Industry Snapshot Telecom Sector

Introduction

India is currently the worlds second-largest telecommunications market with a subscriber

base of 1.05 billion and has registered strong growth in the past decade and half. The Indian
mobile economy is growing rapidly and will contribute substantially to Indias Gross
Domestic Product (GDP), according to report prepared by GSM Association (GSMA) in
collaboration with the Boston Consulting Group (BCG). The country is the fourth largest app
economy in the world.
The liberal and reformist policies of the Government of India have been instrumental along
with strong consumer demand in the rapid growth in the Indian telecom sector. The
government has enabled easy market access to telecom equipment and a fair and proactive
regulatory framework that has ensured availability of telecom services to consumer at
affordable prices. The deregulation of Foreign Direct Investment (FDI) norms has made the
sector one of the fastest growing and a top five employment opportunity generator in the
country.
The Indian telecom sector is expected to generate four million direct and indirect jobs over
the next five years according to estimates by Randstad India. The employment opportunities
are expected to be created due to combination of governments efforts to increase
penetration in rural areas and the rapid increase in smartphone sales and rising internet
usage.
International Data Corporation (IDC) predicts India to overtake US as the second-largest
smartphone market globally by 2017 and to maintain high growth rate over the next few
years as people switch to smartphones and gradually upgrade to 4G.

Market Size

Data usage on Indian telecom operators' networks (excluding Reliance Jio), doubled in six
months to 359 petabytes or 3.7 million gigabytes per month as 4G data usage share
increased to 34 per cent by the end of June 2017.$
Smartphones sales across the globe increased 6.7 per cent year-on-year to 366.2 million
between April-June 2017, on the back of increased demand of 4G smartphones in India and
other emerging markets.
The mobile industry is expected to create a total economic value of Rs 14 trillion (US$
217.37 billion) by the year 2020. It would generate around 3 million direct job opportunities
and 2 million indirect jobs during this period. @
The total number of telephone subscribers in the country rose by 11.13 per cent year-on-
year to 1,151.78 million in the September-December quarter of 2016. According to a report
by leading research firm Market Research Store, the Indian telecommunication services
market will likely grow by 10.3 per cent year-on-year to reach US$ 103.9 billion by 2020.
The revenue of mobile handset industry rose 22 per cent to Rs 1.36 trillion (US$ 21.12
billion) in 2016. * In 2017, around 200 million mobile handsets will be made out of India out
of the 270 million mobile handsets to be shipped.
According to the Ericsson Mobility Report India, smartphone subscriptions in India is
expected to increase four-fold to 810 million users by 2021, while the total smartphone
traffic is expected to grow seventeen-fold to 4.2 Exabytes (EB) per month by 2021.
According to a study by GSMA, smartphones are expected to account for two out of every
three mobile connections globally by 2020 making India the fourth largest smartphone
market. India is expected to lead in the growth of smartphone adoption globally with an
estimated net addition of 350 million by year 2020.# Total number of smartphone
shipments in India stood at 25.8 million units in the quarter ending December 2016, and
smartphone shipments during 2016 stood at 109.1 million units, up by 5.2 per cent year-on-
year. Broadband services user-base in India is expected to grow to 250 million connections
by 2017.

Investment

With daily increasing subscriber base, there have been a lot of investments and
developments in the sector. The industry has attracted FDI worth US$ 24.033 billion during
the period April 2000 to June 2017, according to the data released by Department of
Industrial Policy and Promotion (DIPP).
Some of the major developments in the recent past are:

