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A Presentation on the Growth of Telecom Sector in India and Challenges ahead

Presentation 110414010822-phpapp01

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In this presentation I have explained about telecommunication in India. topics covered are as under Telecom Industry Overview Major Players in Telecom Sector Emerging Trends in Telecom Market Growth Avenues Role of Cost & Management Accountant in Telecom sector Q & A session. http://www.airtel3gplans.com/best-3g-service/airtel-3g-vs-aircel-3g/

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Page 1: Presentation 110414010822-phpapp01

A Presentation on the Growth of Telecom Sector in India and

Challenges ahead

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Contents• Global Telecom Scenario

• Growth of Telecom in India

• Role of BSNL

• Role Of TRAI and TDSAT

• Opportunities & Challenges

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Global Telecom Scenario

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• Mobile. 2699.270 M Fixed.1229.987 M Total. 3929.257 M• Population 6563.69 M Teledensity. 60.02

Telephone connections in millions

220.743

837.195

1744.815

1090.504

35.997

Africa

America

Asia

Europe

Oceania

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Countries with more than 100% Teledensity

• Africa – Seychelles• Americas – Argentina, Aruba, Bahamas, Barbados, Canada,

Jamaica, Puerto Rico, United States of America• Asia- Japan, Korea (Rep.), Qatar, Singapore, Taiwan,UAE • Europe- Andorra, Austria, Belgium, Bulgaria, Croatia,

Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Greenland, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxemburg, Malta, Monaco, Netherlands, Norway, Poland, Portugal, Russia, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Ukraine, United Kingdom

• Oceania- Australia, New Zealand

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Mobile Tariffs in India one of the Lowest

0.230.22

0.19

0.170.16

0.11 0.11 0.11

0.09

0.05 0.050.04

0.030.02

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ia

Ho

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Ko

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Th

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Pa

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Ch

ina

Ind

ia

US

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Growth of Telecom in India

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• 1994 National Telecom Policy – 1994 announced

• Aug 1995 Kolkata became the first metro to have a cellular network

• 1997 Telecom Regulatory Authority of India was setup

• 1999 Tariff rebalancing exercises gets initiated

• March 1999 National Telecom Policy – 99 announced

Growth of Telecom in India

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• Aug 1999 License fee (revenue share) reduced from provisional 15% to 12%, 10% & 8% on Circle wise basis (A type, B type & C type

circles)• 2000 TRAI Act amended & separate tribunal

proposed• Jan 2001 TDSAT started functioning• Jan 2001 Policy announced for additional licenses in

Basic and Mobile Services• Jan 2001 Limited mobility allowed to Basic Services

(CDMA spectrum allotted to Basic Service Operators)

Growth of Telecom in India

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• Oct-2002 BSNL entered in to GSM cellular operationw.e.f 19th October, 2002. Made incoming call free & initiated tariff equalization process

• Tariff for GSM cellular mobiles reduced• Nov 2003 Unified Access (Basic & Cellular) Service

License (USAL) introduced as a first steptowards Unified License Regime

• Technology neutral and allows provisioning any kind of service

• Apr 2004 License fee reduced by 2% across the board for all the access licenses.

Growth of Telecom in India

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Teledensity-Rural & UrbanTeledensity

0.52 0.68 0.93 1.21 1.49 1.57 1.73 1.865.88 7.96.94 8.36 10.37 12.2 14.32

20.74

26.88

39.45

48.52

60.04

2.32 2.86 3.58 4.29 5.11 7.02 8.9512.74

18.3123.21

0

10

20

30

40

50

60

70

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

07

(No

v)

Year

Rural Urban Total

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Mobile Services : Fuelling the growth

Nov-06

40.3522%

143.1178%

Fixed Line

Wireless

Nov-07

39.3115%

225.4685%

Fixed Line

Wireless

Total telephone connections as on November 2006: 183.46 millionNovember 2007: 264.77 million

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Subscribers (in millions)Year Fixed line

including WLL(F)

Mobile (GSM+WL

L(M)

Total Tele density

March-97 14.54 0.34 14.8 1.57

March-00 26.65 1.9 28.55 2.81

March-01 32.71 3.58 36.29 3.52

March-02 38.33 6.54 44.87 4.28

March-03 41.48 13 54.48 5.1

March-04 42.84 33.69 76.53 7.04

March-05 46.19 52.22 98.41 9.11

March-06 50.18 90.14 140.32 12.8

March-07 48.87 157.96 206.83 18.46

Dec. 2007 43.3 226 269.3 24.04

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Exponential Growth

Growth of Telephone Connections

21.6126.65

32.7138.29

41.33 40.92 41.42 40.22 40.78

1.20

1.88

3.58

6.68 13

.30 35.61

56.95

101.8

516

6.05

206.

83

142.

07

98.3

7

76.5

3

54.6

3

22.8

1

28.5

3

36.2

9

44.9

7

0

50

100

150

200

250

1999 2000 2001 2002 2003 2004 2005 2006 2007

Year as on 31st March

No

. of

Co

nn

ecti

on

s (i

n

Mill

ion

s)

Wireline Wireless Total

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Role of Bharat Sanchar Nigam Limited

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Bharat Sanchar Nigam LimitedCompany Profile (as on 31.12.2007)

Corporatized on 1st October 2000

Connects length and breadth of INDIA except Delhi & Mumbai

37516 Digital Exchanges with 29051 exchanges in rural areas on reliable media.

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Services Offered

BSNL is an Integrated telecom service provider which provides all types of telecom services.

