Monitor International, India is currently adding 8-10 million mobile subscribers every month. It is estimated that by mid 2012, around half the country's population will own a mobile phone. This would translate into 612 million mobile subscribers, accounting for a tele-density of around 51 per cent by 2012. It is projected that the industry will generate revenues worth US$ 43 billion in 2009-10. Moreover, according to a study conducted by Nokia, the communications sector is expected to emerge as the single largest component of the country¶s GDP with 15.4 per cent by 2014. The Indian equipment market is estimated at US$ 24 billion in FY09. Finnish giant Nokia is the market leader, with over US$ 3.4 billion revenues last fiscal, followed by Ericsson at US$ 2.11 billion. Growth According to a Frost & Sullivan industry analyst, by 2012, fixed line revenues are expected to touch US$ 12.2 billion while mobile revenues will reach US$ 39.8 billion in India. India has become the second country in the world to have more than 100 million CDMA-based (code division multiple access) mobile phone subscribers after the US, which has 157 million CDMA users. Telecom operators on the popular GSM-based platform added 9.3 million subscribers in August 2009. India continues to be the world¶s fastest-growing mobile market and the total number of GSM users in the country has risen to 335.4 million as of August-end as per data released by the Cellular Operators¶ Association of India (COAI). Value-Added Services Market Currently, mobile value-added services (MVAS) in India accounts for 10 per cent of the operator's revenue, which is expected to reach 18 per cent by 2010. According to a study by Stanford University and consulting firm BDA, the Indian MVAS is poised to touch US$ 2.74 billion by 2010. Major Investments The booming domestic telecom market has been attracting huge amounts of investment which is likely to accelerate with the entry of new players and launch of new services.
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Norway-based telecom operator Telenor has bought a 60 per cent stake in Unitech Wireless for US$ 1.23 billion. BSNL, India's leading telecom company in revenue terms, will put in about US$ 1.16 billion in its WiMax project. Vodafone Essar will invest US$ 6 billion over the next three years in a bid to increase its mobile subscriber base from 40 million at present to over 100 million. Telecom operator Aircel, which launched GSM mobile services in Bangalore in February 2009, plans to invest US$ 220.58 million over the next year to set up base stations across the state. The American Tower Corporation (ATC) has made an offer to acquire Aircel¶s tower business, which has about 12,000 towers.
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Reliance Communications has signed a telecom infrastructure sharing agreement with S Tel, a new telecom operator. The deal, which covers telecom towers, transmission and fibre backbone, will be executed by RCom through its tower subsidiary, Reliance Infratel. Bharti Airtel will invest US$ 126.5 million to ramp up its networks in the Assam and Northeast circles in 2009-10. Etisalat DB Telecom India (erstwhile Swan Telecom) and Reliance Communications have entered into a long-term passive infrastructure sharing agreement worth over US$ 2.1 billion, spread over a period of ten years. Loop Mobile, formerly known as BPL Mobile plans to invest around US$ 75 million in its Mumbai operations.
Manufacturing India's telecom equipment manufacturing sector is set to become one of the largest globally by 2010. Mobile phone production is estimated to grow at a CAGR of 28.3 per cent from 2006 to 2011, totalling 107 million handsets by 2010. Revenues are estimated to grow at a CAGR of 26.6 per cent from 2006 to 2011, touching US$ 13.6 billion. Rural Telephony Rural India had 76.65 million fixed and Wireless in Local Loop (WLL) connections and 551,064 Village Public Telephones (VPT) as on September 2008. Therefore, 92 per cent of the villages in India have been covered by the VPTs. Universal Service Obligation (USO) subsidy support scheme is also being used for sharing wireless infrastructure in rural areas with around 18,000 towers by 2010. Policy Initiatives The government has taken many proactive initiatives to facilitate the rapid growth of the Indian telecom industry.
