PRESENTATION

ON
TELECOM SECTOR

-Presented By
Sanjeev Prasad
Pankaj Gupta

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-1

 STATUS OF TELECOM SECTOR

 Historically telecom network in india

was owned and managed by govt as it
is considered as a strategic service.

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-2

 INDIA’S POSITION IN TELECOM SECTOR

 India is 4th largest market in asia after china,

japan and south korea.

 Indian telecom network is 8th largest in the

world and 2nd largest among emerging
ecomomies.

 Contribution of telecom sector in terms of

revenue is 2.1 % of GDP as compared to 2.8%
in developed economies.

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-3

 REFORMS IN TELECOM SECTOR

 Reforms in telecom sector began in 1980 with

telecom manufacturing being opened for private
sector followed by national telecom policy(ntp) in
1994 and 1999.

 In 1990 telecom revolution in many countries

which resulted in better quality of service with
lower tariff rates force Indian policy makers to
open up telecom sector for private players

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-4

 POLICY REFORM- 3 PHASES
Phase-1 –

 The decade of 1980's saw private sector being

allowed in telecommunications equipment
manufacturing.

 Mahanagar telephone nigam limited (mtnl) and

videsh sanchar nigam limited (vsnl) were
formed.

 A telecom commission was set up to give focus

to telecommunications policy formation.
PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-5
 POLICY REFORM- 3 PHASES
Phase-2 –
 in 1990s, telecommunications sector also benefited
from the general opening up of the economy.
 NTP 1994 was the first attempt to give a
comprehensive roadmap for the Indian
telecommunications sector.
 Availability of telephones on demand (targeted by 1997)
 Universal service covering all villages and one pco per
500 persons in urban areas at the earliest (targeted to be
achieved by 1997)
 Telecom services at affordable and reasonable prices

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-6

 POLICY REFORM- 3 PHASES
Phase- 3-

 NTP 1999 brought in the third generations of reforms in

the indian telecommunications sector.
 FDI increase from 49% to 74%.
 Internet telephony in 2002.
 Launch of cdma technology.
 3-6 operator in each circle.
 Intra circle merger guidelines.
 Broadband policy 2004.

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-7

 CLASSIFICATION OF TELECOM SECTOR

1. Fixed line telephony

 Current market size of rs.30164 crore with
43 million lines.
 BSNL and MTNL account for 90% revenue
for basic services.
 Private sector avilable in 18 circles and
collectively account for 10% of revenue.
 Private sector offer high end services like
leased lines, isdn, videoconferencing as a
result ARPU ( av. revenue per user is more
for private players).
PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-8
CLASSIFICATION OF TELECOM SECTOR
1. Mobile telephony

 There are 25 private companies providing

cellular services in 19 telecom circles and 4
metro cities, covering 1500 towns across the
country.
 Presently, there are five private service
operators in each area, and an state operator.
 Almost 80% of the cellular subscriber base
belongs to the pre-paid segment.
 The dot has allowed cellular companies to buy
rivals within the same operating circle provided
their combined market share did not exceed 67
per cent.
 Previously, they were only allowed to buy
companies outside their circle.
PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-9
 CLASSIFICATION OF TELECOM SECTOR
3. Internet-
 Internet has become very easily accessible
with cyber cafes.
 There is no restriction on the number of
internet companies and more than 185
companies are operational.
 Internet telephony has been allowed
officially from 1 april 2002.
 The growing demand of corporates for
applications such as electronic commerce,
internet leased lines, ISDN, VPN etc is
driving the growth of the internet services
market.
PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-10
CLASSIFICATION OF TELECOM SECTOR

4. Telecom equipments-
 Growth in the telecom equipment market resulted in
increasing demand for telecom services.
 Key players like bsnl, bharti, reliance, batata, bpl and
hutchison will drive equipment market growth.
 Transmission equipment, cable and terminal equipment
are expected to drive the market in the years to come.
 Switching systems will remain a big market, with a size of
around rs 50 billion.

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-11

MARKET SHARE OF PRIVATE AND PUBLIC
PLAYERS
 The public players and the private players
share the fixed line and the mobile
segments.
 Currently the public players have more than
60% of the market share.
 Bharti airtel has the largest customer base
with 31% market share, followed by hutch
(vodafone) and bsnl with each holding 22%
market share.
 The value added services provided by the
mobile service operators contribute more
than 10% of the total revenue.
PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-12
KEY INDIAN COMPANIES

• BSNL - Incumbent service provider and World's 7th largest Telecommunications Company
providing comprehensive range of telecom services in India
• Services include Wireline, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service,
MPLS-VPN, VSAT, VoIP services, IN Services etc.

• MTNL - State owned operator covering the cities of Mumbai an Delhi

• Provides both fixed and mobile services

• Bharti Airtel - Integrated operator with presence in all segments

• Leads the mobile segment in the country

• Reliance Communications - Largest player in India in the CDMA segment

• Plans a GSM network

• Tata Teleservices - Integrated operator (with VSNL) with presence in all segments
• Provides CDMA services in 20 circles

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-13

TELECOM SERVICE PROVIDERS AND
EQUIPMENT MAJORS

• Largest pure-play GSM service provider in India

• Has over 15 million subscribers

• Has a 10% stake in Bharti telecom, an integrated service provider

• Represents the largest foreign investment in the telecom services
sector in India

• Promotes and supports a range of telecommunications products and services in

India in association with licensed operators.
• Has invested in Bharti Airtel and also Network i2i is a 50:50 Joint Venture
between Bharti and SingTel, connecting Chennai to Singapore

