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  • 1. Cellular Industry inIndiaPESHWA ACHARYAShalini27/Aug/2009
  • 2. Cellular Industry in IndiaIntroductionCellular services are a part of the telecommunication sector of India. It was launched in 1999with the adoption of New National Telecom Policy by Telecom regulatory authority of India(TRAI).Cellular services are further divided into two categories, namely GSM (Global System forMobile Communications) and CDMA (Code Division Multiple Access).GSM segment consistsof players like Airtel, Vodafone, Idea and BSNL. Whereas, CDMA segment consists of playerslike Reliance, Tata, etc.There are five private service operators in each area, and an incumbent state operator.Cellular companies provide two types of subscriptions – pre-paid and post-paid. 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 circleprovided their combined market share did not exceed 67 per cent. Previously, they wereonly allowed to buy companies outside their circle.The Market PlayersSome of the major cellular providers operating at national level are BSNL’s Cellone, Airtel,Reliance, Tata Indicom and Hutch. Reliance and Tata Indicom operate on CDMA technologyand others on GSM. Apart from these, there are regional GSM operators like Spice inKarnataka, Aircel in Tamilnadu, MTNL’s Dolphin in Mumbai and Idea in North India etc.Airtel“Bharti Airtel” formerly known as Bharti Tele-Ventures Limited (BTVL) is among Indiaslargest mobile phone and Fixed Network operators. With more than 60 million subscriptionsas of 13th February 2008, it offers its mobile services under the Airtel brand and is headedby Sunil Mittal. The company also provides telephone services and Internet access over DSLin 14 circles. The company complements its mobile, broadband & telephone services withnational and international long distance services. The company also has a submarine cable
  • 3. landing station at Chennai, which connects the submarine cable connecting Chennai andSingapore. The company provides reliable end-to-end data and enterprise services to thecorporate customers by leveraging its nationwide fiber optic backbone, last mileconnectivity in fixed-line and mobile circles, VSATs, ISP and international bandwidth accessthrough the gateways and landing station.Airtel is the largest cellular service provider in India in terms of number of subscribers.Bharti Airtel owns the Airtel brand and provides the following services under the brandname Airtel: Mobile Services (using GSM Technology), Broadband & Telephone Services(Fixed line, Internet Connectivity(DSL) and Leased Line), Long Distance Services andEnterprise Services (Telecommunications Consulting for corporates).Leading international telecommunication companies such as Vodafone and SingTel heldpartial stakes in Bharti Airtel.In April 2006 Bharti Global Limited was awarded a telecommunications license in Jersey inthe Channel Islands by the local telecommunications regulator the JCRA. In September 2006the Office of Utility Regulation in Guernsey awarded Guernsey Airtel with a mobiletelecommunications license. In May 2007 Jersey Airtel and Guernsey Airtel announced thelaunch of a relationship with Vodafone for island mobile subscribers. In July 2007, BhartiAirtel signed an MoU with Nokia-Siemens for a 900 million dollar expansion of its mobileand fixed network. In August 2007, the company announced it will be launching acustomized version of Google search engine that will provide an array of services to itsbroadband customers.VodafoneVodafone is basically the biggest telecom service provider of the U.K. which has a market of£75 billions by June ’08. Vodafone currently has equity interests in 25 countries and PartnerNetworks (networks in which it has no equity stake) in a further 42 countries. The nameVodafone comes from Voice Data Fone, chosen by the company to “reflect the provision ofvoice and data services over mobile phones.” It had agreed to acquire a controlling interestof 67% in Hutchison Essar Ltd. (Hutch) for US$11.1 billion. At the same time, it agrees to sellback 5.6% of Airtel stake back to the Mittals. Vodafone retained 4.4% stake in Airtel.Vodafone is the world’s leading international mobile communications company. It now hasoperations in 25 countries across 5 continents and 40 partner networks with over 200million customers worldwide. Vodafone has also tied up with Apple’s iphone.Vodafone’s revenues have been increased by 50% during the year driven by rapid expansionof the customer base with an average of 1.5 million net additions per month sinceacquisition. As on 31st March, 2008, Vodafone’s customer base was 260 millions. Itsturnover was £35478 millions with a profit of £6756 million.
