LITERATURE REVIEW

There are five private service operators in each area, and an incumbent state operator.

Almost 80% of the cellular subscriber base belongs to the pre-paid segment.

The DOT has allowed cellular companies to buy rivals within the same operating circle

provided their combined market share did not exceed 67 per cent. Previously, they were

only allowed to buy companies outside their circle.

Growth Drivers

Opening up of international and domestic long distance telephony services are growth

drivers in the industry. Cellular operators now get substantial revenue from these

services, and compensate them for reduction in tariffs on air time, which along with

rental was the main source of revenue. The reduction in tariffs for airtime, national long

distance, international long distance, and handset prices has driven demand.

The Key players in the Telecom Market in India

Cellular Service provider:

1. BSNL

2. Airtel

3. Vodafone

4. Idea
5. Reliance

6. Tata Indicom

7. Aircel

8. Spice

9. MTNL

1.3 THE INDIAN MOBILE MARKET

The cellular and fixed-line penetration levels in India are lower than those in most

developed countries in the world. Compounded annual growth of cellular subscribers in

the FY97 - FY01 period was 80%. Despite that, the market is still under-penetrated and

offers significant potential for growth. The Indian mobile market, according to the COAI,

increased from approximately 29.21 million subscribers as of March 31, 2004 to

approximately 51.40 million subscribers as on June 30, 2008. Despite this rapid growth,

the mobile penetration rate in India, approximately 7.8% as of June 30, 2008, is

significantly lower than the average mobile penetration rate in other Asian and

International markets.

The cellular subscribers grew to approximately 31 million in 2008. The number of mobile

subscribers in India showed rapid growth. By 2009 it is projected at 68 million by COAI

and 60 million by Gartner. This shows the potential of the telecom industry over the next

four years. There was a lot of action in the cellular field with respect to mergers and

acquisitions. The sector had the operators consolidate their positions with acquisition and

increased competition.

The cellular phone sends and receives radio single to and from the nearest cell
Site, the Base Transceiver Station (BTS), which is connected to the Mobile Switching

Center (MSC). The MSC is connected to the conventional local phone network. The use

Of radio waves, as the communication line, eliminates the use of wires that tie down to

one point. As long as you are in the cellular service area, whether you are moving or

Stationary you remain connected with the service provider of your cellular services.

When you subscribe to cellular phone services you are provided with a SIM Card

(Subscriber’s Identity Module). The SIM Card is about the size of a regular Bank Credit

Card with a microchip, which stores your cellular number and other subscriber’s

information. In the field of cellular telephony, mainly four technique are used which are

G.S.M., C.D.M.A., W.L.L, M.P.S./Cellular business based on GSM and P.D.C.S.

Technology is spread all over the world, i.e., the cellular services are on air in more than

200 countries, totaling close to 530 million subscribers.

Different operators allow assessing of different type of GSM networks. There are

essentially three types of GSM networks - GSM900, GSM1800 and GSM1900. GSM

stands for Global System for Mobile communication. It lays down the common standard

for mobile telephone, which allows the subscriber to use their handsets, at any place,

which has GSM coverage. GSM is the PAN European standard for digital cellular

telephone services. It is world’s fastest growing mobile communication standard. GSM

was designed for European market to provide the advantage of automatic, international

roaming in multiple countries. GSM system has already been implemented in Asia,

Africa, European countries etc.

Being a digital technology GSM provides crystal clear sound, fewer drop cells, excellent

transmission quality and mobility not only in India but even when you are traveling

abroad. The SIM card is vital component in GSM operation. The user can store all

relevant data in the phone on a removable plastic care. The card can be plugged onto any

GSM compatible phone and the phone is instantly personalized for the user.