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  • 8/14/2019 Pankaj jha


    1.1) Introduction:

    The telecom network in India is the fifth largest network in the world meeting up with

    global standards. Presently, the Indian telecom industry is currently slated to an estimated

    contribution of nearly 1% to Indias GDP.

    The Indian Telecommunications network with 110.01 million connections is the fifth

    largest in the world and the second largest among the emerging economies of Asia.

    Today, it is the fastest growing market in the world and represents unique opportunities

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    for U.S. companies in the stagnant global scenario. The total subscriber base, which has

    grown by 40% in 2005, is expected to reach 250 million in 2007.

    According to Broadband Policy 2004, Government of India aims at 9 million broadband

    connections and 18 million internet connections by 2007. The wireless subscriber base

    has jumped from 33.69 million in 2004 to 62.57 million in FY2004- 2005. In the last 3

    years, two out of every three new telephone subscribers were wireless subscribers.

    Consequently, wireless now accounts for 54.6% of the total telephone subscriber base, as

    compared to only 40% in 2003. Wireless subscriber growth is expected to bypass 2.5

    million new subscribers per month by 2007. The wireless technologies currently in use

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

    Access (CDMA). There are primarily 9 GSM and 5 CDMA operators providing mobileservices in 19 telecom circles and 4 metro cities, covering 2000 towns across the country.

    1.2) Evolution of the Industry - Important Milestones:

    Year Description

    1851 First operational land lines were laid by the govt. near Calcutta(seat of

    British Power)

    1881 Telephone Service introduced in India

    1883 Merger with the postal system

    1923 Formation of Indian Radio Telegraph Company (IRT)

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    1932 Merger of ETC and IRT into the Indian Radio and Communication


    1947 Nationalization of all foreign telecommunication companies to form the

    Posts, Telephone and Telegraph(PTT), a monopoly run by the

    governments Ministry of Communication

    1985 Department of Telecommunications (DOT) established, an exclusive

    provider of domestic and long-distance service that would be its own

    regulator (separate from the postal system)

    1986 Conversion of DOT into two wholly government-owned companies: the

    Videsh Sanchar Nigam Limited (VSNL) for international

    telecommunications and Mahanagar Telephone Nigam Limited (MTNL)

    for service in metropolitan areas.

    1997 Telecom Regulatory Authority of India created

    1999 Cellular Services are launched in India. New National Telecom Policy is


    2000 DoT becomes a corporation, BSNL

    (Source: The Indian Telecom Industry by consulting club, IIM Calcutta)

    1.3) Major Players:

    There are three types of players in telecom services:

    State owned companies (BSNL and MTNL)

    Private Indian owned companies (Reliance Infocomm, Tata Teleservices)

    Foreign invested companies (Vodafone-Essar, Bharti Tele-Ventures, Escotel, Idea

    Cellular, BPL Mobile, Spice Communications)

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    India's mobile telecom sector is one of the fastest growing sectors. Unlike in the 1990s

    when the mobile phone was an elitist product, mobile operators now tap a mass market

    with mass marketing techniques. "Unified licensing" rules allow basic and mobile

    operators into each others territory, and have ushered in perhaps the final phase of

    industry consolidation.

    It seems that only companies with deep pockets can effectively compete as primary

    operators mobile markets. Economies of scale, scope, and end-to-end presence in long-

    distance as well as local telecom, are desirable.

    There are, besides, new challenges. Operators have to find new growth drivers for the

    wire line business. There are problems of getting broadband to take off, of technology

    choice, of when to introduce new technologies, and of developing a viable business

    model in an era of convergence.

    1.4) Growth of mobile technology:

    India has the fastest growing mobile markets in the world. The mobile services were

    commercially launched in August 1995 in India. In the initial 5-6 years the average

    monthly subscribers additions were around 0.05 to 0.1 million only and the total mobilesubscribers base in December 2002 stood at 10.5 millions. However, after the number of

    proactive initiatives taken by regulator and licensor, the monthly subscriber additions

    increased to around 2 million per month in the year 2003-04 and 2004-05.

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    Although mobile telephones followed the New Telecom Policy 1994, growth was tardy

    in the early years because of the high price of hand sets as well as the high tariff structure

    of mobile telephones. The New Telecom Policy in 1999, the industry heralded several

    pro consumer initiatives. Mobile subscriber additions started picking up. The number of

    mobile phones added throughout the country in 2003 was 16 million, followed by 22

    millions in 2004, 32 million in 2005 and 65 million in 2006. The only countries with

    more mobile phones than India with 156.31 million mobile phones are China 408

    million and USA 170 million.

    India has opted for the use of both the GSM (global system for mobile communications)

    and CDMA (code-division multiple access) technologies in the mobile sector.

    The mobile tariffs in India have also become lowest in the world. A new mobile

    connection can be activated with a monthly commitment of US$ 5 only. In 2005 alone 32

    million handsets were sold in India. The data reveals the real potential for growth of the

    Indian mobile market.

    1.5) Cellular Service Providers:

    As on Apr 2007 India has 167 million mobile phone subscribers. Out of this 125 million

    are GSM users and 41 million CDMA users. BSNL, Bharti Airtel, Hutch, Idea, Aircel,

    Spice and MTNL are the main GSM providers in India. Reliance Communications and

    Tata Indicom are the main CDMA providers in India.

    Bharti Airtel

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    Airtel is providing cellular services in Delhi, Mumbai, Kolkata, Chennai, Andhra

    Pradesh, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Karnataka, Kerala,

    Madhya Pradesh, Maharashtra, Goa, Orissa, Punjab, Rajasthan, Tamil Nadu, UP and

    West Bengal. Airtel is the No.1 cellular service provider in India using GSM technology.

    Airtel has 23% market share in India with a total subscriber base of 38 million.

    Reliance Communications

    Reliance has both CDMA and GSM networks and total subscriber base of 29 million or

    17% market share. It has GSM network in Assam, Bihar, Himachal Pradesh, Kolkata,

    North East, Madhya Pradesh, Orissa and West Bengal. Reliance has CDMA networks in

    other states and cities.

    Bharat Sanchar Nigam Limited (BSNL)

    BSNL is a state owned telecom company which has GSM presence in almost every cities

    and towns. BSNL has 27 million subscribers with a market share of 16%.


    Vodafone is another emerging GSM provider in India with coverage in Kerala, Mumbai,

    Delhi, Kolkata, Chennai, Gujarat, Andhra Pradesh, Karnataka and Punjab with a total

    subscriber base of 27 million.

    Tata Indicom

    Tata Indicom is a main CDMA provider in India with 16 million subscribers all over

    India. Tata Indicom has presence in almost every state and cities in India.

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    2.1) Introduction:

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    Vodafone is a mobile network operator headquartered in Berkshire, England, UK. It is

    the largest mobile telecommunications network company in the world by turnover and

    has a market value of about 75 billion (August 2008). Vodafone currently has operations

    in 25 countries and partner networks in a further 42 countries.

    The name Vodafone comes from Vo ice da ta fone, chosen by the company to "reflect the

    provision of voice and data services over mobile phones."

    As of 2006 Vodafone had an estimated 260 million customers in 25 markets across 5

    continents. On this measure, it is the second largest mobile telecom group in the world

    behind China Mobile.

    In the United States, Vodafone owns 45% of Verizon Wireless.


    Vodafone is primarily a user of technology rather than a developer of it, and this fact is

    reflected in the emphasis of our work program on enabling new applications of mobile

    communications, using new technology for new services, research for improving

    operational efficiency and quality of our networks, and providing technology vision and

    leadership that can contribute directly to business decisions.