Telecom Industry and Communication Technology
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Indian Institute of Management Rohtak [pic 1] Telecom Industry and Communication TechnologyPart – A Submitted to: Submitted by: Prof Sujit Kumar Group 10 Aleeva Goyari Ankush Verma Hrangbung AnalJeevan Rathod Shankul Mishra Sagar RatheeIntroductionThe rapidly growing telecommunication sector in India has emerged as the world’s second largest telecommunications market. With a subscriber base of 1.20 billion, the telecom industry has substantially become a strong contributor to India’s overall GDP and is expected to grow further. The Indian Telecom industry has undergone significant changes over the past three decades, owing to the liberal and reformist policies of the Government of India along with the strong consumer demand in the rapid growth in the telecom sector. The deregulation of Foreign Direct Investment (FDI) norms as well as technology played an important role in phenomenal growth of the sector in the country which reflects the success of the Government initiatives.HistoryStarted in 1851, Indian telecom industry marked its beginning in Calcutta when the Government laid the first operational lines. In 1881 telephones services were introduced which was then merged with the postal system in 1883. Post-independence, all foreign telecommunications companies were nationalized to form the Post, Telephone and Telegraph (PTT), a monopoly run by the Government of India, under Ministry of Communications. It was then decided to consider Indian Telecom Sector to be consider as a strategic service and bring it under the roof of the state’s control. The first wind of telecom sector began to flow in 1980 when the private sector was allowed in manufacturing telecom equipment’s.The year 1985 saw the establishment of Department of Telecommunications (DoT) which was the solo domestic and long-distance service. Videsh Sanchar Nigam Limited (VSNL) and Bharat Sanchar Nagar Limited (BSNL) were the two wholly owned Government companies. The first reform came about in 1994 when the sector began a transition from a monopoly to a competitive structure. During this period, National telecom Policy (NTP) was formulated which was a first attempt to transition to a competitive market-based structure. In 1997 Telecom Regulatory Authority of India (TRAI) was created to act as a regulator to facilitate the growth of the telecom sector.
Evolution of Telecom Industry1851First operational landlines laid between Calcutta and Diamond Harbour1881Introduction of telephone service in India1923Formation of Indian Radio Telegraph Company1985DOT was setup to provide domestic and long-distance telephone services1986Establishment of MTNL and VSNL1992Private players allowed in VAS1994Government announced National Telecom Policy1995Cellular service was commercially launched in India1997Creation of Telecom Regulatory Authority1999New Telecom Policy was launched (NTP 1999) which led to migration from high cost fixed license fee to low cost revenue sharing regime2000Amendments made to TRAI Act2002Subscriber linked spectrum allotment procedure was introduced2003Introduction of Internet and GPRS2004Broadband policy 2004 was formulated2005Attempt to boost rural telephonyFDI limit changed from 49 to 74 percent2006Number portability proposed2007Decision on 3G services2008Discussions on 3G spectrum bid process2009Mobile subscribers in India crossed 500 million mark2010Completed the auction of 3G and BWA spectrumTable 1. Source: bsnl.co.inMarket Overview The telecom sector continues to be one of the India’s biggest success industry and also witnessed unparalleled growth built on wireless revolution by global standards.Gross Revenue of the Indian telecom industry is 40265.12 crores during 2010 and are expected to grow with a CAGR of 10.88% over next decade.In 2010 the EBITDA margin is 13.95% and OPEX ratio is 86.05%The total telecom subscribers in India is 65.39 crores in 2010. Below is market share and subscribers base of service providers (all India) in 2010.S.NoService ProvidersSubscribersMarket Share in %1Bharati Airtel12,76,19,31421.842RCom10,24,22,14517.533Vodafone10,08,58,35817.264BSNL6,94,50,01211.895Tata6,59,42,25511.296Idea6,38,24,68810.927Aircel3,68,61,1746.318Others1,73,45,4562.97