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TELECOM INDUSTRYOVERVIEW

Background

The Indian Telecommunications network is the third largest in the world and the second

largest among the emerging economies of Asia. Today, it is the fastest growing market in theworld. The telecommunication sector continued to register significant success during the year

and has emerged as one of the key sectors responsible for Indias resurgent Indias economic

growth.

Segment wise Status

1. Wireline Services

With increasing penetration of the wireless services, the wireline services in the country are

becoming stagnant.

On the other hand, Broadband demand has picked up and promises to stabilise fixed line

growth.

2. GSM Sector

In terms of the Global System for Mobile Communication (GSM) subscriber base this now pl

aces India third after China and Russia.China had 401.7 million GSM subscribers.

3. CDMA Services

CDMA technology was introduced in India as a limited mobility solution. The introduction of

CDMA services has created competition, lowered tariffs and offered many citizens access to

communication services for the first time.

4. Internet Services

Internet services were launched in India on August 15, 1995. In November 1998 the

government opened up the sector to private operators. A liberal licensing regime was put in

place to increase Internet penetration across the country.

New services like IP-TV and IP-Telephony are becoming popular with the demand likely to

increase in coming years. The scopes of services under existing ISP license conditions

areunclear.

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TELECOM INDUSTRY IN INDIA

Given below is a list of some of the top telecom companies in India some are State owned,

some private & some formed in collaboration with other foreign companies.

Group Company wise Subscriber details is given below (source Indian telecom associations)

Feb2011 (COAI)

Sl. No. Name of Company Total no. of subscribers

1 Bharti Airtel 158,998,869

2 Vodafone Essar 130,920,732

3 IDEA 86,800,809

4 BSNL 85,098,200

5 Aircel 53,500,469

6 Uninor 21,577,497

7 Videocon 6,564,0838 MTNL 5,178,617

State Owned Companies

Bharat Sanchar Nigam Ltd. One of the largest & leading public sector units in India. It

was formed in October, 2000, is Worlds 7th largest Telecommunications Company

providing comprehensive range of telecom services in India BSNL is the only service

provider, making focused efforts and planned initiatives to bridge the Rural-Urban Digital

Divide ICT sector. Its wide network is present across India except Delhi & Mumbai. BSNL

cellular service, CellOne, has 55,140,282 2G cellular customers and 88,493 3Gcustomers as

on November 2009. It has 35.1 million Basic Phone subscribers form. 85 per cent share of the

subscriber base and 92 percent share in revenue terms. BSNL has more than 2.5 million

Internet Customers who access Internet through various modes viz. Dial-up, Leased Line,

DIAS, Account Less Internet (CLI). BSNL has been adjudged as the NUMBER ONE ISP in

the country.

Mahanagar Telephone Nigam Ltd (MTNL) It is a state-owned telecommunicationsservice provider in the metro cities of Mumbai and New Delhi in India. The company was a

monopoly until 1992, when the telecom sector was opened to other service providers. MTNL

provides fixed line telephones, cellular connection of both GSM & CDMA and internet

services through dialup and DSL Broadband internet. MTNL also provides other services

such as VPN,Internet Telephony- VOIP and leased lines through BSNL and VSNL.

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Private Indian owned Companies

Reliance Communications Ltd. One of the major Indian telecommunication companies

headquartered in Navi Mumbai, India. It is the 16th largest operator in the world with more

than 128 million subscribers. It is Indias largest and only telecom operator offeringnationwide CDMA, GSM and 3G mobile services. Anil DhirubhaiAmbani Group, an

offshoot of the Reliance Group, ranks among Indias top three private sector business houses

in terms of net worth. The group has business interests that range from telecommunications

(Reliance Communications Limited) to financial services (Reliance Capital Ltd) and the

generation and distribution of power (Reliance Infrastructure Limited). Reliance

Communications was the first Indian company to make handsets so popular in India. It is

present in almost the whole of country. RCom became the second private sector telecom

company (fourth overall) to launch 3G services in India.

TATA Teleservices Ltd. is the pioneer of the CDMA 1x technology platform in India. It

has embarked on a growth path since the acquisition of Hughes Tele.com (India) Ltd

[renamed Tata Teleservices (Maharashtra) Limited] by the Tata Group in 2002. It launched

mobile operations in January 2005 under the brand name Tata Indicom and today enjoys a

pan-India presence through existing operations in all of Indias 22 telecom Circles

TheCompany is also the market leader in the fixed wireless telephony market. It is the first to

pioneer the per-second tariff optionpart of its Pay for What You Use pricing paradigm. .

Tata Teleservices Limited has also become the first Indian private telecom operator to

launch 3G services in India under the brand name Tata DOCOMO, with its recent launch in

all the nine telecom Circles where it bagged the 3G license.

Idea Cellular Ltd. Initially a Birla-TATA-AT&T initiative, is now an Aditya Birla Group

company. In 2005, AT&T sold its investment in Idea, and the year after Tatas also exited.

Idea has its presence in Delhi (Metro), Andhra Pradesh, Gujarat, Haryana, Himachal Pradesh,

Maharashtra, Kerala, Madhya Pradesh, Rajasthan, Uttar Pradesh (E), Uttar Pradesh (W)

(COAI). The company is among the top four mobile telephony players in India with an 11 per

cent all-India subscribers market share. Idea enjoys a market leadership position in many of

its operational areas. It offers GPRS on all its operating networks for all categories of

subscribers, and was the first company in India to commercially launch the next generation

EDGE technology in Delhi in 2003.

