The telecom industry has grown rapidly over the last 20 years, dramatically changing communication globally. Mobile phone penetration is approaching 50% worldwide, with some countries exceeding 100% penetration. The battle for market share in mobile services has driven significant advertising spending in the telecom sector. In India, the number of subscribers has surpassed half a billion, second only to China, with many new operators entering and engaging in price wars. Currently, spectrum allocation is a key issue, with the government recommending operators surrender 900MHz spectrum at license renewal and reauctioning it, which telecom companies oppose due to the high costs of infrastructure replacement.

1. Telecom Industry
The telecom industry has grown and evolved at an incredible pace for the last 20 years, dramatically changing the
way people communicate and transforming everyday life along the way. Mobile phone penetration is approaching
50% globally, with some mature markets surpassing 100% penetration. Mobile broadband subscribership has topped
200 million worldwide.The battle to capture hearts and dollars in the mobile space has played out around the globe,
helping contribute to significant ad spend growth by the Telecommunications industry.The Indian Telecom story has
caught everyone’s attention the world over. The number of subscribers in India has crossed the half a billion mark,
next only to China. Along with the subscribers, the number of operators in India has also increased. The entry of new
service providers, with MTS &Uninor being the most recent and the operators’ pursuit for a stronghold in the telecom
market has led to tariff based price wars for attracting new customers.
Now days, the matter of contention in telecom industry is thespectrum. In a move, that is being widely opposed by
the industry, Telecom Commission, the highest decision making body of Department of Telecom (DoT), on
Wednesday, 17, October 2012, recommended existing operators surrendering the entire spectrum in 900 MHz band
at the time of their licencesrenewal in 2014. The entire spectrum in 900 MHz will be refarmed. However,Telecom
companies are against refarming and said that it would result in an increase in call rates by at least 64 paise a
minute. GSM operators claim that their decision could cost them over Rs. 66,000 crore in replacing infrastructure.
However, the government expects to make more money in the auction, as these companies would have to bid
aggressively to win back the spectrum, which is likely to take place in the first-half of 2013. If the same operator
emerges as the highest bidder, it will retain the 900 MHz spectrum. However, if the incumbents fail to win the
spectrum, they will be given 18 months to move to 1,800 MHz, for which an equivalent amount of spectrum will be
made available to them in the new band.The time given for the changeover will be used for making alternative plans
to put infrastructure in place before it gets the spectrum Leading telecom companies like Airtel and Vodafone India
are in for more trouble ahead with this spectrum. Airtel and Vodafone however, holds over three-fourths of the
superior 900 MHz spectrum. The recommendation will be put before the empowered group of ministers, headed by
finance minister P. Chidambaram. The licences of existing players for metro circles are coming up for renewal in
November 2014 and for other circles in 2015 and 2016. The Cellular Operators Association of India said that
operators with 900 MHz band will need to replace 286,590 base stations and install an additional 171,954 to provide
equivalent coverage on 1,800MHz.