• Nortel offers a suite of products and solutions across two broad categories
Carrier Networks (incorporating Wireless Networks, Wireline Networks and
Optical Networks) and Enterprise Networks.
• In India since 1991. Has an R&D centre in Bangalore

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-14

 MAJOR PLAYERS IN TELECOM SECTOR
SERVICE PROVIDER NO OF CDMA NO OF GSM
SUBSCRIBER SUBSCRIBER
RELIANCE 2.7CR
TATA 1.07CR
AIRTEL 3.37 CR
MTNL 24.98 LAKH
BSNL 2.44 CR
VODAFONE 2.44 CR
IDEA 1.3 CR
SPICE 25.56 LAKH
BPL 10.62 LAKH
AIRCEL 48 LAKH
PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-15
MARKET SHARE MAJOR PLAYERS IN TELECOM
SECTOR

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-16

 INVESTMENT AND GROWTH
 In 2005-2006, the telecom industry witnessed a
growth of 21% with a total revenue of rs. 86,720
crores, and the total investment rising to rs.
2,00,660 crores.

 It is projected that the telecom industry will be

enjoying over 150% growth in the next 4-6
years.

 The growth also requires a huge investment by

the players in the sector. Bharti airtel is
planning to invest about $8 billion by the year
2010.
PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-17
 INVESTMENT AND GROWTH
 Liberalization policy and some socio-economic factors are
mainly responsible for the immense growth in the sales
volumes.
 The lifestyle of the people has changed. They need to be
connected to the other people all the time.
 With the lowering down of the tariffs the affordability of the
mobile phones has increased.
 The finance sector has also come up with loans for
handsets on 0% interest. Mobile services providers are
also expanding their coverage area by installing more and
more antennas and other equipments.

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-18

 INDIA CHINA COMPARISION
India China comparison
500
Million Subscribers

250
China
India

0
•Of the 160 million subscribers, more
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
than 90 million subscribers added in the
Year last two years

•More than 5 million subscribers added

In the 11th year every month since Dec. 2005, translating
into the highest growth rate in the world
India - 76 mn.
China - 24 mn. •On a comparison of growth since
introduction of mobile telephony, India
surpasses China at the same stage of
market evolution

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-19

IMPACT OF BUDGET 2007 ON TELECOM SECTOR
 Budget 2007 has brought disappointment to the telecom
sector.

 Mobile service providers have been asked to cut down

their roaming rentals as well as their long distance and
international call tariffs.

 Telecom regulatory authority of india (trai) is of the

opinion that this will lead to increased use of roaming,
which will ultimately lead to more revenue generation.

 With cheaper handsets and lesser tariffs, it is expected

that by the year 2010 there will be over 500 million
subscribers in the indian telecom market.

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-20

CAREER PROSPECT IN TELECOM SECTOR
 With the coming of more and more projects such as setting
up of new service bases, expansion of coverage areas,
network installations, maintenance, etc , the telecom
industry is going for high scale recruitments.

 There is a huge demand for software engineers, mobile

analysts, and hardware engineers for mobile handsets.

 There are ample opportunities for marketing people whose

services are required to capture more and more customer
base.

 The emergence of advance technologies and the high

growth rate of the industry hold a lot of promise to the
jobseekers.

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-21

CAREER PROSPECT IN TELECOM SECTOR

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-22

 TECHNOLOGY USED IN TELECOM SECTOR

Gsm (global system for mobile communication)

 The most popular standard for mobile phones in the world.

 Its promoter, the gsm association, estimates that 82% of
the global mobile market uses this standard.
 Gsm is used by over 2 billion people across more than 212
countries
 Is considered a second generation (2g) mobile phone
system.

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-23

 TECHNOLOGY USED IN TELECOM SECTOR

2.Cdma (code division multiple access )

 One of the basic concepts in data communication
is the idea of allowing several transmitters to
send information simultaneously over a single
communication channel.
 This allows several users to share a bandwidth
of frequencies.
 This concept is called multiplexing.
 Cdma employs spread-spectrum technology
and a special coding scheme (where each
transmitter is assigned a code) to allow multiple
users to be multiplexed over the same physical
channel
PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-24
 TECHNOLOGY USED IN TELECOM SECTOR

3. Wireless local loop (WLL)

 A term for the use of a wireless communications link as the

connection for delivering plain old telephone service (pots)
and/or broadband internet to telecommunications
customers

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-25

 TECHNOLOGY USED IN TELECOM SECTOR

3g technology
 The technology intended for smartphones- multimedia
cellphones
 IT PROVIDE 3mbps SPEED FOR DOWNLOADING WHICH
IS VERY HIGH AS COMPARED TO THAT OF 2G
TECHNOLOGY
 It provide intrenet surfing, downloading,audio video
conferencing, fax service and many other broad band
applications
 3g technology was implemented in japan for the first time in
the world
 Today the tech. Is serving 25 countries over more than 60
networks in asia, europe and u.S.
 Bsnl india will launch 3g tech from dec.2008 in india

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-26

FUTURE PROSPECT OF TELECOM SECTOR

India poised to be a USD 40 bn - 45 bn telecom

market by FY 2010
Telecom sector targets announced by
Government of India
• 250 million subscribers by 2007
• 500 million subscribers by 2010
• 20 million broadband subscribers by 2010
• Mobile access to all villages with population more
than 5,000 by 2006
• Mobile access to all villages with population of
more than 1,000 by 2007
PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-27
THANK YOU

PANKAJ GUPTA ICFAI NATIONAL COLLEGE AGRA 1-28