telecom India


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telecom India

  1. 1. Telecom indusTry in india since 1991 By: umar Farooq a 16 ll
  2. 2. INTRODUCTION Postal means of communication was the only mean communication until the year 1850. In 1850 experimental electric telegraph started for first time in India between Calcutta (Kolkata). In 1851, it was opened for the use of the British East India Company. Subsequently construction of telegraph started throughout India. A separate department was opened to the public in 1854. Dr.William O’Shaughnessy, was the one who pioneered the telegraph and telephone in India. In 1980 when the private sector was allowed in telecommunications equipment manufacturing the first wind of reforms in telecommunications sector began to flow.
  3. 3. cont…Today India has the second largest number of telephone subscribers with 941.81 mn ( July 2012) in the world accounting 12%.Telecom is the third major sector attracting FDI inflows after services and computer software sector.FDI in telecom sector during April-June 2012 stood at US$ 8 million. GSM continues to be the dominant technology for wireless phones with an 87.90 % share.Mobile phones accounts for nearly 96.60 % of the total telecom subscriptions.Mobile tariffs in India are the second lowest in the world after Bangladesh.Telecom sector contributes 3.7% to the total GDP of India.
  4. 4. Reforms in Telecom sector since early 1990s1991-92: On 24th July 1991, Government announced the New Economic Policy. Telecom Manufacturing Equipment license was delicensed in 1991. 1992-93:Value added services were opened for private and foreign players on franchise or license basis.1994-95: The Government announced a National Telecom Policy in September 1994
  5. 5. 1996-97: TRAI was set up as an autonomous body to separate the regulatory functions from policy formulations and operational functions. Internet Policy was finalized.1998-99:FDI up to 49 per cent of total equity, subject to license, permitted in companies providing Global Mobile Personal Communication (GMPC) by satellite services.1999-001. National Telecom Policy 1999 was announced which allowed multiple fixed Services operators and opened long distance services to private operators.DOT/MTNL was permitted to start cellular mobile
  6. 6. 2000-01:TRAI Act was amended. The Amendment clarified and strengthened the recommendatory power of TRAI.Department of Telecom creating Bharat Sanchar Nigam Limited.Reduction in STD & ISD rates.2001-02:1. Communication Convergence Bill, was introduced in August 2001.Wireless in Local Loop (WLL) was introduced for providing telephone connection in urban, semi-urban and rural areas.2002-031. International long distance business opened for unrestricted entry. Telephony on internet permitted in April 2002
  7. 7. 2004-05:Broadband Policy announced on 14th October 2004.BSNL and MTNL launched broadband services on 14th January 2005.TRAI announced the reduction by 41 per cent on ISD calls and by 61 per cent on STD calls.2005-20061. Budget 2005-2006 cleared a hike in FDI ceiling to 74 per cent from the earlier limit of 49 per cent.BSNL and MTNL launched the One-India Plan‘.BSNL announced 33 per cent reduction in call charges for all the countries for international calls.
  8. 8. 2007-10 3G guidelines issued spectrum allocation through auction, foreign players allowed to bid.TRAI announces rules & regulations to be followed for mobile number portability in 2009.BSNL 1st one to launch WIMAX service in 2010.2011-2012Airtel launches 4G service in April 2012.
  9. 9. Major players of telecom industry & year of establishment1) Bhar t i air t el-19852) Tat a communicat ions-19863) MTNL-19864) I dea cellular -19955) Tat a t eleser vices-19966) TTML-19987) Air cel-19998) Reliance communicat ions-19999) BSNL-200010) Vodaf one Essar -200711) Uninor 2009
  10. 10. Source: Telecom Regulatory Authority ofIndia
  11. 11. Market LeaderThere are four major companies in telecom industry. Airtel, Reliance,Vodafone,Idea and BSNL.Airtel lead with 28.09% market share. Vodafone on the 2nd place with
  12. 12. Key Drivers Mobile value added services like: Mobile banking, Mobile education, Health information services, Agriculture and Entertainment, Internet services. Growth of e-business. Low cost hand sets. Rural population is the key growth driver of Indias telecom industry. Market-driven factors such as planned expansion of networks Increasing use of 3G, Wimax(wireless network) and 4G Increase of Mobile users.(rose to 944.81 million in July 2012) Digitization of Television Broadcast Network Free Market system . ( e.g. Airtel Rwanda) Mergers and Acquisitions (M&A) Increase in IT users. Growth of Manufacturing and Service Industries.
  13. 13. Challenges FACED BY TELECOMINDUSTRY Limited spectrum availability and interconnection charges between the private and state operators. Telecom manufacturing in India is not in pace. With only a few equipment manufacturers currently operating in the country, most of the telecom equipment is imported as the country lags behind in terms of telecom R&D. Lack of infrastructure in semi-rural and rural areas, which makes it difficult to make inroads into this market segment as service providers have to incur a huge initial fixed cost. One of the major challenge is the absence of a uniform approval process across the country for setting up telecom towers and other infrastructure. Inadequate utilization of existing towers. Multiple levies and high taxes on the set up of mobile towers. lack of reliable power for telecom towers and higher tariffs on telecom sites. This increases the dependence on diesel- fuelled power sources, which is considered expensive and more harmful to the environment.
  14. 14. Impact of global crisisAs we know world economy is fighting with economic slow down.It seems something special about the telecom industry which renders it partially immune to the worst effect of the down turn.Total base of connection in world is 3.2 bln.There was less impact of global crisis on Indian telecom industry as India became the 1st country in the world new connections in a month.
  15. 15. Conclusions and Recommendations A fair and transparent Spectrum Policy should be ensured by the Government. Equal Access should be ensured to provide support for the achievement of Universal Service, an appropriate financing mechanism be evolved. Provision of right of way could be given by State Governments on simple commercial terms without any special conditions Tax laws should be amended to permit efficiency with respect to consolidation and restructuring of the business of telecom operators. Foreign Investment Thresholds should be encouraged. GOI to increase rural infrastructure (Mainly Power)
  16. 16. Reference: Articles,Jul 5, 2012 e/-telecom-industry--indias- success-story• 112601.asp•
  17. 17. Stay Connected……