The document provides an overview of the Indian telecom sector, including basic telephone services, mobile phone services, radio paging, the internet, VSAT services, and the telecom equipment industry in India. It discusses the liberalization and growth of the sector over the past few decades, emerging technologies, profiles major players, regulatory aspects, and foreign investment in the telecom industry.

1. THE INDIAN TELECOM SECTOR
An Industry Profile

2. 2
Contents *
• The Telecom Industry : An Overview
• Basic Telephone Services : India
• Mobile Phone Services
• Radio Paging Services
• The Internet
• VSAT Services
• Telecom Equipment Industry : India
• Telecom Sector : Emerging Technologies
• Profiles of Top Players
• Investment Environment - Telecom Sector
• Regulatory Aspects & Government Policies
* Note : This demo pack has only a few select slides of the contents

3. 3
Global Telecom Markets
• The Telecom sector has been one of the fastest growing service
industries in the world
• The sector was adversely affected by over-capacity & recession
during the last 2 years
– The situation was further compounded by a few high profile
bankruptcies & corporate scams in 2002
• However, the problems were confined to the developed markets of
USA & Europe, and the global telecom market grew at double digit
rates thanks to the robust growth of developing markets such as
China & India

4. 4
Indian Telecom Market
• India started its telecommunication operations in 1851
• India’s 42 Mn. fixed line telephone network is the 8th largest network in the
world & the 3rd largest among the emerging economies
• Tele-density (including mobile) :50 per 1000 persons (December 2002)
against China’s 180 per 1000
• Tele-density in India is expected to reach 85 per 1000, by end 2005
• Private companies entered the telecom sector in 1992
• Current Growth
• in terms of revenue : 13 % per annum
• in terms of subscribers : 23 % per annum

5. 5
Indian Telecom Sector : Recent Developments
• Liberalisation of Telecom sector has moved at a fast clip, during the last 5
years, which witnessed rapid development & increased investments (both
domestic & FDI)
• With high level of private sector participation, the industry has registered high
growth in the recent past :
– Growth rate in subscriber base ( past 5 years) - 20 to 25 % per annum
• Private players have entered into Basic telephone services, National &
International long distance (NLD) services, in a big way - the 3 major players
are Tata, Bharti and Reliance
• Thanks to intense competition, prices for all services have come down during
2002 - STD / ISD rates ( fixed lines) have been fallen significantly; prices for
mobile services have followed suit

6. McG6
Tele-density (per 1000) : 1997 - 2003
20
23
29
36
44
54
0
10
20
30
40
50
60
97-98 98-99 99-00 2000-01 2001-02 2002-03
Note : Includes Basic & Mobile
Figures as at the end March

7. McG7
Village Public Telephony (VPT)
• In the National Telecom Policy (NTP 1999), the Government of India
had envisaged the provision of provide telecom facility in rural areas
to meet the Universal Service Obligation (USO) by March 2002
• While this target has not been achieved, there has been substantial
additions during the last 2 - 3 years.
• Apart from the public sector BSNL the private sector players in the
basic telephony sector, have also been provided with specific
targets for Village Public Telephones (VPTs)
• The target for VPT’s, for private players was nearly 98,000 by March
2002.
• The March 2002 deadline has since been extended to Dec 2003

8. McG8
Telecom Equipment Market : 2000 - 01 (contd.)
Equipment Value ( Rs. Mn.)
Infrastructure equipment for Basic & 81,000
Cellular services
Cables (OFC & JFTC) 45,000
Fixed Phone Instruments 3,500
Mobile phone Instruments (legal & grey) 10,000
Others (Routers, RAS, etc.) 40,000
Total 179,500

