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1. INTRODUCTION

Telecommunication is the transmission of information over significant distances to

communicate. In earlier times, telecommunications involved the use of visual signals, such

as beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs, or

audio messages via coded drumbeats, lung-blown horns, or sent by loud whistles, for

example. In the modern age of electricity and electronics, telecommunications now also

includes the use of electrical devices such as telegraphs, telephones, and teleprinters, the

use of radio and microwave communications, as well as fibres optics and their associated

electronics, plus the use of the orbiting satellites and the Internet. A revolution in

wireless telecommunications began in the first decade of the 20th century with

pioneering developments in wireless radio communications by Nikola Tesla and

Guglielmo Marconi.

Marconi won the Nobel Prize in Physics in 1909 for his efforts. Other highly notable

pioneering inventors and developers in the field of electrical and electronic

telecommunications include Charles Wheatstone and Samuel Morse (telegraph),

Alexander Graham Bell (telephone), Edwin Armstrong, and Lee de Forest (radio), as well as

John Logie Baird and Philo Farnsworth (television). The world's effective capacity to

exchange information through two-way telecommunication networks grew from 281

petabytes of (optimally compressed) information in 1986, to 471 petabytes in 1993, to 2.2

(optimally compressed) exabytes in 2000, and to 65 (optimally compressed) exabytes

in 2007. This is the informational equivalent of 2 newspaper pages per person per day in

1986, and 6 entire newspapers per person per day by 2007. Given this growth,

telecommunications play an increasingly important role in the world economy and theworldwide telecommunication industrys revenue was estimated to be $3.85 trillion in 2008.

The service revenue of the global telecommunications industry was estimated to be $1.7

trillion in 2008, and is expected to touch $2.7 trillion by 2013.

The telecom sector reforms were undertaken in three phases. The first phase began in the

80s, when private manufacturing of customer promise equipment was given a go-ahead in

1984. A proliferation of individual STD/ISD/PCO network also took place throughout the

country by way of private individual franchises. Maharashtra Telephone Nigam Limited

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(MTNL) was created out of the department of telecommunication (DOT) to handle the

sectors of Mumbai and Delhi respectively. A high powered telecom commission was set up

in 1989. Later Videsh Sanchar Nigam (VSNL) became the international service provider

catering to telecom services originating from India. The second phase of reforms

commenced in 1991 with the announcement of new economic policy. The government

delivered the manufacturer of telecom equipment in 1991. It also ahead up radio services in

1992. In 1994, basic telephony was opened to the private sector by granting operating

licenses to six companies. Also part of the second phase was the introduction of the National

Telecom Policy 1994. It emphasized universal service and qualitative improvement in

telecom services among other objectives. An independent statutory regulatory was

established in 1997, Internet services were opened up in 1998.

The third phase & reforms began with the announcement of the new telecom policy in 1999.

The theme of NTP was to usher in full competition through a restricted entry of private

players in all service sectors. The policy favoured the migration of existing operators from

the era of fixed license fee regime to that of revenue sharing. The policy further

declined the strengthen of the regulator opening up of international long distance (ILD) and

National Long Distance (NLD) services to the private sector and corporation of telecom

services. The year 2001 witnessed the entry of private operators in offering basic telephony

and NLD services.

The telecom sector began witnessing a trend of growth with these reforms basic

services were opened for unlimited competition more licenses were issued to the private

sector for cellular services. There has also been a considerable increase in the rate of tale

density. The telecom sector has thus completely changed both in terms of coverage and

efficiency of services. Provision of landlines a demand, digital telephone, exchanges and

the acceptability of optic fibre and wireless technology are a few instances of the

change that took instances of the change that took place in the industry.

Cellular telephone services have achieved great commercial success; because users

recognize the mobile telephone access can improve productivity and enhance safety. A new

subscriber is opting for cellular services for personal security, safety and convenience.

Mobile service providers will be benefited from the research, the ways to improve their

quality of service and to support more users in their system.

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1.1 History

Started in 1851 when the first operational land lines were laid by the government near

Calcutta (seat of British power). Telephone services were introduced in India in 1881. In

1883 telephone services were merged with the postal system. Indian Radio Telegraph

Company (IRT) was formed in 1923. After independence in 1947, all the foreign

telecommunication companies were nationalized to form the Posts, Telephone and Telegraph

(PTT), a monopoly run by the government's Ministry of Communications. Telecom sector

was considered as a strategic service and the government considered it best to bring under

state's control. The first wind of reforms in telecommunications sector began to flow in

1980s when the private sector was allowed in telecommunications equipment manufacturing.

In 1985, Department of Telecommunications (DOT) was established. It was an exclusiveprovider of domestic and long-distance service that would be its own regulator (separate from

the postal system). In 1986, two wholly government-owned companies were created: the

Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and

Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas.

In 1990s, telecommunications sector benefited from the general opening up of the economy.

Also, examples of telecom revolution in many other countries, which resulted in better

quality of service and lower tariffs, led Indian policy makers to initiate a change process

finally resulting in opening up of telecom services sector for the private sector. National

Telecom Policy (NTP) 1994 was the first attempt to give a comprehensive roadmap for the

Indian telecommunications sector. In 1997, Telecom Regulatory Authority of India (TRAI)

was created. TRAI was formed to act as a regulator to facilitate the growth of the telecom

sector. New National Telecom Policy was adopted in 1999 and cellular services were also

launched in the same year.

Telecommunication sector in India can be divided into two segments: Fixed Service Provider

(FSPs), and Cellular Services. Fixed line services consist of basic services, national or

domestic long distance and international long distance services. The state operators (BSNL

and MTNL), account for almost 90 per cent of revenues from basic services. Private sector

services are presently available in selective urban areas, and collectively account for less than

5 per cent of subscriptions. Cellular services can be further divided into two categories:

Global System for Mobile Communications (GSM) and Code Division Multiple Access

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(CDMA). The GSM sector is dominated by Airtel, Vodafone, and Idea Cellular, while the

CDMA sector is dominated by Reliance and Tata Indicom. Opening up of international and

domestic long distance telephony services are the major growth drivers for cellular industry.

Cellular operators get substantial revenue from these services, and compensate them for

reduction in tariffs on airtime, which along with rental was the main source of revenue.

1.2 Growth of Indian Telecommunication Industry

The breathtaking growth of the telecommunication companies in India over the last twenty

years has made a history. The economic resurgence affected in the early 1990s brought

around a paradigm shift on the overall business scenario of India. With the arrival of private

telecommunication companies in India, the industry observed introduction of mobile phones

into the Indian market and it became extremely popular amongst the Indian masses.

India's telecom sector has shown huge expansion in the recent years in all respects of

industrial growth due to liberalization in Government policies after 1991. Removal of

restrictions on foreign capital investment and industrial de-licensing has allowed various

private players to enter into the Indian telecommunication market.

Today, The Indian telecommunication industry is the worlds fastest growing industry with

791.38 million mobi