21 CHAPTER - 2 OVERVIEW OF TELECOMMUNICATION SECTOR IN INDIA
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21
CHAPTER - 2
OVERVIEW OF TELECOMMUNICATION
SECTOR IN INDIA
22
CHAPTER - 2
OVERVIEW OF TELECOMMUNICATION SECTOR IN INDIA 2.1 INVENTION OF THE CELL PHONE
Doctor Martin Cooper invented the modern cell phone. He has invented the
technology responsible for the cell phone when was the Director of Research and
Development at Motorola. Cooper is also known as the first person to make a call on
a cell phone. His groundbreaking call took place in April of 1973 in New York.
Cellular mobile phone is a wireless telecommunication device that comes with inbuilt
mobility feature. Mobile communication technology allows mobile users to avail the
roaming facility. Cell phones / mobile phones are simple hand-held phones with built-
in antennas. Sender & receiver transmit their voice, which is converted into sound
waves, & then these waves travels through network to base station, from where it goes
to respective destination. Base Station is a transmit/ receive unit responsible for
controlling the transmission of a small geographical area called as a cell.
Figure 2.1 - Mobile Basics
Source : Tom Farley & Mark van der Hoek (2006)1
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2.2 MOBILE GENERATIONS
1st Generation (1G) – Analog system
2nd Generation (2G) – TDMA & CDMA ( Time & Code Division Multiple Access)
3 rd Generation (3G) – GSM 1800 MHz (Global System for Mobile Communications)
4th Generation (4G) – UMTs 1900 MHz (Universal Mobile Telephone System)
2.2.1 First Generation Cell Phones
In 1983, Motorola unveiled to the world, the first truly portable cellular phone. It was
called the Motorola DynaTAC 8000X. This particular phone took 15 years to come to
market at an expense of over 100 million dollars in research costs. From 1983 to the
end of the 1980's cell phones grew in popularity due to the innovations in cellular
networks that were able to handle phone calls in either one area or hand them off to
other areas. There were also a few models that came as briefcases, to hold large
batteries necessary to make phone calls.
2.2.2 Second Generation Cellular Phones
Cellular phones from the early 1990's are considered being second generation (2G)
and they were able to work on mobile phone systems such as GSM, TDMA and
CDMA. Digital mobile phone networks were in use in the United States in 1990 and
in Europe by 1991. 2G mobile phones use digital circuit switched transmissions. This
ultimately enabled quicker network signalling, lowering the amount of dropped calls
and increasing call quality. Advances in battery technology, as well as computer chip
technology also helped to make 2G cell phones much smaller than their predecessors.
With these innovations, cell phone usage soared.
2.2.3 Third Generation Cellular Phones
Third Generation cellular phones is the technology that is currently available today
and it is commonly referred to as 3G. While 3G came only a few years after 2G,
mainly due to many innovations in technology and services. Two main requirements
of 3G include 2 Megabits of maximum data rate indoors and 384 kbits for outdoor
use. 3G mobile phones usually include innovations to receive much more than phone
calls, for instance, mobile email and Internet access, streaming radio and mobile TV,
Wifi , and video calls . 3G allows simultaneous use of speech and data services, and
offers peak data rates of at least 200 kbit/s as per IMT- 2000 specifications.
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2.3 THE CELL PHONE BANG
Today, a cell phone isn't just a rich man's fashion accessory in India. It's transforming
the way millions of people do business in a country where even landlines were a
luxury barely a decade ago. Across the country people with low incomes are now
adopting cellular phones as tools for enhancing their business. Cell phone technology
introduces new senses of speed and connectivity to social life. If the fixed line
telephone has brought communication links into the workplace and homes, ‘mobile’
puts them into the hands of unprecedented numbers and varieties of individuals.
2.4 GLOBAL LANDSCAPE- MOBILE HANDSETS
All round the world cell phone sales have exceeded the expectations. In fact for
mature markets, including the United States, Western Europe and Japan, a
replacement sale was the strongest driver of growth in 2003. Colour screens and
camera phones were high on consumers' shopping lists, but there was also a high
level of demand for inexpensive voice centric handsets. In emerging markets like
China, India, Russia and Brazil, the sale was due to availability of low-priced
handsets and aggressive strategies by service providers to win subscribers.