9. McG9
Mobile Phone Services
• Mobile Phone Services : Global
• Mobile Phone Services : India

10. McG10
Mobile Telephony : Global Scenario
( Year - 2000 )
Market value of mobile phone : USD 450 Bn.
service industry
Growth rate : 36 % per annum
Subscriber base in the Asia Pacific region : 250 Mn.
(According to Yankee Group this number
will hit 575 Mn. by 2005)
China’s subscriber base : 160 Mn
Global mobile handset market for 2002 : 465 Mn.
Global subscribers in 2002 : 1270 Mn.
Average minutes over cell phone : 280-300 per month

11. McG11
Mobile Handsets : Major Players &
Market Share ( 2001) - Global
Nokia
34%
Motorola
15%
Ericsson
8%
Samsung
7%
Siemens
7%
Kyrocera
4%
Panasonic
4%
Others
21%
By Sales Volume
Nokia is the leader
followed by Motorola
Samsung has emerged
as a major player

12. McG12
Major Players & Subscriber Base
September 2002
• Bharti is the leading mobile service provider in India, with a
subscriber base of 2.3 Mn. customers
Bharti : 2.3
Hutchinson : 1.8
BPL : 1.0
Idea : 1.0
Others : 2.4
Total : 8.5
• Others include Escotel, Spice Communications, Aircel, Koshika,
Reliance, RPG, MTNL & BSNL

13. McG13
Radio Paging Services : India
• Introduction
• Market Size & Subscriber Base : 2000
• Pager Subscriber Base : Growth Trends
• Major Players & Subscriber Base
• Major Players & Revenue : 2000-01
• Major Players & Market Share (%) : 2000-01
• Recent Developments & Future Outlook

14. McG14
Introduction
• Pager & mobile telephony services were launched almost simultaneously,
with paging service being introduced in 27 cities
• Market size ( 2001 -02 ) : Rs. 2 Bn. (including equipment)
• Metros accounts for 50 % of the total subscriber base of paging service
• Pager subscriber base has declined from 0.8 Mn. in March 1999 to 0.53
Mn. by December 2001
• Within a couple of years, mobile telephones have overtaken pagers in
India, in terms of subscriber base
• DSS Mobile continues to remain the market leader both in terms of
subscriber base & turnover

15. McG15
The Internet
• Introduction
• Global On-line Population
• Internet Users - India & Other Countries
• Internet Scenario : India
• Growth of Internet Connections & Users : India
• Mode of Internet Access in Business Segment
• Internet Service Providers (ISPs) : Recent Development
• Internet Services : Major Types & Service Providers
• Leading ISPs : India
• ISPs : Major Players & Plans

16. McG16
Introduction
• According to eTForecasts, the worldwide Internet users is around
375 Mn. (during 2000-2001)
• Of this, US accounts for 36 %, Japan 7.2%, China 6.0%, Germany
5.1% & UK 4.8%
• Around 40 % of homes in Sweden, US, Australia & Singapore have
Internet connections
• Internet users in Asia : estimated to reach 190 Mn. by 2004

17. McG17
VSAT Services : Contents
• Introduction
• VSAT Industry : Evolution & Growth
• VSATs : Installed Base
• VSAT Industry : Structure
• VSAT Industry : Market Size

18. McG18
VSAT Services in India : Introduction
• Very Small Aperture Terminal (VSAT) services have become an
intrinsic part of the telecommunications landscape in India
• VSAT services provide reach, rapid deployment potential, voice
and data communication capability & high reliability
• In 1992, the Government of India decided to give licence for the
operation of VSAT services to private companies, heralding the
birth of the commercial VSAT industry in India
• VSAT sector's growth was hampered by
– Licensing requirements & high levels of licence fee
– Restriction of private players to Ext. C band & INSAT satellite
– Speed limit of 64 kbps

19. McG19
Telecom Equipment Industry : India
• Telecom Equipment : Introduction
• Telecom Equipment Market : 2000-01
• Telecom Switch Market
• Telecom Cable Market
– Jelly Filled Telecom Cables (JFTC)
– Optical Fibre Cables (OFC)
– Telecom Cables : Major User Segment
– Telecom Cables : Current Scenario
– Telecom Cables : Future Outlook