India telecommunication companies will be investing US$ 20 billion over the next
two years for expansion of network and operations, stated Mr Akhil Gupta, Vice
Chairman, Bharti Enterprise.
Airtel divested 3.65 per cent stake or 67.53 million shares in Bharti Infratel Ltd to
raise over Rs 2,570 crore (US$ 403.21 million) in order to reduce company debt.
Topwise Communication, a Chinese Original Device Maker (ODM), plans to launch its
own brand of Comio smartphones in India and invest Rs 500 crore (US$ 77.6
million) for marketing, manufacturing, research and development as well as other
activities, with the aim to capture 5 per cent market share within three years of
operations.
Bharti Airtel Ltd has planned to invest about Rs 2,000 crore (US$ 309.88 million) over
the next three years in Project Next, its digital innovation programme, in an attempt
to strengthen its position in India's highly competitive telecommunications market.
Reliance Industries Limited plans to invest an additional sum of Rs 18,000 crore (US$
2.79 billion) during April-June 2017 on its telecom arm, Reliance Jio, to expand its
fibre network, thereby raising the total amount invested in the business to more
than Rs 1.9 trillion (US$ 29.50 billion).
Nettle Infrastructure Investment Ltd, a wholly-owned subsidiary of Bharti Airtel,
plans to acquire 21.63 per cent stake in Bharti Infratel Ltd for an estimated sum of Rs
12,400 crore (US$ 1.93 billion).
Bharti Airtel Ltd, India's largest telecom operator, has decided to buy Tikona Digital
Networks Pvt Ltds 4G business for approximately Rs 1,600 crore (US$ 248.43
million), which includes its broadband wireless access spectrum as well as 350
cellular sites in five telecom circles.
Bharti Airtel will buy Telenor's India operations in seven circles to receive 43.5
megahertz (MHz) spectrum in the 1800 MHz band.
 Apple plans to produce iPhone SE at an upcoming facility in Bengaluru, owned by its
partner Wistron.
Ortel Communications, Odishas largest multi-system operator, plans to invest
around Rs 300 crore (US$ 45 million) over the next two years, for upgrading its
infrastructure, along with strengthening its reach, efficiency and competitiveness in
the market.
Reliance Communications Limited (RCom) has signed a binding agreement with
Brookfield Infrastructure Partners to sell a 51 per cent stake in Reliance Infratel,
RComs tower unit, for Rs 11,000 crore (US$ 1.65 billion).
Private equity giant KKR & Co LP and pension giant Canada Pension Plan Investment
Board (CPPIB) are in talks to acquire a significant stake in Bharti Infratel, which is
expected at around US$ 4 billion.

Government Initiatives

The government has fast-tracked reforms in the telecom sector and continues to be
proactive in providing room for growth for telecom companies. Some of the other major
initiatives taken by the government are as follows:

The Government of India is devising a plan to provide wifi facility to 550,000 villages
by March 2019 for an estimated cost of Rs 3,700 crore (US$ 577.88 million), as per
the Department of Telecommunications, Government of India.
The Government of India has set up high level 5G India 2020 Forum with the primary
objective of early deployment of 5G in India and a globally competitive product
development and manufacturing ecosystem targeting 50 per cent of the Indian
market and 10 per cent of the global market over the next 5-7 years.
The Telecom Regulatory Authority of India (TRAI) focuses on identifying issues that
make it difficult to do telecom business in India like licence acquisition and spectrum
allotment among others, and review them in order to simply these processes to the
maximum possible extent.
The Government of India plans to auction the 5G spectrum in bands like 3,300 MHz
and 3,400 MHz to promote initiatives like Internet of Things (IoT), machine-to-
machine communications, instant high definition video transfer as well as its Smart
Cities initiative.
The Government of India has launched a phased manufacturing programme (PMP)
aimed at adding more smartphone components under the Make in India initiative
thereby giving a push to the domestic manufacturing of mobile handsets.
The Government of India has allocated Rs 10,000 crore (US$ 1.5 billion) for rolling
out optical fibre-based broadband network across 150,000 cumulative gram
panchayats (GP) and Rs 3,000 crore (US$ 450 million) for laying optical fibre cable
(OFC) and procuring equipment for the Network For Spectrum (NFS) project in 2017-
18.
Road Ahead