According to IDC around 1388.2 million handsets were sold globally in 2010. Nokia
is leading in sales of mobile handsets with 32.6 5% market share, followed by
Samsung with 20.2% market share. Other leading manufactures include LG (8.4%),
ZTE (3.7%) and RIM (3.5%). Although Nokia leads mobile handset market, Samsung,
ZTE and RIM represent very high annual sales growth in comparison to Nokia.2
Table 2.1 - Top five global mobile phone manufacturers, by 2010
Rank Manufacturer Sales in Units Market share Annual sales growth
1 Nokia 453.0 million 32.6% 4.9%
2 Samsung 280.2 million 20.2% 23.3%
3 LG 116.7 million 8.4% -1.0%
4 ZTE 51.8 million 3.7% 94.0%
5 RIM 48.8 million 3.5% 41.4%
6 Others 437.7 million 31.5% 31.2%
Total 1388.2 million 100.0% 18.5%
Source: IDC Worldwide Quarterly Mobile Phone Tracker, January 27, 2011
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The success of smart phones has changed the face of the mobile sector and in 2011 it
is no longer possible to discuss this industry without acknowledging their impact. The
resilience of the mobile sector under such challenging market conditions can be partly
attributed to the continuing growth of smart phone sales, which now account for
around 20% of all handset sales on a global level. While the Apple iPhone is one of
the most high profile of the smart phones, in 2011 the Google Android Operating
System leads the iPhone in terms of global market share. Smart phones have become
particularly popular in the developed markets where they offer a more user-friendly
and interactive alternative; while this trend will continue for the near future, Asia,
particularly China, will lead the growth in the developing markets.3
2.5 GSM & CDMA TECHNOLOGY
Digital cellular networks are the need of wireless extensions to establish the
connection across the globe1. For performing the transmission among the mobile
users, it uses the concept of multiple accesses. Multiple access means simultaneous
transmission or access from many sources to one.
Multiple access transmission can be achieved through -
SDMA – Space Division Multiple Access
FDMA – Frequency Division Multiple Access
TDMA – Time Division Multiple Access
CDMA – Code Division Multiple Access
SDMA, FDMA & TDMA technologies are based on fixed assignment like frequency
and time duration. But CDMA is based on different codes to separate different users
in code space & so this technology allows multiple users to access the network
through the shared medium without any interference.
GSM – the Group Special Mobile was founded in 1982 to support the digital
transmissions & now popularly known as Global System for Mobile
Communications. GSM was primarily used to support the transmission to users in
roaming environment. GSM is today’s most successful digital telecommunication
system.
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2.6 GLOBAL SYSTEM FOR MOBILE COMMUNICATIONS (GSM)
GSM (Global System for Mobile Communications, originally Groupe Spécial
Mobile), is a standard set developed by the European Telecommunications Standards
Institute (ETSI) to describe technologies for second generation (or "2G") digital
cellular networks. Developed as a replacement for first generation analog cellular
networks, the GSM standard originally described a digital, circuit switched network
optimized for full duplex voice telephony. The standard was expanded over time to
include first circuit switched data transport, then packet data transport via GPRS.
Packet data transmission speeds were later increased via EDGE. The GSM standard is
succeeded by the third generation (or "3G") UMTS standard developed by the 3GPP.
GSM networks will evolve further as they begin to incorporate fourth generation
(or 4G) LTE Advanced standards. GSM is a trademark owned by the GSM
Association. The GSM Association estimates that technologies defined in the GSM
standard serve 80% of the global mobile market, encompassing more than 1.5 billion
people across more than 212 countries and territories, making GSM the most
ubiquitous of the many standards for cellular networks.4
Map 2.1- Global network coverage of GSM Cellular services
Source: http://www.worldtimezone.com/gsm.html
GSM 900/GSM 1800 MHz : Used in Europe, Asia, Australia, Middle East, Africa. GSM 850/GSM 1900 MHz : Used in the United States, Canada, Mexico and most countries of South America.
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2.7 THE STRUCTURE OF A GSM NETWORK
The network is structured into a number of discrete sections:
• The Base Station Subsystem (the base stations and their controllers).
