The cellular industry in India has grown rapidly since services launched in 1999. It is now the 2nd largest network globally, with almost 80% of subscribers using prepaid plans. The major players are Airtel, Vodafone, Idea Cellular, Reliance, and Tata Indicom. 3G spectrum auctions generated billions in revenue for the government. Looking ahead, location services and mobile music are areas for growth, as India migrates to 3G and ARPU increases. Regulatory bodies like TRAI and industry groups like COAI oversee the development of the cellular sector.

1. Cellular Industry in India

2. Cellular Service Market

3. Introduction Cellular services launched in India during 1999 Cellular services split into two, namely GSM CDMA 23 circles in India ,grouped under Metro, A, B and C. Metro circle makes up to 20.7% of the total cellular usage in India.

4. Highest minutes of usage India has the lowest call tariffs in the world, and thus, the highest minutes of usage as well.

5. GSM v/s CDMA GSM900 and 1800 spectrum GSM subscriber base crosses the 200mn mark in ‘07-’08 Better roaming accessibility CDMA uses 1800 MHz frequency band Better call quality and surfing speed Call costs cheaper GSM CDMA

6. GSM and CDMA subscribers comparison

7. Market Players Airtel Vodafone Idea Cellular Reliance Tata Indicom BSNL

8. Airtel Bharti Tele-Ventures Ltd. (BTVL) aka BhartiAirtel Co provides telephone and internet access over DSL in 14 circles. Submarine cable landing station at Chennai Airtel services include mobile services (GSM), broadband and telephone services, long-distance services and enterprise services. Vodafone and SingTel holding Airtel stakes Signed MoU with Nokia-Siemens for $9mn expansion of mobile and fixed network.

9. Vodafone Vodafone Essar acquired 67%stake of Hutch for US$11.1bn Voice Data Fone, providing voice and data services over mobile phones Operates in 25 countries across 5 continents and 40 partner networks with over 200 mn customers worldwide Rapid increase in revenue by 50% with an avg. of 1.5mn net additions per month Among the fastest growing cellular service cos. of India Earned profits of about £6756mn as on March ‘09

10. Idea Cellular First cellular co to launch background tones, group talk and a complete suite of mobile email services Initially started as a merger of Tata Cellular and Birla AT&T Communications in 1995 The co had a split with the Tata taking an exit from the co for Rs.44.06bn Launched 3 more circles, Rajasthan, Himachal Pradesh and UP (East) Acquisition of Escotel in 2004 covered Maharashtra, Goa, Gujarat, AP, MP, Chattisgarh, UP (West), Haryana, Kerala and Delhi.

11. Reliance Reliance Infocomm, Reliance Telecom and Flag Telecom a part of Reliance Communications Ventures (RCoVL) Reliance Infocomm uses CDMA2000 technology Reliance telecom-GSM services in 340 towns within 8 circles CDMA services cover 19 states, almost 65% of India Provides both wireless and wireline services as well as convergent digital network

12. Tata Indicom Incorporated in 1995 and is the first one to provide CDMA mobile services In 2002, acquired Hughes Telecom (I) Ltd and launched Talk World plan in 2007 With total investment of Rs. 19924 Cr. Operates in 20 circles in India Partnership with Motorola, Ericsson, Lucent and ECI Telecom for reliable and advanced network Leader in fixed wireless telephony with 3.8mn customer base Includes wireless desktop phones, public phone booths, voice and data services

13. BSNL First one to provide 3G services India’s oldest and largest CSP and also largest PSU, market value $100bn Provides services like wireline, CDMA mobile, GSM mobile, internet, broadband, carrier service, etc. World’s 7th largest Telecommunications Co

14. Market Share and Growth Major growth drivers – intl. and domestic long distance telephony services According to Unified Licensing Policy 15% of operator revenue goes to the govt. India’s cellular market has grown rapidly since last few years and is poised to be the 2nd largest network globally by 2012 Almost 80% of the cellular subscriber base from pre-paid segment Avg. growth rate is about 85% p.a.

15. MOST (Mobile Operators Shared Tower) started infra-sharing in India with the concept of multi-technology (GSM & CDMA) and multi operators (upto 6 operators) sharing a single tower. Several Indian firms gaining a foothold in the global market.

16. Market Share of companies – July 2009 Airtel105177635 Vodafone 78680291 BSNL 50700367 Idea 48516824 Aircel 23101900 Reliance 12840939 MTNL 4332631 Loop 2350537 Total 325701124

17. Marketing Strategies Revenues used to reduce airtime tariffs, long distance calling prices and handset prices. This reduction in airtime tariffs increases the demand for cellular services. Cos focusing on rural areas for more connections. Increasing VAS provided by different cellular cos Other promotional strategies include – celebrity endorsements, loyalty rewards, creative ads, business solutions, talktime schemes, etc. Target market of cellular cos being the youth as it is the fastest growing segment of all.

18. Value Added Services As per COAI, income from VAS was 10% of total income of service providers in 06-07 SMS 57% Caller line idntification 6% Other VAS 19% Ring tones 7% Content download 6% GPRS 5% VAS supplied by mobile network operators or VASP/CP Many national and intl investors ready to invest in this segment of telecom market.

19. 3G Spectrum – The Latest Buzz

20. 3G technology Supports diverse multimedia applications Enables triple play and broadband services Requires huge bandwidth (15-20 MHz) Providing high-speed internet, fast downloading and video calling. More than 60 3G networks present across 25 countries. Transfers both voice data and non-voice data BSNL and MTNL spectrums allotted immediately and private cos to get spectrum allocations by 2009

21. Main highlight – video calling Finance Ministry decided of reserve price to be Rs. 4040cr. In ‘08 but it has been recently brought down by DoT to Rs. 3500cr. Metro & Circle A Rs. 160cr. Circle B Rs. 80cr. Circle C Rs. 30cr. Govt. to earn about Rs. 30k-40k cr. for 4 spectrum blocks

22. Future Trends Location based services Mobile music will increase with better bandwidth Migrattion to 3G will increase ARPU Mobile commerce might be developed further Mobile email will be driven by enterprises Stocks on mobile will see an uptake

23. TRAI TRAI’s mission is to create and nurture conditions for growth of telecommunications in the country in a manner and at a pace which will enable India to play a leading role in emerging global information society. Objective of TRAI - to provide a fair and transparent policy environment. In pursuance of above objective TRAI has issued from time to time a large number of regulations, orders and directives to deal with issues coming before it and provided the required direction to the evolution of Indian telecom market from a Government owned monopoly to a multi-operator multi-service open competitive market. The directions, orders and regulations issued cover a wide range of subjects including tariff, interconnection and quality of service as well as governance of the Authority.

24. 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 a vision to establish and sustain a world-class cellular infrastructure and facilitate affordable mobile communication services in India, COAI's main objectives are to protect the common & collective interests of its members.