  • 4. IdeaAs Indias leading GSM Mobile Services operator, IDEA Cellular has licenses to operate in 11circles. With a customer base of over 17 million, IDEA Cellular has operations in Delhi,Maharashtra, Goa, Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh, Uttaranchal,Haryana, UP-West, Himachal Pradesh and Kerala.As a leader in Value Added Services, Innovation is central to IDEAs VAS Factory. It is the firstcellular company to launch music messaging with Cellular Jockey, Background Tones,Group Talk, a voice portal with Say IDEA and a complete suite of Mobile Email Services.Idea Cellular is a wireless telephony company operating in various states in India. It initiallystarted in 1995 as a join venture between the Tatas, Aditya Birla Group and AT&T bymerging Tata Cellular and Birla AT&T Communications.Initially having a very limited footprint in the GSM arena, the acquisition of Escotel in 2004gave Idea a truly pan-India presence covering Maharashtra (excluding Mumbai), Goa,Gujarat, Andhra Pradesh, Madhya Pradesh, Chattisgarh, Uttar Pradesh (East and West),Haryana, Kerala, Rajasthan and Delhi (inclusive of NCR).The company has its retail outlets under the "Idea n U" banner. The company has also beenthe first to offer flexible tarrif plans for prepaid customers. It also offers GPRS services inurban areas.HoldingInitially the Birlas, the Tatas and AT&T Wireless each held one-third equity in the company.But following AT&T Wireless merger with Cingular Wireless in 2004, Cingular decided to sellits 32.9% stake in Idea. This stake was bought by both the Tatas and Birlas at 16.45% each.Tatas foray into the cellular market with its own subsidiary, Tata Indicom, a CDMA-basedmobile provider, cropped differences between the Tatas and the Birlas. This dual holding bythe Tatas also became a major reason for the delay in Idea being granted a license tooperate in Mumbai. This was because as per Department of Telecom (DOT) license norms,one promoter could not have more than 10% stake in two companies operating in the samecircle and Tata Indicom was already operating in Mumbai when Idea filed for its license.The Birlas thus approached the DOT and sought its intervention, and the Tatas replied bysaying that they would exit Idea but only for a good price. On April 10, 2006, the Aditya BirlaGroup announced its acquisition of the 48.18% stake held by the Tatas at Rs. 40.51 a shareamounting to Rs. 44.06 billion. While 15% of the 48.14% stake was acquired by Aditya Birla
  • 5. Nuvo, a company in-charge of the Birlas new business initiatives, the remaining stake wasacquired by Birla TMT holdings Private Ltd., an AV Birla family owned company. Currently,Birla Group holds 98.3% of the total shares of the company.Idea has successfully launched 3 more new circles (states) in India viz. Rajasthan, HimachalPradesh and UP (East) to make itself a pan-India player. Recently, Idea got licenses tooperate in Mumbai & Bihar. They are awaiting the spectrum from DoT.RelianceThe Late Dhirubhai Ambani dreamt of a digital India — an India where the common manwould have access to affordable means of information and communication. Dhirubhai, whosingle-handedly built India’s largest private sector company virtually from scratch, hadstated as early as 1999: “Make the tools of information and communication available topeople at an affordable cost. They will overcome the handicaps of illiteracy and lack ofmobility.”It was with this belief in mind that Reliance Communications (formerly Reliance Infocomm)started laying 60,000 route kilometres of a pan-India fibre optic backbone. This backbonewas commissioned on 28 December 2002, the auspicious occasion of Dhirubhai’s 70thbirthday, though sadly after his unexpected demise on 6 July 2002.Reliance Communications has a reliable, high-capacity, integrated (both wireless andwireline) and convergent (voice, data and video) digital network. It is capable of delivering arange of services spanning the entire infocomm (information and communication) valuechain, including infrastructure and services — for enterprises as well as individuals,applications, and consulting.Today, Reliance Communications is revolutionising the way India communicates andnetworks, truly bringing about a new way of life.Reliance Communications (formerly Reliance Infocomm), along with Reliance Telecom andFlag Telecom, is part of Reliance Communications Ventures (RCoVL). According to NationalStock Exchange data, Anil Ambani controls 66.75 per cent of the company, which accountsfor more than 1.36 billion shares of the company. Reliance Infocomm is an Indiantelecommunications company. It is the flagship company of the Reliance-Anil DhirubhaiAmbani Group, comprising of power (Reliance Energy), financial services (Reliance Capital)and telecom initiatives of the Reliance ADA Group. Reliance Infocomm is currently managedby Anil Dhirubhai Ambani.It uses CDMA2000 1x technology