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100 per cent foreign direct investment (FDI) is permitted through the automatic route in telecom equipment manufacturing. FDI ceiling in telecom services has been raised to 74 per cent. Introduction of a unified access licensing regime for telecom services on a pan-India basis. Introduction of mobile number portability in a phased manner, starting in the fourth quarter of 2008. The government is implementing a program of connecting 66,822 uncovered villages under the Bharat Nirman programme. The government will invest US$ 2 billion to set up 112,000 community service centres in rural India to provide broadband connectivity in 2008-09. The Department of Telecommunications (DoT) has stated that foreign telecom companies can bid for 3G spectrum without partnering with Indian companies. Only after winning a bid, would they need to apply for unified access service licence (UASL) and partner with an Indian company in accordance with the FDI regulations.
The Road Ahead The target for the 11th Plan period (2007-12) is 600 million phone connections with an investment of US$ 73 billion. Apart from the basic telephone service, there is an enormous potential for various value-added services. In fact, the real potential for telecom service growth is still lying untapped. According to the CII Ernst & Young report titled 'India 2012: Telecom growth continues', revenue from India's telecom services industry is projected to reach US$ 54 billion in 2012, as against US$ 31 billion in 2008. Exchange rate used: 1 USD = 48.22 INR (as on July 2009) 1 USD = 48.82 INR (as on August 2009)
Indian Telecom Industry
At 110.01 million connections ' Indian Telecom Industry' is the fifth largest and fastest growing in the world. The subscriber base has grown by 40% in 2005 and is expected to reach 250 million in 2007. Over the last 3 years, two out of every three new telephone connections were wireless. Consequently, wireless now accounts for 54.6% of the total telephone subscriber base, as compared to only 40% in 2003. Wireless subscriber growth is expected to grow at 2.5 million new subscribers every month in 2007. The wireless subscriber base skyrocketed from 33.69 million in 2004 to 62.57 million in FY 2004 -2005. The wireless technologies currently in use ' Indian Telecom Industry ' are Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). There are primarily 9 GSM and 5 CDMA operators providing mobile services in 19 telecommunication circles and 4 metro cities, covering more than 2000 towns across the country. And the numbers are still growing for ' Indian Telecom Industry '. ' Telecom Industry in India ' is regulated by 'Telecom Regulatory Authority of India' (TRAI). It has earned good reputation for transparency and competence. Three types of players exists in ' Telecom Industry India ' community y y y
State owned companies like - BSNL and MTNL. Private Indian owned companies like - Reliance Infocomm and Tata Teleservices. Foreign invested companies like ± Hutchison-Essar, Bharti Tele-Ventures, Escotel, Idea Cellular, BPL Mobile, Spice Communications etc.
The ' Indian Telecom Industry ' services is not confined to basic telephone but it also extends to internet, broadband (both wireless and fixed), cable TV, SMS, IPTV, soft switches etc. The bottlenecks for ' Indian Telecom Industry ' are: Slow reform process. Low penetration. Service providers bears huge initial cost to make inroads and achieving break-even is difficult. Huge initial investments. Limited spectrum availability and interconnection charges between the private and state operators. The Government Broadband Policy 2004, aims at 9 million broadband connections and 18 million internet connections in 2007. ' Indian Telecom Industry ' is currently expected to contribute nearly 1% to India's GDP which is heartening and estimated to grow further and brighten the ' Scenario of Indian Telecom Industry '.