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Videocon Communications Ltd. A Videocon Group Company which offers GSM mobile

services GSM service.The company started its telecom services after the 2G Auction and

operates in Tamil Nadu (including Chennai), Punjab, Haryana, Mumbai, Gujarat, Kerala,

Madhya Pradesh, UP East, UP West, Himachal Pradesh.

Private Companies with Majority Stake by Foreign Investors

Bharti Airtel Ltd. -It is the largest India mobile operator by subscriber base. Commonly

known as Airtel, is an Indian telecommunications company that operates in 19 countries

across South Asia, Africa and the Channel Islands. Airtel also offers fixed line services and

broadband services. Airtel is the largest cellular service provider in India and fifth largest in

the world present in Delhi (Metro), Mumbai (Metro), Kolkata (Metro), Chennai (Metro),

Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir,

Kerala, Karnataka, Madhya Pradesh, Maharashtra, North East, Orissa, Punjab, Rajasthan,

Tamil Nadu, Uttar Pradesh (E), Uttar Pradesh (W), West Bengal (COAI). Airtel acquired

Zains African operations for $10.7 billion to increase its base to more than 180 million

globally.

Vodafone Ltd. The worlds largest mobile telecommunications company measured by

revenues and the worlds second-largest measured by subscribers. It operates networks in

over 30 countries and has partner networks in over 40 additional countries.It owns 45% of

Verizon Wireless, the largest mobile telecommunications company in the United States

measured by subscribers. In India it is present in Andhra Pradesh, Chennai (Metro), Delhi

(Metro), Gujarat, Haryana, Karnataka, Kolkata (Metro), Mumbai (Metro), Punjab, Rajasthan,

Uttar Pradesh (W), Uttar Pradesh (E), West Bengal, Maharashtra, Tamilnadu, Kerala, Jammu

& Kashmir, Himachal Pradesh, Orissa, Bihar, Assam, North East, Madhya Pradesh (COAI).

Its primary listing is on the London Stock Exchange and it is a constituent of the FTSE 100

Index. It has a secondary listing on NASDAQ.Vodafoneentered India by acquiring the

Hutchinson stake.

Aircel Group a joint venture between Maxis Communications of Malaysia and Apollo

Hospitalsof India. It is Indias Seventh largest GSM mobile service provider. It offers both

prepaid and postpaid GSM cellular phone coverage throughout India. As on date, Aircel is

present in all 23 telecom circles. It also has the largest service in Tamil Nadu.

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TELECOM INDUSTRY IN GLOBAL

Given below is the list of global telecom players ranked on the basis of their subscriber baseservice

Rank Name Of Company Main Market Total no. of

Subscribers (in

Million)

1 China Mobile China 600.84

2 Vodafone Group UK 370.9

3 Telefonica Spain 290.5

4 America Movil Mexico 284

5 Airtel India 230

6 Orange France 217

7 Telenor Norway 203

8 VimpelCom Russia 181

9 Singtel Singapore 175.01

10 Axita Group Berhad Malaysia 159.7

China Mobile China mobile is worlds largest service provider with a customer base more

than 600 million and an employee support of 1,46,000 employees. The company operates in

China, Pakistan, Hong Kong. The company is owned by Government of PRC.

Vodafone Group- Vodafone Group is the worlds second largest mobile operator with a

customer base of more than 350 million with an employee support of83.862 employees. The

company operates in United Kingdom, India, Australia, New Zealand.

Telefonica Telefonice is a major service provider in Latin America ,North America and

European countries with an employee support base of 2,69,050 providing services like Internet,

Fixedline, Mobile telephony and digital television.

America Movil- America Movil is a telecommunication company with its presence in Latin

American ,North American and Caribbean countries with an employee base of 1,53,140

employees.

Airtel- Bharti Airtel is one of the only Indian company in top ten mobile operators as per

subscriber base with an employee base of only 24,501 employees. The company has recently

acquired MTN and Zain Telecom of Africa which increased its subscriber base to become no:5

in subscriber ranking.

CURRENT HAPPENINGS IN INDIAN TELECOM INDUSTRY

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The telecommunication industry evolved a lot over a period of time to reach, what it is now the

second largest wireless network in the world with a net coverage of 851.70 million people. The

industry worldwide is expected to produce direct employment for about 2.8 million people and

7 million indirectly.

After all these the industry is also known for the recently for the 2 G spectrum scam.

2 G SPECTRUM SCAM

The 2g spectrum scam in India involved the issue of 1232 licenses by the ruling UPA alliance

of the 2 G spectrum to 85 companies including many new telecom companies with little or no

experience in telecom sector at a price set in the year 2001.

The scam involved allegations regarding,

1) The under pricing of the 2G spectrum by the Department Of Telecommunication which

resulted in a heavy loss to the government.

2) The illegal manipulation of the spectrum allocation to favour select companies.

The issue came to light after the auction of airwaves for 3G services which amounted to Rs

67,719 crore to the exchequer. A report submitted by the Comptroller And Auditor General Of

India based on the money collected from 3G license estimated that the loss to the exchequer

due to the under pricing of 2G spectrum was Rs 176379 Crore.