  • 6. HISTORYReliance Infocomm was founded by Dhirubhai Ambani. Between 1999 to 2002 RelianceInfocomm built 60,000 km of fibre optic backbone in India. This network was commissionedon December 28, 2002.FOOTPRINTAt present, Reliance Telecoms GSM cellular services are available in 340 towns within itseight-circle footprint. Reliances CDMA services are available in 19 states and cover about65% of the country, state wise. Reliance Infocomm also offered for the first time in India,mobile data services through its R-World mobile portal. This portal leverages the datacapability of the CDMA 1X network.BUSINESS REVIEWDuring the twelve months ended March 31, 2007, revenues of the Wireless businessincreased by 46% to Rs. 10,728 crore (US$ 2,489 million) from Rs. 7,364 crore (US$ 1,709million).Wireless EBITDA increased to Rs. 3,984 crore (US$ 924 million) from Rs. 2,250 crore (US$522 million). Margins expanded to 37% from 31%.EBITDA of the Global business increased by 98% during the twelve months ended March 31,2007 to Rs. 1,271 crore (US$ 295 million). EBITDA margins increased to 24% from 12% lastyear.In the same period, the Broadband business achieved revenue growth of 123% to Rs. 1,144crore (US$ 265 million), and EBITDA increased by more than 6 times, to Rs. 519 crore (US$120 million). The EBITDA margin crossed 45% in the twelve months ended March 31, 2007,from 15% in the corresponding period in the previous year.Tata IndicomTata Teleservices Limited (TTSL) is part of the Tata Group of Companies, an IndianConglomerate. It runs the brand name Tata Indicom in India in various telecom circles of
  • 7. India. The company forms part of the Tata Groups prescence in the TelecommunicationIndustry in India, along with Tata Teleservices (Maharashtra) Limited (TTML) and VSNL.TTSL was incorporated in 1995 and was the first company to offer CDMA Mobile services inIndia, specifically in the state of Andhra Pradesh.In December 2002, the company acquired the erstwhile Hughes Telecom (India) Ltd. whichwas renamed Tata Teleservices (Maharashtra) Limited.In September 2007, Tata Indicomlaunched the Talk World plan, an International Long Distance Plan.Tata is the direct competitor with Reliance, both CDMA operators in India. The companyprovides unified telecommunication solutions including mobile, fixed wireless, fixed line andbroadband. Other competitors are Vodafone, Airtel, Aircel, Idea, MTNL, BSNL providing GSMbased mobile telephony.The company was first in India to provide free intra network calling within city limits. Theylaunched a unique scheme providing lifetime rental free connectivity on its mobile and fixedwireless for a one time charge.Tata Teleservices is part of the INR Rs. 119000 Crore (US$ 29 billion) Tata Group, that hasover 87 companies, over 250,000 employees and more than 2.8 million shareholders. With acommitted investment of INR 36,000 Crore (US$ 7.5 billion) in Telecom (FY 2006), the Grouphas a formidable presence across the telecom value chain.Tata Teleservices spearheads the Group’s presence in the telecom sector. Incorporated in1996, Tata Teleservices was the first to launch CDMA mobile services in India with theAndhra Pradesh circle.Starting with the major acquisition of Hughes Tele.com (India) Limited [now renamed TataTeleservices (Maharashtra) Limited] in December 2002 the company swung into anexpansion mode. With the total Investment of Rs 19,924 Crore, Tata Teleservices hascreated a Pan India presence spread across 20 circles that includes Andhra Pradesh,Chennai, Gujarat, Karnataka, Delhi, Maharashtra, Mumbai, Tamil Nadu, Orissa, Bihar,Rajasthan, Punjab, Haryana, Himachal Pradesh, Uttar Pradesh (E), Uttar Pradesh (W), Kerala,Kolkata, Madhya Pradesh and West Bengal.Having pioneered the CDMA 3G1x technology platform in India, Tata Teleservices hasestablished a robust and reliable 3G ready telecom infrastructure that ensures quality in itsservices. It has partnered with Motorola, Ericsson, Lucent and ECI Telecom for thedeployment of a reliable, technologically advanced network.The company, which heralded convergence technologies in the Indian telecom sector, istoday the market leader in the fixed wireless telephony market with a total customer baseof over 3.8 million.