NEW DEL:HI, INDIA: GlobalLogic, AVP, Services, Bharat Bansal envisages the top trends that would impact the telecom industry in 2009 1. Equipment consolidation by putting more functionality at the edge of the network ± This will help in minimizing the hardware investments while maintaining highly scalable and flexible networks. For example, rather than purchasing and managing separate devices for edge routing, Ethernet aggregation and subscriber management, carriers are opting for multi-service devices that integrate various functionality into a single routing platform. We expect this trend will continue gaining momentum into next year. 2. Fourth Generation (4G) Technology ± R&D spending in 4G technology will happen, which will be able to deliver upto 100Mbps bandwidth with Quality of Service (QoS) and traffic prioritization. Hence, video conferencing using mobile will be possible. 3. Fixed Mobile Convergence (FMC) ± There will be deployments in FMC space leading to a smooth transfer between Fixed and Mobile networks, with rich user experience delivered at lower cost. Thus the gap between wireline and wireless networks will get bridged. 4. Telepresence service is used in video-conferences to give a realization that the participants are all in the same room by using life-sized people and superior voice quality. On the network side this means audio and video delivery using Service Level Agreements on performance guarantees need to be in place. It will save millions of dollar for the company travel cost as well as improve employee productivity besides reducing pollution levels. Hence, in future deeper penetration will happen in the market place with solutions becoming more affordable. 5. Security ± Security will continue to be emphasized in 2009 as internet based attacks will become more sophisticated and challenging as profit driven criminals will try to steal the confidential business and personal data. 6. Merger and Acquisition - With the continuation of global financial crisis hitting the carriers, the consolidation in the Telecom industry will keep on happening. This will result into mergers and acquisitions resulting in products consolidations. 7. Service Creation Environment (SCE) ± The demand for new services at a fraction of cost with quick to market will rise. Hence, the Service Creation Environment (SCE) will be used extensively and the engineers with this skill-set will be in demand. 8. MVAS services ± ARPU (average revenue per user) due to voice will continue to go down and thus the carriers will look for avenues to quickly add more mobile value added services (MVAS) to their portfolio. The new services will see a convergence of voice, data and video. 9. New markets ± As the service providers space gets crowded, the carriers will look for newer markets e.g. in India the carriers will continue their march towards the villages. 10. IPTV and DTH ± Quite some interest has been generated in the DTH segment in
the emerging markets like India. In the coming time, the consolidation of DTH will happen and interest in IPTV will rise, which will lead to Video on demand, interactive games etc.
Scope Of Telecom Industry
The telecom industry is growing at a great pace and the growth rate is expected to double with every passing year. There are many new developments in the telecomm sector, including the ingress of 3G technology that the Indian market is witnessing at present.
Public and Private Players
MTNL, BSNL, VSNL are the major Public Players, whereas Airtel, Idea, Hutch, Tata, Reliance, BPL are the leading Private Players in the country. Some of them are entering foreign markets as well. The Bharti Telecom will be launching its services for the NRIs in the US with the help of Airtel CALLHOME service.
The market shares of the leading public and Private Players
INVESTMENT 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. 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. The telecom sector in the country has already adopted the latest technological advancements to cater to the demands of the growing market. Telecom Expo India, Convergence India, VAS India and IPTV India being organized year to year are all efforts in this direction. 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. This has led to discontent on the part of the service providers. However, 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. Moreover, 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. Also, the telecom industry this year will be focusing more on rural areas to connect them with the urban areas so that the farmers and the small-scale industries can have faster access to information related to weather and market conditions. EMPLOYMENT STATUS With the coming of more and more projects, 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. Besides, there are ample opportunities for marketing people whose services are required to capture more and more customer base. The new projects, setting up of new service bases, expansion of coverage areas, network installations, maintenance, etc are providing more and more employment opportunities in the telecom sector.
The 2009 Telecom Industry Review summarizes current conditions across the global telecommunications industry, providing analysis of over a dozen infrastructure and service segments. From fundamental background issues to detailed five-year forecasts accompanied by practical strategic advice, this study provides a sweeping examination of the telecom marketplace.
The review provides up-to-date information in such key areas as high-speed access, VoIP, operations support systems, gateways, cable telephony, residential and business communications trends, and new opportunities such as fixed mobile convergence, various IP-based applications delivered as services, and IPTV. Whether you are an industry veteran or new to telecom, the 2009 Telecom Industry Review will serve as a frequently referenced yearbook, supplying hard data and sound analysis on pressing service and equipment issues. Concise, clear, and current, the review is a detailed strategic tool that amasses a year¶s worth of telecom researchover a dozen segments-into one comprehensive resource.