• The Network and Switching Subsystem (the part of the network most similar to a
fixed network). This is sometimes also just called the core network.
• The GPRS Core Network (optional part that allows packet-based Internet connection)
• The Operations support system (OSS) for maintenance of the network.
Figure 2.2 – Structure of GSM network
Source: http://en.wikipedia.org/wiki/File:Gsm_structures.svg
Key Features of Global System for Mobile Communication (GSM) -
Noise Robust
Flexibility and increased capacity
International Roaming:
Improved Security and Confidentiality
Enhanced Range of Services.
Emergency calls (with/without SIM card inserted in MS)
Short Message Cell Broadcast
Dual Personal And Business Numbers & GPRS service
GSM together with other technologies is part of an evolution of wireless mobile
telecommunication that includes High-Speed Circuit-Switched Data (HSCSD),
General Packet Radio System (GPRS), Enhanced Data rate for GSM Evolution
(EDGE), and Universal Mobile Telecommunications Service (UMTS).
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2.8 EVOLUTION AND JOURNEY OF TELECOM INDUSTRY IN INDIA
Telephone services in India begun in a small scale with the commissioning of a
50-line manual telephone exchange in 1882 in Kolkata. This was less than five years
after the invention of the telephone by Alexander Graham Bell. India had approx.
82,000 telephone connections at the time of independence (1947) and by 1984 the
number of connections had slowly risen to 3.05 million. India's telecom network was
notoriously unreliable and only available to a small section of households along with
the corporate sector.
A telephone connection then was considered a luxury- with waiting time for a new
connection sometimes stretching to several months. Due to this, the tele-density levels
in the country were abysmally low. The telecom sector was a government monopoly
until 1994 when liberalisation gradually took place. As part of the liberalization, the
telecom sector was opened up for private operators in 1995.5
While all the major cities and towns in the country were linked with telephones during
the British period, the total number of telephones in 1948 was only around 80,000.
Even after independence, growth was extremely slow. The telephone was a status
symbol rather than being an instrument of utility. The number of telephones grew
leisurely to 980,000 in 1971, 2.15 million in 1981 and 5.07 million in 1991, the year
economic reforms were initiated in the country. Cellular service was launched in
November 1995 in Kolkata.6
The real transformation in scenario came with the announcement of the National
Telecom Policy in 1994. In 1997 the government set up TRAI (Telecom Regulatory
Authority of India).7 After March 2000, the government became more liberal in
making policies and issuing licenses to private operators. The government further
reduced license fees for cellular service providers. Because of all these factors, the
service fees finally reduced and the call costs were cut greatly enabling every
common middle class family in India to afford a cell phone. Nearly 32 million
handsets were sold in India. The data reveals the real potential for growth of the
Indian mobile market.
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A brief timeline of telecom evolution in India is given below-
Year Telecom Developments
1881 Government granted license to the Oriental Telephone Company Limited of England for opening telephone exchanges at Kolkata, Mumbai, Madras and Ahmadabad and the first formal telephone service was established.
1882 The exchange at Kolkata opened and named ‘Central Exchange’ which had 93 no. of subscribers. Telephone Exchange was installed in at Bombay also.
1902 1st-Wireless telegraph station established between Sagar Islands & Sandheads.
1907 1st Central Battery of telephones introduced in Kanpur.
1913 1st Automatic Exchange installed in Shimla.
1927 Radio telegraph between UK & India inaugurated,(Khadki & Daund) 1933 Radio telephone system inaugurated between the UK and India. 1953 12 Channel carrier system introduced. 1960 1st Subscriber trunk dialling route initiated between Kanpur & Lucknow. 1975 1st PCM system commissioned between Mumbai City & Andheri exchange. 1976 1st Digital microwave junction introduced.
1979 1st Optical fibre system for local junction commissioned at Pune.
1980 1st Satellite earth station for domestic communications established at Secunderabad.
1983 1st Analog Stored Program control exchange for trunk lines started at Mumbai.
