The telecom industry in India has grown significantly since market reforms began in 1991. It has expanded from primarily landline services to having over 900 million mobile subscribers as of 2012, accounting for nearly 12% of global users. Key drivers of growth have been low cost mobile phones, rural connectivity initiatives, and value-added services. However, challenges remain such as limited spectrum availability, lack of rural infrastructure, and high taxes. The industry has proven resilient during the global economic slowdown. Moving forward, recommendations include ensuring fair spectrum and access policies, rural infrastructure development, and tax reforms to further strengthen the telecom sector.

1. Telecom indusTry in india
since 1991
By:
umar
Farooq
a 16
ll oloneumar89@gmail.com

2. INTRODUCTION
 Postal means of communication was the only mean
communication until the year 1850. In 1850 experimental
electric telegraph started for first time in India
between Calcutta (Kolkata).
 In 1851, it was opened for the use of the British East India
Company.
 Subsequently construction of telegraph started throughout
India. A separate department was opened to the public in 1854.
 Dr.William O’Shaughnessy, was the one who pioneered the
telegraph and telephone in India.
 In 1980 when the private sector was allowed in
telecommunications equipment manufacturing the first
wind of reforms in telecommunications sector began to
flow.

3. cont…
Today India has the second largest number of telephone
subscribers with 941.81 mn ( July 2012) in the world
accounting 12%.
Telecom is the third major sector attracting FDI inflows after
services and computer software sector.
FDI in telecom sector during April-June 2012 stood at US$ 8
million.
 GSM continues to be the dominant technology for wireless
phones with an 87.90 % share.
Mobile phones accounts for nearly 96.60 % of the total
telecom subscriptions.
Mobile tariffs in India are the second lowest in the world after
Bangladesh.
Telecom sector contributes 3.7% to the total GDP of India.

4. Reforms in Telecom sector since early 1990's
1991-92:
 On 24th July 1991, Government announced the New
Economic Policy.
 Telecom Manufacturing Equipment license was
delicensed in 1991.
1992-93:
Value added services were opened for private and
foreign players on franchise or license basis.
1994-95:
 The Government announced a National Telecom
Policy in September 1994

5. 1996-97:
 TRAI was set up as an autonomous body to separate
the regulatory functions from policy formulations and
operational functions.
 Internet Policy was finalized.
1998-99:
FDI up to 49 per cent of total equity, subject to
license, permitted in companies providing Global
Mobile Personal Communication (GMPC) by satellite
services.
1999-00
1. National Telecom Policy 1999 was announced
which allowed multiple fixed Services operators and
opened long distance services to private operators.
DOT/MTNL was permitted to start cellular mobile

6. 2000-01:
TRAI Act was amended. The Amendment clarified and
strengthened the recommendatory power of TRAI.
Department of Telecom creating Bharat Sanchar Nigam
Limited.
Reduction in STD & ISD rates.
2001-02:
1. Communication Convergence Bill, was introduced in
August 2001.
Wireless in Local Loop (WLL) was introduced for
providing telephone connection in urban, semi-urban and
rural areas.
2002-03
1. International long distance business opened for
unrestricted entry.
 Telephony on internet permitted in April 2002

7. 2004-05:
Broadband Policy announced on 14th October 2004.
BSNL and MTNL launched broadband services on
14th January 2005.
TRAI announced the reduction by 41 per cent on ISD
calls and by 61 per cent on STD calls.
2005-2006
1. Budget 2005-2006 cleared a hike in FDI ceiling to
74 per cent from the earlier limit of 49 per cent.
BSNL and MTNL launched the 'One-India Plan‘.
BSNL announced 33 per cent reduction in call charges
for all the countries for international calls.

8. 2007-10
3G guidelines issued spectrum allocation through auction,
foreign players allowed to bid.
TRAI announces rules & regulations to be followed for mobile
number portability in 2009.
BSNL 1st one to launch WIMAX service in 2010.
2011-2012
Airtel launches 4G service in April 2012.

9. Major players of telecom industry & year
of establishment
1) Bhar t i air t el-1985
2) Tat a communicat ions-1986
3) MTNL-1986
4) I dea cellular -1995
5) Tat a t eleser vices-1996
6) TTML-1998
7) Air cel-1999
8) Reliance communicat ions-1999
9) BSNL-2000
10) Vodaf one Essar -2007
11) Uninor 2009

10. Source: Telecom Regulatory Authority of
India

11. Market Leader
There are four major companies
in telecom industry.
 Airtel,
 Reliance,
Vodafone,
Idea and BSNL.
Airtel lead with 28.09% market
share.
 Vodafone on the 2nd place with

14. Key Drivers
 Mobile value added services like:
 Mobile banking, Mobile education, Health information services, Agriculture
and Entertainment, Internet services.
 Growth of e-business.
 Low cost hand sets.
 Rural population is the key growth driver of India's telecom industry.
 Market-driven factors such as planned expansion of networks
 Increasing use of 3G, Wimax(wireless network) and 4G
 Increase of Mobile users.(rose to 944.81 million in July 2012)
 Digitization of Television Broadcast Network
 Free Market system . ( e.g. Airtel Rwanda)
 Mergers and Acquisitions (M&A)
 Increase in IT users.
 Growth of Manufacturing and Service Industries.

15. Challenges FACED BY TELECOM
INDUSTRY
 Limited spectrum availability and interconnection charges between the
private and state operators.
 Telecom manufacturing in India is not in pace. With only a few
equipment manufacturers currently operating in the country, most of the
telecom equipment is imported as the country lags behind in terms of
telecom R&D.
 Lack of infrastructure in semi-rural and rural areas, which makes it
difficult to make inroads into this market segment as service providers
have to incur a huge initial fixed cost.
 One of the major challenge is the absence of a uniform approval process
across the country for setting up telecom towers and other infrastructure.
 Inadequate utilization of existing towers.
 Multiple levies and high taxes on the set up of mobile towers.
 lack of reliable power for telecom towers and higher tariffs on telecom
sites. This increases the dependence on diesel- fuelled power sources,
which is considered expensive and more harmful to the environment.

16. Impact of global crisis
As we know world economy is fighting with economic slow
down.
It seems something special about the telecom industry which
renders it partially immune to the worst effect of the down
turn.
Total base of connection in world is 3.2 bln.
There was less impact of global crisis on Indian telecom
industry as India became the 1st country in the world new
connections in a month.

17. Conclusions and Recommendations
 A fair and transparent Spectrum Policy should be ensured by the
Government.
 Equal Access should be ensured to provide support for the
achievement of Universal Service, an appropriate financing
mechanism be evolved.
 Provision of right of way could be given by State Governments
on simple commercial terms without any special conditions
 Tax laws should be amended to permit efficiency with respect to
consolidation and restructuring of the business of telecom
operators.
 Foreign Investment Thresholds should be encouraged.
 GOI to increase rural infrastructure (Mainly Power)

18. Reference:
http://www.dot.gov.in/
http://www.trai.gov.in/
http://timesofindia.indiatimes.com/ Articles,Jul 5, 2012
http://www.businessreviewindia.in/technology/softwar
e/-telecom-industry--indias- success-story•
 http://voicendata.ciol.com/content/news/110
112601.asp•
 http://www.coai.com/statistics.php

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