India will emerge as a leading player in the virtual world by having 700 million internet users
of the 4.7 billion global users by 2025, as per a Microsoft report. Internet economy expected
to touch Rs 10 trillion (US$ 155 billion) by 2018, contributing around 5 per cent to the
countrys GDP. With the governments favourable regulation policies and 4G services hitting
the market, the Indian telecommunication sector is expected to witness fast growth in the
next few years. The Government of India also plans to auction the 5G spectrum in bands like
3,300 MHz and 3,400 MHz to promote initiatives like Internet of Things (IoT), machine-to-
machine communications, instant high definition video transfer as well as its Smart Cities
initiative.

Major Players
1. Airtel
Airtel is an Indian Telecommunications company with its headquarters in New Delhi,
India.
Bharti Airtel has operations in approximately 20 countries across South Asia and Africa,
and has a strong presence in the industry. The services provided include GSM, 3G, 4G
LTE, fixed line broadband and voice services, enterprise services.
Bharti Airtel is the largest mobile network operator in India with a subscriber base of
approximately 269.71 million GSM mobile customers, 2.1 million Homes customers and
12.815 million Digital TV Subscribers. The vision of the company is to enrich the life of
their customers and are obsessed with winning customers for life through exceptional
experience.
Bharti Airtel was established on 7th July, 1995 as a public limited company. It is listed on
the Bombay Stock Exchange (BSE) as well as the National Stock Exchange of India (NSE).
The symbols are: BHARTIARTL (NSE), 532454 (BSE). The current Chairman of the
Company is Mr. Sunil Bharti Mittal. As per Ind-AS Accounts, Bharti Airtel earned a Total
revenue of INR 954,684 million and a Net Income of INR 37,997 million in the Financial
Year ended on 31st March, 2017.
Some awards and recognitions earned by the company in the year 2016-17:
Ranked first in a listing of 100 emerging market multinational companies
Recognised as the Firm of the Year Telecom
Secured the second position in Best Indian Brands Report.
Declared winner of Golden Peacock Award for Excellence in Corporate Governance
Customer Base (in millions): 269.7
Total Revenue (Million): Rs984933
Net Income (Million): Rs47455
2. Idea
Idea Cellular is an Indian mobile network operator with its headquarters in Mumbai,
Maharashtra, India.
The company was founded in 1995 and it offers the following services 2G, 3G and 4G
mobile services. Amid its commencement in 1995, Aditya Birla Group, Tata Group and AT&T
Wireless each held 33% value in the organization.
Following AT&T Wireless' merger with Cingular Wireless in 2004, Cingular chosen to offer its
32.9% stake in Idea. This stake was purchased by the staying two partners equally. Tata
forayed into the cell showcase with its own auxiliary, Tata Indicom, a CDMA-based versatile
supplier and in April 2006, Aditya Birla Group reported the obtaining of the 48.18% stake
held by Tata Group at INR 40.51 an offer adding up to INR 44.06 billion with 15% of the
stake gained by Aditya Birla Nuvo and the staying by Birla TMT property Private Ltd. both AV
Birla family possessed organizations. On 20 March 2017, Idea and Vodafone India reported
that their particular sheets had endorsed a merger of the two organizations. The merger
excluded Vodafone's 42% stake in Indus Towers Ltd. The merger created the biggest
telecom organization in India by supporters and by income. Under the terms of the
arrangement, the Vodafone will hold a 45.1% stake in the consolidated substance, the
Aditya Birla Group will hold 26% and the rest of the offers will be held by the general
population.
The company is listed in the following stock exchanges in India:
Bombay Stock Exchange
National Stock Exchange of India
As per the Financial Report for the Financial Year 2016-17, the company earned a total
Revenue of INR 358,827 million and a Total Comprehensive Income of INR 27,142 million.
Customer Base (in millions): 185.2
Total Revenue (Million): Rs369313
Net Income (Million): Rs4875