1984 C-DOT established for indigenous development and production of digital exchanges.
1985 First mobile telephone service started on non-commercial basis in Delhi. 1994 National Telecom policy (NTP) was formulated 1995 GSM Services were started & Cellular service was launched in Kolkata. 1997 Telecom Authority of India (TRAI) was established 2000 BSNL was established through DoT 2002 CDMA technology and Internet Telephony was initiated 2004 Unified Access Licensing (UASL) regime was introduced 2004 Intra circle merger guidelines were established 2004 Broadband policy was formulated 2005 FDI limit was increased from 49 percent to 74 percent 2006 Number portability was proposed 2010 Mobile number portability was implemented across the country 2011 Introduced 3G services
Source: http://en.wikipedia.org/wiki/Communications_in_India
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2.9 STRUCTURE OF THE INDIAN TELECOM INDUSTRY
Currently, both public sector players as well as the private sector players are actively
catering to the rapidly growing telecommunication needs in India. Private
participation is permitted in all segments of the telecom industry, including ILD,
DLD, basic cellular, internet, radio paging, et al. The broad structure of the telecom
industry (in terms of service providers) is depicted in the diagram below:
Source : D&B Research
2.9.1 Public Sector
After the privatisation of VSNL in 2002, only two premier PSUs, MTNL and BSNL
operate in India and provide various telecom services. As noted earlier, MTNL
operates in Delhi and Mumbai and BSNL provides services to the remaining country.
In the post-liberalisation era, these PSUs not only have made significant progress but
also have provided stiff competition to their private counterparts.
2.9.2 Private Sector
Private operators have played a very crucial role in the growth of the
telecommunication industry, primarily in the mobile services. With the liberalisation
of the telecom industry, the private sector has been increasing its foothold in the
telecom services space. After the introduction of NTP-99, the contribution of private
players towards telecom services has witnessed rapid strides. While the private sector
is instrumental in providing both fixed line as well as wireless services, it is mainly
active in the wireless segment. Airtel, Idea, Reliance, Aircel, Tata Indicom, Vodafone
and Loop Mobile are major operators in India. However, rural India still lacks strong
infrastructure.
Figure 2.3- Structure of Indian Telecom Industry
Public Sector
Indian Telecom Industry
Private Sector
MTNL BSNL Indian Companies
Foreign Invested
Companies
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2.10 KEY TELECOM REGULATORY BODIES IN INDIA
2.10.1 TRAI (Telecom Regulatory Authority of India)
With the private companies and Government companies sharing markets of various
services in the telecom sector, necessity of an independent regulator to regulate the
activities of this sector and to protect consumer interests was felt. Accordingly, TRAI
came into existence in the year 1997 through an Act of Parliament. TRAI has been
vested with comprehensive powers and also has the responsibility of advising GOI
(Government of India) on all policy matter pertaining to the telecom industry.
TRAI has lay down standards of quality of service to be provided by the service
providers and ensure the quality of service and conduct the periodical survey of such
service provided by the service providers so as to protect interest of the consumers.
TRAI has defined various quality benchmarks parameters (i.e. call drop rate,
downtime etc.) to increase operation efficiency and to achieve high quality of mobile
services. TRAI safeguards the interests of the consumers through transparency,
ensuring conformity with service quality benchmarks, enforcing measures to
safeguard national security, fixing tariffs for players, counseling the government on
telecommunication development and tracking performance and efforts of all players
within the industry.8
2.10.2 DoT (Department of Telecommunications)
DoT is accountable for policy formulation, monitoring performance reviews, ensuring
international co-operation, overlooking research and development and granting
licenses to operators, allowing them to provide basic and value added services in
various cities and telecom circles as per the approved government policies. The
Department also allocates spectrum and manages radio communications in close
coordination with the International bodies. It is also responsible for enforcing wireless
regulatory measures & monitoring wireless transmission of all users in the country.9
2.10.3 Cellular Operators Association of India (COAI)
The Cellular Operators Association of India (COAI) was constituted in 1995 as a
registered, non-profit, non-governmental society dedicated to the advancement of
communication, particularly modern communication through Cellular Mobile
Telephone Services. With a vision to establish and sustain a world-class cellular
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infrastructure and facilitate affordable mobile communication services in India,
COAI's main objectives are to protect the common & collective interests of its
members. With a vision to establish and sustain a world-class cellular infrastructure
and facilitate affordable mobile communication services in India. Keeping the
mandate given to it, COAI is the official voice for the Indian Cellular industry and on
its behalf it interacts with the policy maker, the licensor, the regulator, the spectrum
management agency, the industry (telecom /non-telecom) associations.