Future Trend Of Telecommunication Industry In India
Motivation The telecommunications industry is one of the fastest growing industries in India. It more than characterized the boom in the Indian economy. The teledensity in India grew at a rate from just about three for every 100 people in 2000 to reach 10.66 per 100 as of October 2005. This phenomenal growth in the telecommunication scenario can be attributed to the exponential growth of the wireless phones in the country. The Government has targeted to have subscriber base of 250 million phones by 2007, which would translate to a teledensity of 23 per 100 people. The major beneficiary of these policy initiatives has been the wireless market, which has spearheaded the telecom revolution in India and has continued to attract large investments. There is a lot made out for the 3G services. Should 3G services be introduced in India? Would that serve the purpose? The initial buzz is that 3 G services would give the always-on connectivity to the mobile owners. But ongoing war between 3G, 4G and WiMax will not make it easy for India to decide its future course. Objective of the Paper This paper will comprehensively cover the past, present and future of telecommunication industry in India. I will then follow up with in-depth operator analysis and their future anticipation and will attempt to gauge industry players¶ interest in 3G, 4G and WiMAX and understand their views, plans and concerns. We will compare these results and analyze the changes in market perception of WiMax and the implications that these changes have for operators. This report reassesses the viability of 3G, 4G and WiMax both regionally and globally, using indepth case studies of innovators in the field to examine what works, and what doesn¶t.
Goods and services. The telecommunications industry delivers voice communications, data, graphics, television, and video at ever increasing speeds and in an increasing number of ways. Whereas wireline telephone communication was once the primary service of the industry, wireless communication services, Internet service, and cable and satellite program distribution make up an increasing share of the industry. Industry organization. The largest sector of the telecommunications industry continues to be made up of wired telecommunications carriers. Establishments in this sector mainly provide telecommunications services via wires and cables that connect customers¶ premises to central offices maintained by telecommunications companies. The central offices contain switching equipment that routes content to its final destination or to another switching center that determines the most efficient route for the content to take. These companies also maintain the cable network that connects different regions of the country as well as foreign countries, and forms the backbone of the industry. While voice used to be the main type of data transmitted over the wires, wired telecommunications service now includes the transmission of all types of graphic, video, and electronic data mainly over the Internet. These new services are made possible through the use of digital technologies that provide much more efficient use of the telecommunications networks. One major technology breaks digital signals into packets during transmission. Networks of computerized switching equipment route the packets. Packets may take separate paths to their destination and may share the paths with packets from other users. At the destination, the packets are reassembled, and the transmission is completed. Because packet switching considers alternate routes, and allows multiple transmissions to share the same route, it results in a more efficient use of telecommunications capacity as packets are routed along less congested routes. The transmission of voice signals requires relatively small amounts of capacity on telecommunications networks. By contrast, the transmission of data, video, and graphics requires much higher capacity. This transmission capacity is referred to as ³bandwidth.´ As the demand increases for high-capacity transmissions²especially with the rising volume of Internet data²telecommunications companies have been expanding and upgrading their networks to increase the amount of available bandwidth. Cable and other program distribution is another sector of the telecommunications industry. Establishments in this sector provide television and other services on a subscription or fee basis. These establishments do not include cable networks. (Information on cable networks is included in the section on broadcasting, which appears elsewhere in the Career Guide.) Distributors of pay television services transmit programming through two basic types of systems. Cable systems transmit programs over fiber optic and coaxial cables. Direct broadcasting satellite (DBS) operators constitute a growing segment of the pay television industry. DBS operators transmit programming from orbiting satellites to customers¶ receivers, known as minidishes. Establishments in the cable and other program distribution industry generate revenue through subscriptions, providing Internet access, providing