3. Vodafone
Vodafone is the second largest mobile network operator in India after Bharti Airtel in terms
of subscriber base.
Vodafone India has its headquarters in Mumbai, Maharashtra, India, and the company has a
subscriber base of nearly 200 million customers. The company commenced operations in
India in 2007.
The most renowned services offered by the company are 3G services,4G services and the
M-Pesa service. Curently, Mr. Vivek Badrinath is the CEO AMAP. Vodafone India is a 100%
subsidiary of Vodafone Group. As per the Financial Reports for the Financial Year 2016-17,
the company earned a total Revenue of approximately INR 356,742 million and a Net Profit
of INR 37,918 million. On 20th March, 2017, Vodafone India merged with Idea Cellular
which created the largest telecom company in India by subscriber base as well as revenue.
 Some awards and recognitions earned by the company in the Financial Year 2016-17 are:
Vodafone M-Pesa won the Best Corporate/ Government Payments Programme at the
Emerging Payments Awards
Vodafone Business Services wins Frost and Sullivan Best Enterprise Service Provide - SMB
award
Vodafone India recognised among the Top 20 at Best Companies to Work for
Vodafone M-Pesa recognised by Rajasthan Govt. on its partnership with Rajasthan
Grameen Aajeevika Vikas Parishad (RGAVP) for empowering the rural women
Customer Base (in millions): 183.8
Total Revenue (Million): Rs356742.1
Net Income (Million): Rs37917.82

4. BSNL
Owned by the Govt of India, BSNL is one of the largest telecom companies in India.
BSNL has been a strong telecommunication player in the Indian segment providing services
like Fixed line and mobile telephony, Internet services, digital television, IPTV to its
customers. The company has more than 110million customers across the country.
The headquarters of the company are located in Delhi, and more than 200,000 people are
employed with Bharat Sanchar Nigam Limited. In 2017, BSNL has planned to installed 25000
wifi zones in rural areas to increase penetration of telecom services especially data.
More than 800 cities are serviced across India by BSNL with its 3G services. The 4G services
of BSNL would be operation soon in many of its circles providing high speed internet. As a
part of its prepaid and postpaid services, BSNL provides voice mail, SMS, call conferencing,
roaming services apart form other voice and data services.
Customer Base (in millions): 110.68
Total Revenue (Million): Rs202905
Net Income (Million): Rs-4890

5. Reliance Communications
Reliance Communications is the lead organization of the Reliance Group and India's
preeminent and genuinely incorporated media communications specialist organization.
The organization is recorded in the BSE (Scrip ID 532712) and NSE (RCOM). The organization
was established in 2002 and is headquartered at Mumbai, Maharashtra, India.
The Company has a client base of over 118 million. Reliance Communications corporate
customer base incorporates more than 39,000 Indian and multinational companies including
little and medium ventures and more than 290 worldwide, provincial and local bearers.
Reliance Communications has built up a dish India, people to come, coordinated (remote
and wireline), united (voice, information and video) computerized organize that is fit for
 supporting best-of-class administrations crossing the whole interchanges esteem chain,
covering more than 21,000 urban communities and towns and more than 400,000 towns.
Reliance Communications claims and works the world's biggest cutting edge IP empowered
availability foundation, involving more than 280,000 kilometers of fiber optic link
frameworks in India, USA, Europe, Middle East and the Asia Pacific district.
A few honors and acknowledgments earned by the organization in the Financial Year 2016-
17 are:
Global Cloud Xchange (GCX) (Subsidiary of Reliance Communications) got Excellence in
Connectivity for Data Centers Award at the Datacloud Asia Awards
GCX CEO, Bill Barney, got the Data Center Industry Achievement Award in
acknowledgment of his noteworthy commitment to the Data Center Industry.
According to Reports, the organization earned an aggregate income of roughly INR 213,439
million in the Financial Year 2016-17.
Customer Base (in millions): 89.8
Total Revenue (Million): Rs213439
Net Income (Million): Rs-2612