  • 8. Tata Teleservices’ bouquet of telephony services includes Mobile services, Wireless DesktopPhones, Public Booth Telephony and Wireline services. Other services include value addedservices like voice portal, roaming, post-paid Internet services, 3-way conferencing, groupcalling, Wi-Fi Internet, USB Modem, data cards, calling card services and enterprise services.Some of the other products launched by the company include prepaid wireless desktopphones, public phone booths, new mobile handsets and new voice & data services such asBREW games, Voice Portal, picture messaging, polyphonic ring tones, interactiveapplications like news, cricket, astrology, etc.Tata Indicom redefined the existing prepaid mobile market in India, by unveiling theiroffering – Tata Indicom ‘Non Stop Mobile’ which allows customers to receive free incomingcalls. Tata Teleservices today has India’s largest branded telecom retail chain and is the firstservice provider in the country to offer an online channel www.ichoose.in to offer postpaidmobile connections in the country.Tata Teleservices has a strong workforce of 6000. In addition, TTSL has created more than20,000 jobs, which will include 10,000 indirect jobs through outsourcing of its manpowerneeds. Today, Tata Teleservices Limited along with Tata Teleservices (Maharashtra) Limitedserves over 21 million customers in over 4000 towns. With an ambitious rollout plan bothwithin existing circles and across new circles, Tata Teleservices offers world-class technologyand user-friendly services in 20 circles.BSNLBharat Sanchar Nigam Limited (known as BSNL, India Communications Corporation Limited)is a public sector communications company in India. It is the Indias largesttelecommunication company with 25.14% market share as on December 31, 2007. Itsheadquarters are at Bharat Sanchar Bhawan, Harish Chandra Mathur Lane, Janpath, NewDelhi. It has the status of Mini-ratna - a status assigned to reputed Public Sector companiesin India.BSNL is Indias oldest and largest Communication Service Provider (CSP). Currently BSNL hasa customer base of 68.5 million (Basic & Mobile telephony). It has footprints throughoutIndia except for the metropolitan cities of Mumbai and New Delhi which are managed byMTNL. As on December 31, 2007 BSNL commanded a customer base of 31.7 millionWireline, 4.1 million CDMA-WLL and 32.7 million GSM Mobile subscribers. BSNLs earningsfor the Financial Year ending March 31, 2007 stood at INR 397.15b (US$ 9.67 b) with netprofit of INR 78.06b (US$ 1.90 billion). Today, BSNL is Indias largest Telco and one of thelargest Public Sector Undertaking with estimated market value of $ 100 Billion. Thecompany is planning an IPO with in 6 months to offload 10 % to public.
