The telecom industry in India has grown rapidly since the late 1990s with liberalization and reforms introducing competition. Key events included splitting telecom from posts in 1985, opening to competition in 1994, and establishing the regulatory authority TRAI in 1997. Subscriber growth has been exponential, reaching over 900 million by 2013. Major players include Bharti Airtel, Vodafone, Idea, Reliance, and BSNL. Industry metrics like ARPU, MOU, and ARPM have been trending downward in recent years due to intense competition. Future growth is expected from increased usage of data services and value-added services on smartphones as penetration increases in rural areas. Consolidation in the industry is anticipated

1. 2nd June, 2012
11 a.m. to 12 p.m.

2. HISTORY
Until the 1980s, under the Department of Posts and Telegraphs
In 1985, the Department of Posts and Telegraph was split up into the
Department of Telecommunications (DoT) and the Department of Posts.
On May 13, 1994, the government opened local basic and value-added
telecommunications services to competition.
Mobile services were introduced on a commercial basis in November 1994
India was divided into 21 "Telecom Circles".
In 1997, the Telecom Regulatory Authority of India (TRAI) was set up

3. LIBERALIZATION,
REFORMS AND
COMPETITION
Massive investments and explosion in supply
The telecom policy of 1999 envisaged a tele-density
of 15 % by the year 2010.
Over the past 10 years, India has registered the
fastest growth (~ 30% CAGR)

4. TELE-DENSITY: S-
CURVE
90
84
80 78.66
70 70.5
60
52.8
50
40
37
30
26.2
20
18.2
12.8
10 8.95
7.1
3.5 4.3 5.1
0
Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13E

5. PRESENT
More than 900 million telecom subscribers
Second largest telecom network in the world
22 Telecom Circles
15 Service providers
Pan India 3G Service
4G Service in selected Cities
Lowest mobile tariff in the world
Mobile Number Portability
Free Roaming
Overall tele-density: 78.7 (urban teledensity is 168.84 and rural
teledensity is 38.04.

6. KEY PLAYERS
Bharti Airtel
Vodafone
BSNL/MTNL
Reliance Comunication (ADAG Group)
Idea Celuler (Aditya Birla Group)
Tata Communication
Uninor
Aircel

7. SUBSCRIBER MARKET
SHARE
TATA Others Bharti
Teleservi 15% Airtel
ces 20%
9%
Idea RCOM
12% 17%
BSNL+MT Vodafone
NL 16%
11%

8. KEY PERFORMANCE
INDICATORS
Total Subscriber Base
Average Revenue Per User (ARPU)
Minutes of Usage (MOU)
Average Revenue Per Minute (ARPM)

9. SUBSCRIBER BASE
Total number of wireless subscribers
200,000
180,000
160,000
140,000
120,000
100,000 Bharti
Vodafone Essar
80,000
RCOM
60,000 Idea
40,000
20,000
0

10. ARPU
ARPU (Rs.)
300
250
200
Bharti
150 Vodafone
RCOM
Idea
100
50
0
Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q2FY11 Q3FY11 Q4FY11 Q1FY12 Q2FY12 Q3FY12 Q4FY12

11. MOU
MOU (Minutes/subscriber)
600
500
400
300 Bharti
Vodafone Essar
RCOM
200
Idea
100
0

12. ARPM
ARPM (paise)
60
55
50
Bharti
Vodafone Essar
RCOM
45
Idea
40
35
Q1FY10Q2FY10Q3FY10Q4FY10Q1FY11Q2FY11Q3FY11Q4FY11Q1FY12Q2FY12Q3FY12Q4FY12

13. WHO IS THE STAR OF
THE SECTOR?
Financial Performance
Financial Discipline
Debt Sustainability
User Base
Brand Power

14. CONCERNS
Excess Competition/ Very Low Tariffs
Stagnating Voice Revenue/Falling ARPUs
Huge Investment Requirement
Heavy Debt Burden
Regulatory Interference
High Spectrum Pricing
Lower Subscriber Additions

15. FUTURE GROWTH
DRIVERS
Value Added Services
Rising expenditure on communication activities
Smart Phones
Heavy Data Usage (3G/4G)
Rising Rural Service Penetration
Share of the working age population (15-58 years) in total
population will grow from the current 55%to about 65%

16. VAS
Currently account for only 10% of revenue (Expected to be
30-40% by 2017)
~50% OPM
Rs.158 bn in 2012 to Rs.500 bn by 2015
Data Consumption (~ 60% of revenue)
Mobile banking, mobile education, basic governance
services, health information services, agriculture and
entertainment

17. WHAT TO EXPECT
GOING AHEAD?
Underperformance to continue due to policy standstills
Margins will stabilize
Consolidation

18. THANK YOU