6. Aircel
The Aircel group was formed in 1994 as a business alliance between Malaysian Maxis
Communications Berhad and Sindya Securities & Investments Private Limited.
Aircel commenced operations in Tamil Nadu 1999 to offer affordable and outstanding
mobile services, and the company has its headquarters in Gurugram, Haryana, India. The
company offers voice and 2G, 3G and 4G data services.
The company has considerable presence in Orissa and North-Eastern Indian states. In
August 2016, Reliance Communications (RCom) and Maxis Communications announced that
they would merge their mobile network operations.
List of awards and recognitions received by the company:
GSMA Chairmans Award at Mobile World Congress
Asia Responsible Entrepreneurship Awards
BT-CSR Excellent Award 2016 Animal Welfare by Bureaucracy Today
Voice & Data Leadership Forum 2016 Special Recognition Award
Customer Experience Awards were hosted under The Customer FEST India Show 2016
As per latest reports and articles, the company has a subscriber base of 90.9 million
customers and a total revenue of INR 62,620 million during the Financial Year 2016-17.
Customer Base (in millions): 90.9
Total Revenue (Million): Rs62620
Net Income (Million): Rs-2961
7. Jio
Reliance Jio Infocomm Limited or Jio is a LTE mobile network operator in India which was
founded in the year 2010.
Jio is a wholly owned subsidiary of Reliance Industries, and the company is based out of Navi
Mumbai, Maharashtra, India. Jio is the only network provider in India which provides VoLTE
services (Voice Over LTE).
The company commercially launched its services on 5th September, 2016. As per Reports,
the company has a customer base of 121 million subscribers and a Total Revenue of INR
339,623 million in the Financial Year 2016-17.
In June 2010, Reliance Industries (RIL) purchased a maximum share of Infotel Broadbandfor
4,800cr. Albeit unlisted, IBSL was the main organization that won broadband range in each
of the 22 hovers in India in the 4G sell off that occurred before that year. Later proceeding
as RIL's telecom backup, Infotel Broadband Services Limited was renamed as Reliance Jio
Infocomm Limited (RJIL) in January 2013. In June 2015, Jio reported that it will begin its
operations all once again the nation before the finish of 2015. However, after four months
in October 2015, the organization's representatives conveyed a public statement expressing
that the dispatch was put off to the primary quarter of the monetary year 2016-2017.
Products and Services offered by Reliance Jio include:
4G Broadband services
LYF Smartphones
Jionet WiFi
Jio Apps
JioFi
It has an initial end-to-end capacity to serve in excess of 100 million wireless broadband and
20 million Fibre-to-Home customers. Reliance Jio has also built nearly half-a-million square
feet of cloud data centres and a multi-Terabit capacity international network.
Customer Base (in millions): 121
Total Revenue (Million): Rs12.2
Net Income (Million): Rs-313.7

8. Tata Teleservices
Tata Group is represented in the telecommunication sector via Tata Teleservices Limited.
The company was founded in 1996 and has its headquarters in Mumbai, Maharashtra, India.
It has a wide presence across key geographies, spanning over 19 telecom circles and
operations in towns and villages across the country.
 The company offers integrated telecom solutions to its customers across wireline and
wireless networks on GSM, CDMA & 3G platforms. In 1996, Tata Teleservices Limited was
the pioneer of the CDMA technology platform in India.
In November 2008, Japanese telecom monster NTT Docomo bought a 26% equity stake in
Tata Docomo, a backup of Tata Teleservices, for about 130.7 billion (US$2.0 billion) or an
undertaking estimation of 502.69 billion (US$7.8 billion). NTT DOCOMO reported on 25
April 2014 that they will offer 100% of their offers in Tata DOCOMO to Tata Teleservices and
leave Indian Telecom. The purpose behind exit is a result of colossal loss of $1.3 billion. In
February 2008, TTSL reported that it would give CDMA versatile administrations focused
towards the young, in relationship with the Virgin Group on a franchisee demonstrate
premise. By April 1, 2015, all Virgin Mobile CDMA and GSM clients have been moved into
the umbrella Tata Docomo mark (Tata Indicom for Delhi NCR).
Currently, Tata Teleservices gives versatile administrations under the accompanying brand
names:
Tata DoCoMo (CDMA and GSM versatile administrator, remote broadband)
T24 Mobile (GSM versatile administrator)
Tata Teleservices is one of the most awarded brands in India for marketing excellence. Its
brands, Tata Docomo and Tata Photon, have been very popular in the Indian telecom
segment.
As per latest records, the company has an estimated subscriber base of 54.73 million and
Total revenue of INR 52,785 million during the financial year 2016-17.
Customer Base (in millions): 54.73
Total Revenue (Million): Rs52785.2
Net Income (Million): Rs-1472.09
9. Telenor