  • 9. Bharat Sanchar Nigam Ltd. formed in October, 2000, is Worlds 7th largestTelecommunications Company providing comprehensive range of telecom services in India:Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-VPN,VSAT, VoIP services, IN Services etc. Within a span of five years it has become one of thelargest public sector unit in India.BSNL has installed Quality Telecom Network in the country and now focusing on improvingit, expanding the network, introducing new telecom services with ICT applications in villagesand wining customers confidence. Today, it has about 47.3 million line basic telephonecapacity, 4 million WLL capacity, 20.1 Million GSM Capacity, more than 37382 fixedexchanges, 18000 BTS, 287 Satellite Stations, 480196 Rkm of OFC Cable, 63730 Rkm ofMicrowave Network connecting 602 Districts, 7330 cities/towns and 5.5 Lakhs villages.BSNL is the only service provider, making focused efforts and planned initiatives to bridgethe Rural-Urban Digital Divide ICT sector. In fact there is no telecom operator in the countryto beat its reach with its wide network giving services in every nook & corner of country andoperates across India except Delhi & Mumbai. Whether it is inaccessible areas of Siachenglacier and North-eastern region of the country. BSNL serves its customers with its widebouquet of telecom services.BSNL is numero uno operator of India in all services in its license area. The company offersvide ranging & most transparent tariff schemes designed to suite every customer.BSNL cellular service, CellOne, has more than 17.8 million cellular customers, garnering 24percent of all mobile users as its subscribers. That means that almost every fourth mobileuser in the country has a BSNL connection. In basic services, BSNL is miles ahead of its rivals,with 35.1 million Basic Phone subscribers i.e. 85 per cent share of the subscriber base and92 percent share in revenue terms.BSNL has more than 2.5 million WLL subscribers and 2.5 million Internet Customers whoaccess Internet through various modes viz. Dial-up, Leased Line, DIAS, Account LessInternet(CLI). BSNL has been adjudged as the NUMBER ONE ISP in the country.BSNL has set up a world class multi-gigabit, multi-protocol convergent IP infrastructure thatprovides convergent services like voice, data and video through the same Backbone andBroadband Access Network. At present there are 0.6 million DataOne broadbandcustomers.The company has vast experience in Planning, Installation, network integration andMaintenance of Switching & Transmission Networks and also has a world class ISO 9000certified Telecom Training Institute.
  • 10. Scaling new heights of success, the present turnover of BSNL is more than Rs.351,820million (US $ 8 billion) with net profit to the tune of Rs.99,390 million (US $ 2.26 billion)for last financial year. The infrastructure asset on telephone alone is worth aboutRs.630,000 million (US $ 14.37 billion).The turnover, nationwide coverage, reach, comprehensive range of telecom services andthe desire to excel has made BSNL the No. 1 Telecom Company of India.HistoryThe foundation of Telecom Network in India was laid by the British sometime in 19thcentury. The history of BSNL is linked with the beginning of Telecom in India. In 19th centuryand for almost entire 20th century, the Telecom in India was operated as a Government ofIndia wing. Earlier it was part of erstwhile Post & Telegraph Department (P&T). In 1975 theDepartment of Telecom (DoT) was separated from P&T. DoT was responsible for running ofTelecom services in entire country until 1985 when Mahanagar Telephone Nigam Limited(MTNL) was carved out of DoT to run the telecom services of Delhi and Mumbai. It is a wellknown fact that BSNL was carved out of Department of Telecom to provide level playingfield to private telecoms.Subsequently in 1990s the telecom sector was opened up by theGovernment for Private investment, therefore it became necessary to separate theGovernments policy wing from Operations wing. The Government of India corporatised theoperations wing of DoT on October 01, 2000 and named it as Bharat Sanchar Nigam Limited(BSNL).BSNL operates as a public sector.Market Share and GrowthThe cellular phone industry is considered to be the fastest growing industry in India. It isbelieved that the high and accelerated growth of cellular market has eventually added tothe worth of Indian economy.The Indian cellular services market recorded the highest growth across Asia-Pacific andJapan region in 2004, with a compounded annual growth rate of 67 percent. Since theindustry came into being in the mid 1990s, its average per annum growth rate has been aphenomenal 85 percent. By the end of 2002, the Indian cellular phone industry had over 10million subscribers. The industry has undergone a number of changes over the years. TheNational Telecom Policy 1999 was an important landmark in the development of the cellulartelecom industry in India; the tariff rationalization and policy regulation introduced in thePolicy helped the industry grow at the pace it did. The years 2001 and 2002 saw an increasein level of competition in the industry with more operators being given licenses, and fixedline providers also entering the mobile market. In the years ahead, there was more ofcompetition between cellular service providers.