20. McG20
Telecom Equipment : Export (2000 - 01)
Product Value (Rs. Mn.)
Optical Fibre 3000
Component 1150
Satellite communications equipment 350
Telephones 90
Mobile phones 45
Telecom modules 35
Connector boxes 35
Others 795
Total 5500
• India's telecommunications equipment export has registered an
impressive growth of 222 %, with revenue at Rs. 5500 million ; of
this, optical fibre cable has taken a share of 55 %

21. McG21
Optical Fibre Cables (OFC) : Introduction
• Each pair of OFC can carry more than 10,000 voice channels at a time
• OFC is lighter, flexible and free from any kind of electromagnetic
interference
• In OFC data is converted into light signals - this increases the speed of
transmission & enables high bandwidth capacity upto 3300 Mhz.
• Major raw material for OFC is Optical fibre, low density polyurethane, jelly,
nylon & polyester tape
• While OFC is technically more advanced compared to JFTC & can carry
more traffic, OFC is far more expensive
• Sterlite, largest manufacturer of OFC in India has an
installed capacity of 0.4 million FKm per annum

22. McG22
Internet Protocol (IP) Telephony
• IP Telephony is an upcoming technology, which allows
simultaneous communication -make voice calls, send faxes & still
be online, over IP based data networks like Internet
• IP Telephony is classified as :
– Internet Telephony - uses Internet network for voice, low cost,
but no assurance of service
– Voice over the Internet Protocol (VoIP) - permits voice traffic over
an IP based network, offers quality service
• Since 1 April 2002, IP Telephony is allowed in India

23. McG23
WLL - Recent Developments
• Government of India has issued, over 125 WLL service licences,
out of which Reliance has 18, Tata has 18, and Bharti 6
• Tata Teleservices, BSNL and MTNL has launched WLL based
mobile phone services
• Tata has around 0.5 Mn WLL, subscribers (including subscribers
of Hughes Telecom, whom they acquired)
• Reliance will launch their services in January 2003

24. McG24
Profiles of Top Players
• Videsh Sanchar Nigam Ltd.
• Mahanagar Telephone Nigam Ltd.
• Bharat Sanchar Nigam Ltd.
• Bharti Enterprises
• Reliance
• Hutchison Telecom
• Tata Telecom
• BPL
• Sterlite Optical Technologies Ltd.
• Finolex Cables
• Telecom Equipment Manufacturers Association
• Cellular Operators Association of India

25. McG25
Mahanagar Telephone Nigam Ltd. (MTNL)
• MTNL was set up on 1st April 1986, by the Government of India; to
offer basic services in Delhi & Mumbai
• Over the years MTNL has emerged as India’s leading & one of
Asia’s largest telecom operating companies
• MTNL has a market share of about 12 % in the Indian basic
telecom services with a customer base of over 4.7 Mn. lines
• Mobile subscriber base : 286,000 (GSM & CDMA)
• On November 7th, 2001, MTNL was listed at the New York Stock
Exchange

26. McG26
Regulatory Aspects & Government Policies
• Telecom Regulatory Authority of India (TRAI)
• Proposed Changes in Legislation
• Telecom Dispute Settlement & Appellate Tribunal (TDSAT)
• Recent Developments in Indian Telecom Industry
• Foreign Direct Investment (FDI)
• FDI Inflow : Telecom Sector
• Sector- wise FDI Inflow - Telecom

27. McG27
Foreign Direct Investment (FDI)
Foreign Direct Investment is permitted in the following sectors :
 Upto 100% in :
• Manufacturing of telecom equipment
• Internet service (not providing international gateways)
• ISPs who are not offering gateway services
• Infrastructure providers (provision of assets such as dark fibres,
rights of ways etc.)
• Electronic mail & Voice mail service providers
• Call centres & IT-enabled services

28. McG28
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