Rate War In Telecom Sector in

India

CONTENTS

INTODUCTION

TELECOM SERVICE PROVIDER

MAJOR SCHEMES OF SERVICE PROVIDERS

CONSUMER BENEFITS

EFFECTS ON SERVICE PROVIDERS

CONCLUSION

INTRODUCTION

India is the fourth largest telecom market in Asia after China, Japan and South Korea. The Indian telecom network is the eighth largest in the world and the second largest among emerging economies. At current levels, telecom intensiveness of Indian economy measured as the ratio of telecom revenues to GDP is 2.1 percent as compared with over 2.8 percent in developed economies.

Indian telecom sector has undergone a major process of transformation through significant policy reforms. The reforms began in 1980s with telecom equipment manufacturing being opened for private sector and were later followed by National Telecom Policy (NTP) in 1994 and NTP'1999.

Historically, the telecom network in India was owned and managed by the Government considering it to be a natural monopoly and strategic service, best under state's control. However, in 1990's, 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.

TELECOM SERVICE PROVIDER Vodafone Essar, previously Hutchison Essar is a cellular operator in India that covers 23 telecom circles in India. It offers both prepaid and postpaid GSM cellular phone coverage throughout India with good presence in the metros. It is among the top three GSM mobile operators of India.

The businesses at Bharti Airtel has always been structured into four individual strategic business units (SBU’s) - Mobile Services, Airtel Telemedia Services & Enterprise Services. The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles while the Airtel Telemedia Services business offers broadband & telephone services in 95 cities and has recently launched a Direct-to-Home (DTH) service, Airtel digital TV. Globally, Bharti Airtel is the 3rd largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom.

Reliance Communications (formerly Reliance Infocomm), along with Reliance Telecom and Flag Telecom, is part of Reliance Communications Ventures (RCoVL). It is an Indian telecommunications company. According to National Stock Exchange data, Anil Dhirubhai Ambani controls 66.77 per cent of the company, which accounts for more than 1.36 billion shares. It is the flagship company of the Reliance-Anil Dhirubhai Ambani Group.

Aircel is a mobile phone service provider in India. It offers both prepaid and postpaid GSM cellular phone coverage. Aircel was founded by NRI businessman C Sivasankaran. Aircel is a joint venture between Maxis Communications Berhad of Malaysia and Apollo Hospital Enterprise Ltd of India. It is India’s seventh largest GSM mobile service provider with a subscriber base of over 18 million. It has a market share of 6.3% among the GSM operators in the country. Aircel has won many awards for its services. Aircel got the highest rating for overall customer satisfaction and network quality in 2006 by Voice and Data. Aircel was rated as the top mid-size utility company in Business World’s ‘List of Best Mid-Size Companies’ in 2007.

Tata Teleservices Limited (TTSL) is a part of the Tata Group of companies, an Indian conglomerate. It operates under the brand name Tata Indicom in various telecom circles of India. In Nov 2008, Japanese telecom giant NTT Docomo picked up a 26 per cent equity stake in Tata Teleservices for about Rs 13,070 crore ($2.7 billion) or an enterprise value of Rs 50,269 crore ($10.38 billion). In Feb 2008, TTSL announced that it would provide CDMA mobile services targeted towards the youth, in association with the Virgin Group on a Franchisee model basis.

Some of the Major Schemes of service provider

Tata Indicom provide 10 minutes local call for just Re1.

Reliance Communication Provides All STD calls At Rs.0.50 per minute.

Vodafone Provides various schemes to their customers.

Idea Provides Gang Plan to their customer.

Airtel Provides special Number Facility

Dolphin provides Unlimited Free Local Calls to MTNL and Dolphin Numbers.

Consumer Benefits

Low Call Rates

Best Services Provided by the Telecom Company

Free or Low rate SMS

Other Special Bonus Cards to Customers

Effects on Service Provider

Low Profits

High Competition

 It is hard to determine which service provider offers reliable services and which not.

Service Quality May be Low.

Highly Qualified Management is Needed

Conclusion

Customers get benefit

Reduction in Revenue of service Provider

Best Service Available in Low Rate For customers

High Competition in Market

Thank You