  • 11. The key factor contributing to the increased growth is the rising standard of income. Theindustry is also eyeing rural areas of the country as new opportunities to prosper. Millions ofsubscribers are increasing every month including the rural areas. Still, more growth isexpected in the future years.Opening up of international and domestic long distance telephony services are growthdrivers 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 themain source of revenue. The reduction in tariffs for airtime, national long distance,international long distance, and handset prices has driven demand. Group Company wise % market share - July2009 Sl. No. Name of Total Sub % Market Company Figures Share 1 Bharti Airtel 105177635 32.29% 2 Vodafone 78680291 24.16% Essar 3 BSNL 50700367 15.57% 4 IDEA 48516824 14.90% 5 Aircel 23101900 7.09% 6 Reliance 12840939 3.94% Telecom 8 MTNL 4332631 1.33% 9 Loop Mobile 2350537 0.72% All India 325701124 100.00%
  • 12. Market share % 1% 7% 4% 1% 15% 32% 16% 24% Bharti Airtel Vodafone Essar BSNL IDEA Aircel Reliance MTNL LoopAccording to the latest update of July 2009, Bharti Airtel is the leding player in the mobiletelephony market with 105177635 subscribers all over India, hence covering 32% of thetotal market. It is followed by Vodafone Essar with 78680291 subscribers covering 24% ofthe market. This makes it to be the second-largest cellular company in India. Others majorcellular service providers in india are BSNL with 16% market share (50700367 subscribers)and Idea Cellular with 15% market share (48516824 subscribers).Indian service providers acquiring scale in the International Long Distance market throughacquisitions. Acquisitions - FLAG by Reliance, Tyco and Teleglobe by Videsh Sanchar NigamLimited. VSNL is now the worlds fifth largest carrier of voice globally. Reliance’s FLAGnetwork connects with 28 countries. FLAG’s FALCON cable system when completed wouldconnect 12 countries with 25 international cable landing stations.Market StrategiesOpening up of international and domestic long distance telephony services are the majorgrowth drivers for cellular industry. Cellular operators get substantial revenue from theseservices, and compensate them for reduction in tariffs on airtime, which along with rentalwas the main source of revenue. The reduction in tariffs for airtime, national long distance,international long distance, and handset prices has driven demand.
  • 13. Prominent among these were - celebrity endorsements, loyalty rewards, discount coupons,business solutions and talk time schemes. The most important consumer segments in thecellular industry were the youth segment and the business class segment. The youthsegment was the largest and fastest growing segment and was therefore targeted mostheavily by cellular service providers.Bharti Tele-Ventures adopted celebrity endorsement as its chief promotional strategy. By2004 it emerged the unprecedented leader commanding the largest market share in thecellular service market. Vodafone implemented the celebrity endorsement strategypartially, relying primarily on its creative advertising for the promotion of its brand. BSNL, onthe other hand, attracted the consumer through its low cost schemes. Being a state ownedplayer, BSNL could cover rural areas, and this helped it increase its subscriber base. Reliancewas another player that cashed on its innovative promotional strategies which includedcelebrity endorsements and attractive talk time schemes. Idea, relied heavily on its creativemedia advertising sans celebrities.Value Added Services (VAS)Value Added Services is that service which is not part of the basic voice offer and is availed offseparately by the end user. It is provided by telecom service providers. These services are used as atool for differentiation and allow the mobile operators to develop another stream of revenue.Various VAS – news, finance, entertainment, travel, download, astrology, contest, MMS, email,music, cricket, GPRS, call alert, health, M-commerce, etc.As per COAI, income from VAS was 10% of total income of service providers in 06-07 o SMS 57% o Caller line idntification 6% o Other VAS 19% o Ring tones 7% o Content download 6% o GPRS 5%VAS is supplied either in-house by the mobile network operator themselves or by a third party VASP,aka Content Provider (CP). VASPs typically connect to the operator using protocols like SMSC or to amessaging gateway that allows the operator to control and charge of the content better. There aremany national and international investors ready to invest in this segment of telecom sector.3G Spectrum3G phones is a new concept in Indian telecom market. It is notable for its ability tpo support fasterand larger quantities of data, which enables additional service offerings in the form of games, musicand video using voice video and data (triple play) and helps to bring about broadband on mobiles.
