The Indian telecommunications sector has experienced rapid growth in recent years and become the third largest market globally. A PESTEL analysis was conducted to analyze the key political, economic, social, technological, legal and environmental factors influencing the industry. Politically, reforms since the 1980s have opened the sector to private players. Economically, revenue and GDP contribution have increased significantly. Socially, changing lifestyles and rural connectivity have impacted demand. Technologically, advances like 3G and new standards have been adopted. Legally, regulations have evolved with the Telecom Regulatory Authority of India now overseeing the sector. Environmentally, operators are focusing more on reducing electronic waste and emissions.

1. Presented By –
Aayush Kumar
Neena Nautiyal
Shruti Mukherjee
Arpit Rastogi
Santosh Kumar
Ruchi Jain

2.  The Indian telecommunications has been zooming
up the growth curve at a feverish pace, emerging
as one of the key sectors responsible for India's
resurgent economic growth.
 It is the fastest growing telecommunication market
in the world, and with 281.62 million telephone
connections (at the end of January 2008) is the
third largest telecom market.
 India has achieved its target of reaching 250
million telephone subscribers by 2007, two months
before target.

4.  PESTEL analysis of any industry sector investigates the
important factors that are affecting the industry and influencing
the companies operating in that sector.
 PESTEL is an acronym for
political, economic, social, technological, legal and
environmental analysis.
 Political factors include government policies relating to the
industry, tax policies, laws and regulations, trade restrictions
and tariffs etc.
 The economic factors relate to changes in the wider economy
such as economic growth, interest rates, exchange rates and
inflation rate, etc.

5.  Social factors often look at the cultural aspects and include
health consciousness, population growth rate, age distribution,
changes in tastes and buying patterns, etc.
 The technological factors relate to the application of new
inventions and ideas such as R&D activity, automation,
technology incentives and the rate of technological change.
 The industry's major service is the practice of law, which is
providing legal services to individuals, businesses,
government, and non profits which is Legal analysis.
 Environmental analysis of an industry studies whether the
industry is working environmental friendly and following the
ethics or not.

6. Political Analysis

7.  Telecom reforms in India began in the 1980s with the launch of a
“Mission Better Communication” program.
 Private manufacturing of customer premise equipment was allowed
in 1984 and the Center for Development of Telematics (C-DOT) was
established for the development of indigenous technologies.
 Private franchises were freely given for public call offices (PCOs)
that offered local, domestic and international calling services.
 Two large corporate entities were spun off from the Department of
Telecommunications, e.g. Mahanagar Telephone Nigam Limited
(MTNL) for Delhi and Mumbai and Videsh Sanchar Nigam Limited
(VSNL) for all international services.

8.  The second phase of reform commenced with the
general liberalization of the economy in the early
1990s and announcement of a New Economic Policy
(NEP)-1991.
 1991 telecom equipment manufacturing was de-
licensed and value-added services were declared open
to private sector.
 1992 radio paging, cellular mobile and other value
added services were opened to private sector.
 1994 National Telecom Policy was announced and
enhanced growth of private sector.

9.  The most important landmark in telecom reforms
came with the New Telecom Policy 1999 (NTP-99).
 There were major developments on the policy front
post year 2000. Establishment of Bharat Sanchar
Nigam Ltd (BSNL) (2000), privatisation of VSNL
(2002).
 Increase in FDI limits from 49% to 74% (2005) and
proposal for mobile number portability (2006)
which paved way for the remarkable growth in the
sector.

10. Economic analysis

11.  The Indian Telecom industry has been playing an
important role in the world economy and global
revenues in 2008 were USD 4 trillion, expected to grow
at a steep 11% p.a. CAGR over the next 2 years.
 India's telecom service revenue was ~USD 30 billion in
2008, and Ernst and Young analysts believe it is
projected to almost double to ~USD 55 billion by 2012.
 GDP contribution – 2%.
 Output per annum - ₹ 136,833crores per annum &
Increasing 20% for every month.

13.  Increase in disposable incomes.
 Greater network coverage.
 Greater affordability.
 Falling mobile phone prices.
 Falling call charges.