phone service, and advertising sales. They also charge fees for pay-per-view or video-ondemand programs. Wireless telecommunications carriers, many of which are subsidiaries of the wired carriers, transmit voice, graphics, data, and Internet access through the transmission of signals over networks of radio towers. The signal is transmitted through an antenna into the wireline network. Increasing numbers of consumers are choosing to replace their home landline phones with wireless phones. Other wireless services include beeper and paging services. Resellers of telecommunications services are another sector of the telecommunications industry. These resellers lease transmission facilities, such as telephone lines or space on a satellite, from existing telecommunications networks, and then resell the service to other customers. Other sectors in the industry include message communications services such as e-mail and facsimile services, satellite telecommunications, and operators of other communication services ranging from radar stations to radio networks used by taxicab companies. Recent developments. Telecommunications carriers are expanding their bandwidth by replacing copper wires with fiber optic cable. Fiber optic cable, which transmits light signals along glass strands, permits faster, higher capacity transmissions than traditional copper wirelines. In some areas, carriers are extending fiber optic cable to residential customers, enabling them to offer cable television, video-on-demand, very high-speed Internet, and conventional telephone communications over a single line. However, the high cost of extending fiber to homes has slowed deployment. In most areas, wired carriers are instead leveraging existing copper lines that connect most residential customers with a central office, to provide digital subscriber lines (DSL) Internet service. Technologies in development will further boost the speeds and services available through a DSL connection. Changes in technology and regulation now allow cable television providers to compete directly with telephone companies. An important change has been the rapid increase in twoway communications capacity. Conventional pay television services provided communications only from the distributor to the customer. These services could not provide effective communications from the customer back to other points in the system due to signal interference and the limited capacity of conventional cable systems. Cable operators are implementing new technologies to reduce signal interference and increase the capacity of their distribution systems by installing fiber optic cables and improving data compression. This allows some pay television systems to offer two-way telecommunications services, such as video-on-demand and high-speed Internet access. Cable companies are increasing their share of the telephone communications market by using high-speed Internet access to provide VoIP (voice over Internet protocol). VoIP is sometimes called Internet telephony, because it uses the Internet to transmit phone calls. While conventional phone networks use packet switching to break up a call onto multiple shared lines between central offices, VoIP extends this process to the phone. A VoIP phone will break the conversation into digital packets and transmit those packets over a high-
speed Internet connection. Cable companies use the technology to offer phone services without building a conventional phone network. Wireline providers¶ high-speed Internet connections also can be used for VoIP and cellular phones are being developed that use VoIP to make calls using local wireless Internet connections. All of the major sectors of the telecommunications industry are or will increasingly use VoIP. Wireless telecommunications carriers are deploying several new technologies to allow faster data transmission and better Internet access that should make them more competitive with wireline carriers. With faster Internet connections speeds, wireless carriers are selling music, videos, and other exclusive content that can be downloaded and played on cellular phones. Wireless equipment companies are developing the next generation of technologies that will allow even faster data transmission. The replacement of landlines with cellular service should become increasingly common because advances in wireless systems will provide ever faster data transmission speeds.
Working Conditions
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Hours. The telecommunications industry offers steady, year-round employment. Workers in this industry are sometimes required to work overtime, especially during emergencies such as floods or hurricanes when employees may need to report to work with little notice. Work environment. Installation, maintenance, and repair occupations account for 1 in 4 telecommunications jobs. One of the largest occupations is telecommunications line installers and repairers, who work in a variety of places, both indoors and outdoors, and in all kinds of weather. Their work involves lifting, climbing, reaching, stooping, crouching, and crawling. They must work in high places such as rooftops and telephone poles, or below ground when working with buried lines. Their jobs bring them into proximity with electrical wires and circuits, so they must take precautions to avoid shocks. These workers must wear safety equipment when entering manholes, and test for the presence of gas before going underground. Telecommunications equipment installers and repairers, except line installers, generally work indoors²most often in a telecommunication company¶s central office or a customer¶s home or place of business. They may have to stand for long periods; climb ladders; and do some reaching, stooping, and light lifting. Following safety procedures is essential to guard against work injuries such as minor burns and electrical shock. Most communications equipment operators, such as telephone operators, work at video display terminals in pleasant, well-lighted, air-conditioned surroundings. The rapid pace of the job and close supervision may cause stress. Some workplaces have introduced innovative practices among their operators to reduce job-related stress.
Most other telecommunications managers, administrative workers, and professionals work 40-hour weeks in comfortable offices. Customer service representatives may work in call centers where they answer customer service calls²many during evening and weekend hours. In past years the number of disabling injuries in telephone communications, the principal sector of the telecommunications industry, has been well below the average for all industries.
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