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  • Key Facts and Figures
    • Fifth largest network in the world, global standards
    • Contributor of 2% of India’s GDP
    • Second largest in the emerging economies of Asia( more than a 110 million subscribers)
    • 40% growth in subscriber base in 2005, expected to reach 280 million by end of 2008
    • Wireless subscriber growth aims to surpass 2.5 million subscribers by 2008
    • Industrial output growth slipped to 8.6% in 2008 as compared to 11.6% in 2006-07
  • Key Facts and Figures ( contd )
    • Currently used wireless Technologies ( CDMA and GSM )
    • Increased Indian tele-density to 12
    • Current Value of the Indian Telecom Market- $100b
    • Market leaders: Bharti Airtel ( 27% ) and Reliance Communications( 20% )
    • Projected to reach $54b in 2012 as compared to $31B in 2008
  • Major Players
  • Bharat Sanchar Nigam Limited( BSNL)
    • India’s largest telecommunications company with largest public sector undertaking
    • Expanded its network in line with the tenth Five year plan ( 1992-97 )
    • Planning to overtake Bharati as the largest operator of GSM
    • 23% of the entire subscriber base in the internet market
    • Embracing mobile technology in a big way
    • 4 million subscribers added every month in the past six months
    • Wireless subscriber base has increased 75% CAGR from 2001 to 2007 as compared to negligible wire line growth
    • 18% of the mobile users willing to change their mobile handsets
    • Great prospect for value added services.
    • Issues pertaining to bith 2G and 3G markets needs to be evolved
  • Comparative Market shares( GSM )
    • Airtel ,a market share with 32.16% GSM market share
    • Vodafone , closely behind with 22% of the market share
    • BSNL , Third place 18.79% market share
    • Idea, 12.45% market share
    • Aircel , 5.51% market share
  • Segmental Performance
    • Telephone Segment:
      • Wireless subscriber base experiencing strong growth, added 95.96m subscribers in FY08
      • Bharti airtel, Reliance, Vodafone, Idea, BSNL, tata tele services in decreasing order
    • GSM
      • Subscriber base reached 192.70M in the quarter ending March 2008( growth of 11.89% )
      • Bharti remains the biggest GSM operator, followed by Vodafone ( 44.13M ),BSNL ( 36.21M ), Idea ( 21M )
  • Segmental Performance( contd )
  • Segmental Performance( contd )
  • Segmental Performance( contd )
  • Segmental Performance( contd ) Market share of Top 5 ISP ISP Subscriber base share in % BSNL 5640191 50.82 MTNL 1899747 17.12 Bharti Airtel Ltd. 815360 7.35 Reliance Communications ltd 696440 6.28 sify technologies 576047 5.19
  • Inter-Firm Comparison
    • Telecom service providers
      • Operational Performance
        • In terms of Sale value, Airtel is the market leader ( 52.39% growth )
        • MTNL showed decline of sales
        • Tata teleservices and tata communications showed considerable growth ( 21.47% and 9.10% respectively )
    • Telecom equipment Manufacturers
      • Tata communications major loser with 30.16% loss in returns
      • Reliance and Tata Teleservices saw 15% decline in market cap
  • Problems in Telecom Sector
    • Levies and Duties:
      • Has one of the highest levies and duties attached to it( 17-26%)adversely affecting availability of funds for network expansion
      • Return on capital for mobile services is 7.8%
    Source: TRAI Regulatory charges % age of revenue Service tax, GST 10% + GST License Fee 5 – 10% Spectrum Charge 2 ~ 6%* USO Included in license fees Total Regulatory charges 17%~26% + GST
  • Problems in Telecom Sector( contd)
    • Connecting Rural India:
      • Contribution from Rural India stands at a mere 20%
      • Mobile and wireless services not penetrated rural areas
    • Infrastructure sharing and Clearing issues:
      • duplication of infrastructure a colossal waste
      • Enormous delays in obtaining Right of way from different agencies like NHAI, pollution board
    • Low ARPU- Cause of concern
  • Problems in Telecom Sector( contd)
    • Global average ARPU – USD 21
    • Indian Average ARPU – USD 8
  • Legacy Telecom Fixed Line Wireless Diversified Telecom Solutions Wireless Applications E/M Payment New Telecom Business Ecosystem Telecom Service Focused Business Telecom Service Blended with Emerging Areas like VAS & Mobile Applications Transform to be Telecom Ecosystem Enabler Early Vertical Specific programs Mobile Wallets and Payment Third-party consumer and early enterprise Access and early applications Historic Transition Future Radio Pa ging Fixed Line
  • The New Telecom Ecosystem – Feeder Model New Telecom Business Ecosystem Wireless Service Provider Fixed Line Service Provider Telecom Handset Manufacturers Telecom Network Equipment Manufacturers Telecom Transmission Equipment Manufacturers Application & Content Providers Active & Passive Infrastructure Providers Drive Indian Economy Towards the 10% Economy Growth Target
  • What the New Ecosystem Will do ?
    • If the new ecosystem is established to meet the target of 250 million subscribers, then the
    • Increase in tele-density will increase the rate of growth of GDP
      • A 1% increase in tele-density results in 3% increase in rate of GDP growth rate
    • Current 5 million jobs generated by this sector can increase to 12 million
    • Proper facilitation to various sub-sectors in the ecosystem can increase revenues generated by the telecom industry for the government
      • Mobile services industry’s annual contribution of INR 32,000 crores can increase beyond INR 50,000 crores
      • Annual revenues contributed mobile industry can increase from INR 15,000 crores to INR 65,000 crores
  • Objective of FICCI telecom committee
    • Identifying major areas of growth in the sector
    • Identifying the competitiveness & potential areas for synergy in the global market
    • To organize interactive meetings among the members for taking up the challenges and working towards the opportunities
    • Conducting Workshops/ Seminars/ Conferences/ Training Programmes for promotion and better understanding of the sector and taking up the issues and challenges and working towards the opportunities
    • Organized an international Conference & Exhibition  'India Telecom 2006- Mapping the Road Ahead'
  • Challenges faced by Indian Equipment Manufacturers Industry
    • Current – Demand supply Mismatch
      • Needs to add capacity in tunes of 150 million lines to achieve 250 million subscribers by 2008
      • Required to import requisite telecom equipment
    • Inverted Duty structure hampering the industry
      • Imported telecom equipment are levied 5% customs duty
  • Recommendations
    • rel Govt. should encourage the vendors to manufacture handsets rather than just reducing import duty
    • Infrastructure sharing be mandated by the government
    • A single window clearance system should be put in place to expedite all clearanceated issues