Rate War In Telecom Sector in India Submitted by: Pallavi Syal Ritesh Goyal P. Sonika
CONTENTS INTODUCTION TELECOM SERVICE PROVIDER MAJOR SCHEMES OF SERVICE PROVIDERS CONSUMER BENEFITS EFFECTS ON SERVICE PROVIDERS CONCLUSION
INTRODUCTIONIndia is the fourth largest telecom market in Asia after China, Japan and SouthKorea. The Indian telecom network is the eighth largest in the world and thesecond largest among emerging economies. At current levels, telecomintensiveness of Indian economy measured as the ratio of telecom revenues toGDP is 2.1 percent as compared with over 2.8 percent in developed economies.Indian telecom sector has undergone a major process of transformation throughsignificant policy reforms. The reforms began in 1980s with telecom equipmentmanufacturing being opened for private sector and were later followed by NationalTelecom Policy (NTP) in 1994 and NTP1999.Historically, the telecom network in India was owned and managed by theGovernment considering it to be a natural monopoly and strategic service, bestunder states control. However, in 1990s, examples of telecom revolution in manyother countries, which resulted in better quality of service and lower tariffs, ledIndian policy makers to initiate a change process finally resulting in opening up oftelecom services sector for the private sector.
TELECOM SERVICE PROVIDER Vodafone Essar, previously Hutchison Essar is a cellular operator in India thatcovers 23 telecom circles in India. It offers both prepaid and postpaid GSM cellularphone coverage throughout India with good presence in the metros. It is among thetop three GSM mobile operators of India. The businesses at Bharti Airtel has always been structured into four individualstrategic business units (SBU’s) - Mobile Services, Airtel Telemedia Services &Enterprise Services. The mobile business provides mobile & fixed wireless servicesusing GSM technology across 23 telecom circles while the Airtel TelemediaServices business offers broadband & telephone services in 95 cities and hasrecently launched a Direct-to-Home (DTH) service, Airtel digital TV. Globally, BhartiAirtel is the 3rd largest in-country mobile operator by subscriber base, behind ChinaMobile and China Unicom.Reliance Communications (formerly Reliance Infocomm), along with RelianceTelecom and Flag Telecom, is part of Reliance Communications Ventures (RCoVL).It is an Indian telecommunications company. According to National Stock Exchangedata, Anil Dhirubhai Ambani controls 66.77 per cent of the company, whichaccounts for more than 1.36 billion shares. It is the flagship company of theReliance-Anil Dhirubhai Ambani Group.
Aircel is a mobile phone service provider in India. It offersboth prepaid and postpaid GSM cellular phone coverage. Aircel was founded byNRI businessman C Sivasankaran. Aircel is a joint venture between MaxisCommunications Berhad of Malaysia and Apollo Hospital Enterprise Ltd of India. Itis India’s seventh largest GSM mobile service provider with a subscriber base ofover 18 million. It has a market share of 6.3% among the GSM operators in thecountry. Aircel has won many awards for its services. Aircel got the highest ratingfor overall customer satisfaction and network quality in 2006 by Voice and Data.Aircel was rated as the top mid-size utility company in Business World’s ‘List ofBest Mid-Size Companies’ in 2007. Tata Teleservices Limited (TTSL) is a part of the Tata Group of companies, anIndian conglomerate. It operates under the brand name Tata Indicom in varioustelecom circles of India. In Nov 2008, Japanese telecom giant NTT Docomo pickedup a 26 per cent equity stake in Tata Teleservices for about Rs 13,070 crore ($2.7billion) or an enterprise value of Rs 50,269 crore ($10.38 billion). In Feb 2008,TTSL announced that it would provide CDMA mobile services targeted towards theyouth, in association with the Virgin Group on a Franchisee model basis.
Some of the Major Schemes of service provider Tata Indicom provide 10 minutes local call for just Re1. Reliance Communication Provides All STD calls At Rs.0.50 per minute. Vodafone Provides various schemes to their customers. Idea Provides Gang Plan to their customer. Airtel Provides special Number Facility Dolphin provides Unlimited Free Local Calls to MTNL and Dolphin Numbers.
Consumer Benefits Low Call Rates Best Services Provided by the Telecom Company Free or Low rate SMS Other Special Bonus Cards to Customers
Effects on Service Provider Low Profits High Competition It is hard to determine which service provider offers reliable services andwhich not. Service Quality May be Low. Highly Qualified Management is Needed
Conclusion Customers get benefit Reduction in Revenue of service Provider Best Service Available in Low Rate For customers High Competition in Market