2.11 SWOT ANALYSIS OF TELECOM MARKET IN INDIA
Strengths
• Huge wireless subscriber potential
• Fastest growing mobile market in the world
• Market for cutting edge services
• Govt. permits FDI limit in Telecom to 74%
• Unified license regime
Weaknesses
• Lowest call rate in the world Figure 2.4- SWOT Analysis of Indian
• Market strongly regulated by government body Telecom Market
• Too many authorities rule the sector
• Huge potential for low end and cheap handsets
• Wide scale Consumer churn in Telecom
Opportunities
• To offer value added services on GSM, CDMA and IP
• Language independent services
• Mobile Marketing concepts
• Content influenced by local culture and Global success stories
• Mobile-Commerce & Unified messaging platforms
• Foreign investment in form of equity or Technology
Threats
• Stiff competition and Low cost service
• Weak IPR protection
• Software and digital content Piracy
• Political instability
• Regulatory interference
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2.12 GSM SERVICE PROVIDERS IN INDIA
India primarily follows the GSM mobile system, in 900 MHz band. Recent operators
also operate in 1800 MHz band. India’s GSM operators added 6.52 million
subscribers in September 2011, taking the total number of users to 618.28 million,
according to data released by GSM body Cellular Operators’ Association of India
(COAI).10
The first operator is the state-owned incumbent BSNL, a government unit responsible
for provision of telephony services. Other dominant players are Vodafone, Bharti
Airtel, Tata Indicom, MTNL, Idea Cellular, Aircel, Reliance Infocomm, Uninor, Loop
Mobile, Etisalat, Videocon, etc.
Table 2.2 - GSM subscribers base of major telecom operators in India
Operator Total Subscribers Figures
Bharti Airtel 171,846,824 Vodafone Essar 144,144,031
IDEA 98,441,714 BSNL 90,622,219 Aircel 59,191,661 Uninor 27,738,154
Videocon 6,382,493 MTNL 5,298,081
Loop Mobile 3,181,967 S-Tel 3,433,988
Etisalat 1,477,495 All India 611,758,627
Source – COAI (Aug. 2011)
The country’s largest mobile operator Bharti Airtel added 1.15 million users in
August 2011, taking its total subscriber base to 171.84 million with 28.09 per cent
market share. Vodafone-Essar added 1.13 million subscribers in August and increased
its total user base to 144.14 million with a market share of 23.56 percent. Aditya Birla
group firm Idea Cellular added 2.33 million users during the month of august to take
its total user base to 98.44 million with 16.09 % market share, while Aircel added
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0.60 million customers to take its subscriber base to 59.19 million with 9.68% share
of the market.
State-run telecom firms Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar
Telephone Nigam Ltd (MTNL) serves 90.62 million and 5.29 million users with
14.81% and 0.87% market share respectively. Loop Mobile added 19035 new users in
August, taking its overall subscriber base to 3.18 million with 0.52% market share,
while STel lose 67,259 users during august with a hold of 0.56% market share. New
comers Uninor and Etisalat has market share of 4.53% and 0.24% respectively.
However, Videocon telecommunications struggle to acquire 1.04 % market share with
a major loss of 652,383 subscribers by end of August 2011.