  • 14. There are more than 60 3G networks across 25 countries. 3G services are supposed to provide high-speed data rates at a minimum of 144kbps in all use scenarios going upto 2 mbps in low mobility andindoor environments. It has higher capacity and improved spectrum efficiency. The amount ofbandwidth needed for 3G services could be as much as 15-20MHz.3G helps to simultaneously transfer both voice data and non-voice data. The highlight of 3G is videotelephony. 3G spectrums have been provided to GSM and CDMA players like BSNL, MTNL, Bharti,Reliance, Tata and Vodafone. GSM players operate on 900 MHz and 1800MHz while CDMA playersoperate on 800 MHz. 3G services enhance the internet speed, fast downloading and video calling.Main 3G issues for service providers and users:  High spectrum licensing fees for 3G services  Huge capital required to build infrastructure for 3G services  Health impact of electromagnetic waves  High prices for 3G mobile services  Difficulty in switching from 2G to 3G technology  Takes time to catch up as the service is new3G AllocationsIn 3G auction, local players as well as international players can take part. For the bidding of thespectrum, companies have to pay minimum Rs. 2260 crores as a reserve price in which metro citiesand circle-A cities pay Rs. 160 crore, circle-B cities pays Rs. 80 crores and circle-C cities pay Rs. 30crore. TRAI has permitted number portability and 3G spectrum auction. From this auction, govt. isexpected to earn Rs. 30000-40000 crores. The government is in consensus that the 3G auctionreserve price should be between Rs 3,500 crore to Rs 4,040 crore, a range that could fetch theexchequer close to Rs 20,000 crore for four spectrum blocks. The Trai had recommended a reserveprice of Rs 1,010 crore in 2006. This was doubled to Rs 2,020 by the DoT in early 2008, doubled againto Rs 4,040 crore by the finance ministry in late 2008 and has recently been tweaked down to Rs3,500 crore by DoT.Regulatory Authority in IndiaTRAI’s mission is to create and nurture conditions for growth of telecommunications in thecountry in a manner n at a pace which will enable India to play a leading role in emergingglobal information society.One of the main objectives of TRAI is to provide a fair and transparent policy environmentwhich promotes a level playing field n facilities fair competition. In pursuance of aboveobjective TRAI has issued from time to time a large number of regulations, orders anddirectives to deal with issues coming before it and provided the required direction to theevolution of Indian telecom market from a Government owned monopoly to a multi-operator multi-service open competitive market. The directions, orders and regulationsissued cover a wide range of subjects including tariff, interconnection and quality of serviceas well as governance of the Authority.
  • 15. Cellular Operators Association of India (COAI)The Cellular Operators Association of India (COAI) was constituted in 1995 as a registered,non-profit, non-governmental society dedicated to the advancement of communication,particularly modern communication through Cellular Mobile Telephone Services. With avision to establish and sustain a world-class cellular infrastructure and facilitate affordablemobile communication services in India, COAIs main objectives are to protect the common& collective interests of its members.With a vision to establish and sustain a world-class cellular infrastructure and facilitateaffordable mobile communication services in India. Keeping the mandate given to it, COAI isthe official voice for the Indian Cellular industry and on its behalf it interacts with the policymaker, the licensor, the regulator, the spectrum management agency, the industry (telecom/non-telecom) associations.