PROJECT ON TELECOM SECTOR

OF INDIA

 VISHWA VISHWANI INSTITUTE OF SYSTEMS &

MANAGEMENT

GROUP MEMBERS ARE-

Basanta Kumar Padhan
Satyajit Paul
Shailendra Shrivastava
Mukesh Kumar Bhatta

Rabi Kumar Sadija

INTRODUCTION OF TELECOM
INDUSTRY
 History -India’s telecom renaissance has
been remarkable. After 44 years of
government monopoly, market
liberalization introduced in 1991 has led to
a 7-fold increase in the number of phones
in just 12 years.
 The mobile market recently topped 31
million customers.
 India is one of the fastest growing telecom
markets with an average annual growth of
about 22% for basic telephony and over
100% for cellular and Internet services.
History of telecommunication
 India requires investments of at least $37 billion by 2005
and $69 billion by 2010.
 Year-1851 First operational land lines were laid by the
government near Calcutta (seat of British power)
  Year-1881 Telephone service introduced in India
 Year -1923 Formation of Indian Radio Telegraph Company
(IRT)
  Year -1947 Nationalization of all foreign
telecommunication companies to form the Posts,
Telephone and Telegraph (PTT), a monopoly run by the
government's Ministry of Communications
 Year -1997 Telecom Regulatory Authority of India created
 Year -1999 Cellular Services are launched in India. New
National Telecom Policy is adopted.
  Year -2000 Do not becomes a corporation, BSNL
Major Players

 There are three types of players in telecom

services:
 • -State owned companies (BSNL and
MTNL)
 • -Private Indian owned companies
(Reliance Infocomm, Tata Teleservices,)
 • -Foreign invested companies (Hutchison-
Essar, Bharti Tele-Ventures,
 Escotel, Idea Cellular, BPL Mobile, Spice
Communications)
Introduction of major players
 BSNL
 BHARTI
 MTNL
 RELIANCE INFOCOMM
 TATA TELESERVICES
 VSNL
 HUTCH
 IDEA
 
MARKET SHARE OF PLAYER IN TELECOM SERVICE
Regulatory Control
 Entry of private service providers in 1992
brought the need for independent
regulation.
 Telecom Regulatory Authority of India(TRAI)
was established from 20February 1997 to
regulate telecom services & tariffs fixation.
 Telecommunications Dispute Settlement
and Appellate Tribunal(TDSAT) was
established from 24January 2000 to settle
disputes between a licensor and a licensee,
service providers, service provider and a
consumer.
Recent Policy Changes
 Restructuring the sector.
 Increased the investment.
 Technology development and transfer
 Service provision.
Major Market Trends
v Telecom trends in India have a great
impact on the
PC,internet,broadband,Cable,handset
features.
v An average of 4million subscribers added
every month for the past 6 months.
v The wireless subscriber base has increased
75percent from 2002 to 2007.
v 18 percent of mobile users are willing to
change their handsets every year.
 Mergers

Demand for new spectrum as the industry

grows and the fact the spectrum
allocation is done on the basis of
number of subscribers will force
companies to merge so as to claim large
no . Of subscribers to gain more
spectrum as a precursor to the launch of
larger and expanded services.
EQUIPMENT MARKET
EQUIPMENT OF TELECOM INDUSTRIES IN INDIA
TOP 10 INDIAN TELECOM PROVIDER IN INDIA
 Telecom Market in India : 2002-07

Million
Units
Mobile Phones

• Annual subscriber base growth 44%; 2007-08: subscriber expected to cross 250 mn
• 2006-07: Base Stations installed: 100,000; Annual growth: 55%
• 2006-07: Towers installed: 100,000; Annual growth: 60%

14
Dept. of Telecom 26 November 2006 15
Key Policy Initiatives/milestones
 New Economic Policy (1991)
› Opening up of Telecom service sector
(Mobile –metros)
 National Telecom Policy 1994
› Telecom, key for development
› Inadequacy of public resource to meet
demand
› Private sector to supplement Govt.
› Provide world class telecom service at
affordable cost

Dept. of Telecom 26 November 2006 16

Key Policy initiatives
(contd..)
 Establishment of TRAI (1997)
 New Telecom Policy (NTP 99)
› Transition from fixed license fee to
revenue share
› Introduction of free competition
› Technology neutral licenses
› Tariff rebalancing
 Creation of BSNL (2000)
 Establishment of TDSAT (2000)

17
Key Policy initiatives (contd..)
 Opening of National & International
long distance
 Launching of mobile service by
BSNL (2002)
 Establishment of USO Fund
 Broadband policy (2004)

Dept. of Telecom 26 November 2006 18

KEY FACTOR OF TELECOM
GROTH IN INDIA
q Telecom industry is growing at a scorching
pace in the recent years.
q It is due to the following reasons
3. We have moved from an environment that
was monopolized. by state own company.
4. Intense competition among several player.
5. Wireless revolution is taking place in country.
6. Global economics is growing.
7. Another key role is implementation of
customer greater control over telecom costs.
(CPP REGIME)
NEW STEPS FOR TELECOM
1. Foreign Direct Investment of up to 100 percent permitted for the
following:
 Manufacturing of telecom equipment
 Internet service (not providing international gateways)
 Infrastructure providers (Category I)
 E-mail service
 Voice mail service
 Call Centers and IT enabled services

2. Foreign Direct Investment of up to 74 percent permitted for the following:

 Internet service (providing international gateways)
 Infrastructure providers (Category II)
 Radio paging services
 
NEW STEPS FOR TELECOM
 

q 5. Automatic approval for technology fee up to US$ 2

million, royalty up to 5 percent for domestic sales and 8
percent for exports in telecom manufacturing (higher
amount through specific approvals)
 
q 6. Full reparability of dividend income and capital invested in the
telecom sector
 
q 7. Fiscal incentives and concessions for the telecom sector:
 Amortization of license fee
 Tax holiday
 Rebate on subscription to shares/debentures
 Scope for tax exemption on financing through venture capital
 Import duty rates reduced for various telecom equipment
 
 T K
H ON TELECOM
PROJECT N "U"
A
BA SAN TA K UMAR
PADHA N
SA T YA JI T PAUL
SH AILENDRA
SH RI VAST AVA
RABI KUMA R
SA DIJA
JY OTI RAN JA N
JENA