15.  The Indian Telecom Industry
manufacturing contributes about two-thirds
of the total exports of the country.
 It has been estimated that manufacturing
exports would increase from US$ 40 billion
in 2002 to US$ 300 billion in
2015, simultaneously increasing its share
in world manufacturing trade from 0.8 % to
3.5 %.

17. S

18.  Change in lifestyle
 Fast-changing lifestyles are forcing telecom
companies to enlarge the breadth and depth of
their services.
 joint ventures in the entertainment sector to add
more services. For instance, Verizon now offers
Verizon FiOS, a basic fiber-optic service which
includes digital television, voice and high-speed
internet services.

19.  The rural Indian consumer managed to remain an
attractive proposition, especially in the demand for
consumer goods and telecom services
 3 lakh PCOs are providing community access in
the rural areas. Further, Mobile Gramin Sanchar
Sewak Scheme (GSS) � a mobile Public Call
Office (PCO) service is provided at the doorstep of
villagers.

20.  Several areer paths lead to the Indian Telecom Industry. The telecom
sector offers a variety of career options where there is room for
everyone a degree holder or a diploma holder, a candidate with a
part-time certification course or one with a full-time degree.
 The Certificate Courses for employment in the industry are:
 Certificate in Telecom Engineering.
 Certificate in Information Technology.
 Certificate in Computer Science.
 Certificate in Management Information Systems.
 Certificate in Computer Forensics.

21. Technology analysis

22. • Total spending on Research & Development
• Focus of technological efforts
• Productivity improvement

23. • Global system for mobile communication (Gsm)
• Code division multiple access (Cdma)
• Wireless local loop (WLL)
• 3G Technology

24. Environmental Analysis

25.  The strong growth of the telecom industry, and increased
equipment obsolescence have caused a dramatic rise in
the amount of electronic waste worldwide.
 Today, environmental issues have become one of the
most important factors to be considered in the telecom
industry.
 Operators are paying increasing attention to their
environmental performance, and are cooperating more
closely with telecom equipment manufacturers.
 China Mobile is one example. In December 2007, they
launched the "Green Initiative" program, which aims to
save energy and reduce emissions for its outsourcing
system and complementary equipment.

26.  International regulations on environmental
protection, especially those for telecom operations
and manufacturing, are widely recognized and
followed.
 ISO 14004:2004 provides guidelines on the
elements of an environmental management system
and its implementation.
 The process includes choosing the proper products
and networking solutions to reduce negative impact
on the environment.

27. Legal analysis

28. “Telecommunications” falls under the legislative
competence of the Union and not the States.
 Consequently the Legal framework governing
Telecommunication Sector is within the control of
the Union Government and the Parliament.
In India Legal framework, covering telecom
sector include various services like internet, radio
paging, voice mail, V sat communications, E
Commerce, broadcasting services etc.
 Indian Legal framework with respect to telecom
infrastructure is made up of five main acts

29. The Legal Framework is
provided by:
 The Indian Telegraph Act 1885.
The Wireless Telegraphy Act 1933.
 The Telegraph Wires (Unlawful Possession) Act
1950.
 The Cable Television Network (Regulation) Act
1996.

30. The genesis of the Telecommunication Regulatory
Authority of India (TRAI) lies in the bidding process for the
grant of cellular licenses.
 First major dispute, entered into by TRAI, was between
itself and The Central Government.
The question of grant or amendment of a license by the
Central Government acting in its capacity as the licensor falls
outside the jurisdiction of the powers of TRAI.
The TRAI Act which was amended and passed in 2000
and the framework relating to the TRAI currently in force
have been analyzed subsequently

31. According to the TRAI act amended in 2000, the functions of
the original TRAI have now been divided between two
separate bodies.
The Telecom Regulatory Authority of India (TRAI).
The Telecom Disputes Settlement and Appellate Tribunal.
The Recommendatory and Regulatory functions are vested
with the TRAI while dispute settlement functions are handled
by the Appellate Tribunal