Wire Line ServicesCDMA WLL Limited Mobility ServicesNational Long Distance Services International Long Distance ServicesBroadband & Internet Services IN Services viz. Prepaid calling card etc.

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Telephone connection provided by BSNL

Year Fixed Mobile Total

31.03.2001 28.11 0 28.11

31.03.2002 33.4 0.02 33.42

31.03.2003 35.93 2.26 38.19

31.03.2004 36.11 5.54 41.65

31.03.2005 37.04 9.9 46.93

31.03.2006 37.51 17.65 55.16

31.03.2007 36.92 27.8 64.72

31.12.2007 35.6 33 68.6

(in Million)

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Telephone Connect ions provided by BSNL

01020304050607080

31.03.

2001

31.03.

2002

31.03.20

03

31.03.20

04

31.03.

2005

31.03.

2006

31.03.

2007

31.12.

2007

Years

Tota

l No.

of C

onne

ctio

ns

(in m

illio

n)

Fixed Inc. WLL(F)Mobile

Tot al

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Present Status (as on 31.12.2007)

Customer Base in million

• Wireline Customers : 31.72• WLL Customers : 4.09 • GSM Customers : 32.71• Total Customers : 68.51• Broadband customers : 1.45 • Internet Customers : 3.35

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Present Status (Contd…)• Village Public Telephones (VPTs) : 5.18 Lakh• Largest Transmission Network in the Country

– OFC Network : 5.29 Lakh RKMs– M/W Network : 0.50 Lakh RKMs– Satellite Earth Stations : 217 Numbers

• Internet Nodes operational at all District Headquarters.

• All wiredline connections enabled for Dial-up Internet Services.

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Financial Achievement (Last 3 Years)

S. # Parameter 2004-05 2005-06 2006-07

1 Total Income 36090 40177 39517

2 Gross Profit 6183 8954 8933

3 Net Profit 10183 8940 7806

4 Sundry Debtors

3632 3455 3206

5 Capital Expenditure 10476 8892 8142

6 Net Fixed Assets

61769 60188 57934

7 EPS 15.75 15.3 13.95

(In Rupees Crore)

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BSNL’s Milestones• Set up on 1st October,2000• Introduced cellular services on 19th October,2002 and has

32.7 million customers as on date• Became market leader within 6 months, in its areas of

operation• Introduced limited mobility WLL services w.e.f.

December 2000, and has 4 million customers as on date • Introduced dial up internet facility w.e.f. December 2000• Introduced CLI based internet facility w.e.f. December

2003• 3.35 million Internet Customers with BSNL• Introduced Broadband in the country w.e.f. 14.11.2005 and

has 1.45 million customers

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New InitiativesWiMAX: Tender Invited for 1000 BTS at Rural Block HQs

covering 25000 village communities centres

IPTVLaunched in Three Cities viz. Bangalore, Pune &

KolkataAgreement signed with Franchisees for another

50 Cities

VOIP EOI under Issue

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Developmental Plans (2008-09)

Expansion of 13.5 m GSM lines.

Expansion of 3m Broadband.

Expansion of 2 m WLL (CDMA) lines

Introduction of 200K IP Transit Switch.

Addition of 1206 K TDM TAX

Addition of 200 IDRs Satellite System for Inaccessible Stations.

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Role Of TRAI & TDSAT in Indian Telecom Growth

TRAI• Setup in 1997• Protection of Consumer Interest• Nurture Conditions for Growth of Telecom in India• Major Activities

– Reduced levies on Operators.– Reduced upper limit in tariff (Local, STD & ISD) and other Inter-

operators tariffs.– Directives on number of network access service providers.– Policy guidelines on new services like 3G, WiMAX, Internet

Telephony, Radio Paging, VSAT, etc.– Regular monitoring of Quality of Service parameters

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Role Of TRAI & TDSAT in Indian Telecom Growth

TDSAT• An integrated & comprehensive dispute settlement

mechanism.

• Set up on 29th May 2000 & started hearing w.e.f. Jan 2001

• 83% cases disposed off from 2001 till 2007

TRAI & TDSAT provided healthy atmosphere for healthygrowth of Telecom sector (Teledensity from 1.57 in 1997to 24 in December 2007)

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Opportunities & Challenges in 2008 and years to come

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Opportunities• Rural tele-density is less than 10%.• Overall tele-density is only 24%.• Broadband penetration is just 0.25%, hence vast scope.• BPO business is growing fast: Telecom can ride on it.• Value added services like M-Commerce, M-Marketing,

Special Information, Ring tones, etc. offer venues of additional revenue.

• As globalization is increasing, more percentage of global business for Indian telecom.

• Technologies like NGN, 3G, WiMAX, will open up new frontier of business.

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Challenges• No. of operators are increasing per circle: hence

more competition• ARPUs are going down• Cost/ Customer is very high in rural areas• Spectrum – a scare commodity • Infrastructure readiness in rural• PC prices are very high• Availability of Contents in local language • Availability of Contents for Rural Population• International Bandwidth is costly• Telecom Manufacturing in India.

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• Network expansion– 250 million by 2007 - Already achieved– 600 million by 2012

• Rural connectivity– 100 million by 2010– 200 million by 2012

• Broadband– 20 million broadband connections and 40 million

internet connections to provide by 2010 – Broadband connections to provide on demand

across the country by 2012

Growth- the way aheadGrowth- the way ahead

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Thank You