Telenor (India) Communications Private Limited, previously known as Uninor, is an Indian

versatile system administrator.
The organization is a completely claimed auxiliary of Norwegian media communications
organization Telenor Group. In February 2017, Telenor Group reported blending the India
business with Bharti Airtel post fundamental administrative endorsements.
The organization Unitech Wireless Limited, an auxiliary of Unitech Group, was joined in
2008. That year, the organization was granted remote administrations licenses for every one
of the 22 telecom circles. Accordingly, Unitech Group and Telenor Group consented to enter
a joint wander where Telenor would infuse crisp value ventures of 61.35 billion into
Unitech Wireless to take a larger part stake in the company. This was working capital put
specifically in Unitech Wireless by Telenor Group. Telenor Group led these interests in four
tranches, ensuing to endorsements from the Foreign Investment Promotion Board (FIPB)
and the Cabinet Committee of Economic Affairs (CCEA) took 67.25% responsibility for
Wireless. In September 2009, Unitech Wireless declared its image name as Uninor.
Uninor propelled in eight telecom hovers on 3 December 2009, in the wake of finishing one
of the world's biggest GSM Greenfield dispatches which was additionally one of the
 speediest telecom move outs ever in India. As indicated by Uninor, the brand was worked
around a desire serve the youthful, striving for India. After six months, 5 extra circles were
propelled including metropolitan zones like Mumbai and Kolkata. As per the Financial
Reports available, the company earned a Total Revenue of INR 6,032 million in the Financial
Year 2016-17 but incurred a Net Loss of INR 7,846 million.
Customer Base (in millions): 54.5
Total Revenue (Million): Rs6032
Net Income (Million): Rs-7846

10. MTNL
MTNL is a state-owned telecommunications company with operations in New Delhi,
Mumbai and the island nation of Mauritius.
It was founded on 1st April, 1986 and has its headquarters in New Delhi, India. The
authorized capital of the Company is Rs800 crores, and the paid up share capital is Rs630
crores divided into 63 crore share of Rs10 each.
At present, 56.25% equity shares are held by President of India & his nominees and
remaining 43.75% shares are held by FIIs, Financial Institutions, Banks, Mutual Funds and
others including individual investors. MTNL has been given Navratna status in 1997 and was
listed in New York Stock Exchange in 2001.
The corporate objectives of MTNL are:
To expand customer base and services.
To provide latest technology and services to the customers, at affordable prices.
To achieve the highest level of customer satisfaction and delight.
To diversify in other areas for providing telecom services at national and international
levels.
To provide convergence of Telecom, Information Technology and related services.
To improve productivity by training and redeployment of man-power.
To work for social benefits.
Currently, MTNL has a subscriber base of approximately 7.09 million customers and a Total
Revenue worth INR 30,003 million as per the financial reports of the Financial Year 2016-17.
Customer Base (in millions): 7.09
Total Revenue (Million): Rs30002.9
Net Income (Million): Rs-21317.2