Sample Questions Describe the evolution of market structure in Basic Telecom Services, and Cellular Services in India..

Basic Telecom Services: Under monopoly operator BSNL (DoT) and MTNL (Delhi and Mumbai) until 1996; NTP 94 allowed second private operator; 6 circles were picked up by private basic operators and started service from 1996. NTP 99 allowed unrestricted number of players. The licenses were auctioned; Reliance picked up about 18 circles followed by Bharti and Tata Teleservices. Basic service providers were allowed by the government (DoT) to provide Wireless Local Loop based limited mobility recently. Cellular Services: The operating areas are divided in to 4 metros and 18 circles. Started operation with two operators in Metros in 1995. The remaining circles witnessed cellular services from 1996. NTP 99 allowed oligopoly in cellular service. BSNL and MTNL were given license to be the third operator in 2000. The fourth cellular licenses were auctioned in 2001. Bharti picked up the largest number of licenses followed by BaTaTa (now called Idea), Hutchison, and Escotel. Discuss the market structure, players, licensing conditions and policies applicable to Infrastructure Providers (IP) segments of the telecom industry. Infrastructure Providers (IPs):

Created as per NTP 99: allowing the use of existing backbone network of public and private power transmission companies, railways,GAIL, ONGC, etc, to be allowed for national long distance voice and data transmission. 14 companies got their Infrastructure Provider (IP) licenses. IP-I allows leasing/renting of assets such as OFC, towers, RoW to be leased/rented; IP-II allows bandwidth to be leased/rented. GAIL, PGCIL, Railways are main companies which have got IP-II license. GAIL RoW along pipelines; Railways RoW along tracks; PGCIL RoW along transmission towers. License fee is minimal. Discuss the market structure, players, licensing conditions and policies applicable to Cellular Mobile Service Providers and National Long Distance operators in India.

Cellular Mobile Service Providers: started as duopoly in 1995; introduction of BSNL/MTNL as 3rd operator in 2000 and the fourth operator in 2001; licenses given as auction; companies bid very high; changed from fixed license fee to revenue sharing in 1999; forced to use GSM

in the first round of licensing; left to choose any technology for the 4th operator; major players: Bharti, Hutch, Idea, BSNL and MTNL; niche operators in certain circles: Aircel, Spice; metros and category A circles contribute to about 35% each of subscriber base; category C circles with low (5%) penetration; prices are market driven and have decreased from Rs. 16/ minute in 1995 to about Re.1/ minute today; technology started as 2G; subsequently upgraded to 2.5G; 3G is under discussion by the regulator. National Long Distance Operators: provided by BSNL as a monopoly service until 2001; opened up for competition due to NTP 99; Bharti, Reliance, and Tata (through VSNL) are the major players; paid Rs. 100 crores as entry fee; mandatory to carry the inter-circle calls; can also carry intra-circle calls in arrangement with the basic and mobile service providers; carrier access code does not exist and hence consumer does not have much choice in choosing the NLD operators; need to get their share of revenue from access providers for carriage of calls; interconnect charges are determined by TRAI guidelines.