India’s dual technology telecom operator Reliance Communications is leading in
terms of new subscriber additions. The operator added 1.52 million (GSM/CDMA)
users, taking its mobile subscriber base to 144.78 million by the end of July 2011.11
Graph 2.1–Percentage market share of GSM service
providers in India (Aug. 2011)
Source: TRAI
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2.13 AN OVERVIEW OF INDIAN TELECOM INDUSTRY
2.13.1 Growth of Overall Telecommunication Subscribers in India
In FY10 (financial year ended 31 March 2010), India’s service sector was estimated
to account for 56.9%3 of GDP, while the industrial sector and agriculture sector
contributed 28.5% and 14.6%, respectively, to GDP. Within the services sector, the
telecom sector has been the major contributor to India’s growth, accounting for nearly
3.6% 4 of total GDP in FY2010.12
The subscriber base of the public as well as private players has grown rapidly
post-liberalization. According to TRAI, the total subscriber base grew from FY00
through FY10 at a compound annual growth rate (CAGR) of 36.1% to reach 621.3
million subscribers. In the past decade, the total teledensity has risen above 50%, with
the mobile segment leading this growth.13
Source : TRAI
Such phenomenal growth can be attributed primarily to the country’s large
population, high economic growth, hyper-competition in the sector, affordable
handsets, reduced tariffs, infrastructure sharing and the introduction of positive and
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enabling regulatory reforms. Further, the introduction of the New Telecom Policy
(NTP-99), which enabled migration in the license fee payment mechanism from a
fixed regime to a revenue-sharing regime, provided a major boost to private sector
players. Moreover, initiatives such as shifting to a unified access licensing regime,
making incoming calls free, also drew significant growth in cellular subscriber base.
2.13.2 Growth of Wireless Subscribers in India
Telecommunication services in India can be divided into two broad segments,
wireline services and wireless services. On the whole, the Indian telecom industry has
made significant progress; however, this growth in terms of wireless and wireline
segments has undergone substantial change in the past few years. The wireline
segment, which accounted for a major share of the telecom industry during beginning
of the current decade, has witnessed a decline in its subscriber base in past few years.
The subscriber base of the wireline segment, which reached a peak of 41.54 million
during FY06, has witnessed a declining trend since then. The subscriber base of the
wireline segment has declined to 37 million in FY10 from its peak in FY06.14
On the other hand, the growth in subscriber base of the wireless segment has
increased substantially over these years. The wireless subscriber base in India grew
from FY2000 through FY10 at a compound annual growth rate (CAGR) of 77.5% 13
to reach 584.3 million15 subscribers in FY10. In the initial years of mobile telephony,
the growth in the number of subscribers was very low, with average monthly
subscriber additions in the range of 0.05–0.1 million subscribers. The advent of NTP
1999 paved the way for aggressive growth in the wireless subscriber base.
Source : TRAI
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Tele-density in India has significantly improved during the past few years and has
covered large portion of the country's population. Graph (2.5) clearly indicates the
growth of wireless telecommunication density over the wireline teledensity in last
decade (FY2000-10). Wireless teledensity has reached to 49.6% in FY 2010 from just
0.2% in FY 2000. However, the wireline teledensity has been declined to - 2.6 % in
FY2010 from its peak 22.7 % in FY 2001.
Source : TRAI
2.14 PRESENT SCENARIO OF CELLULAR SERVICES IN INDIA
2.14.1 Telephone Subscribers in India
The overall number of telephone subscribers in India increased to 892.55 Million at
the end of July 2011 from 885.99 Million at the end of June 2011, thereby registering
a growth rate of 0.74% and the overall tele-density in India reaches to 74.44 percent.
Out of overall 892.55 million telephone subscribers wire-line accounts for 34.18
million at the end of July 2011. The share of urban subscriber has marginally
increased to 75.40 per cent from 75.29 per cent, whereas the share of rural subscribers
has marginally declined to 24.60 per cent from 24.71 per cent.16
Source : TRAI
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2.14.2 Wireless (GSM, CDMA & FWP) Subscribers in India
Total Wireless subscriber base increased from 851.70 Million in June 2011 to 858.37
Million at the end of July 2011, registering a growth of 0.78 %. The share of Urban
Wireless subscriber has declined to 66.27% from 66.36% where as share of Rural
Wireless subscriber has increased from 33.64% to 33.73%. The overall wireless
tele-density in India reaches 71.59 by July 2011
Wireless subscription in Urban Areas increased from 565.71 million in the end of July
2011, from 562.12 million in June 2011. Rural Wireless subscription increased to
292.65 million from 289.57. This shows higher growth in Rural Wireless subscription
(1.05%) than Urban Wireless Subscription (0.64%). The Urban wireless tele-density
has increased to 156.59 from 155.96 and Rural tele-density increased to 34.92 percent
from 34.58 percent.
Private operators hold 88.27 per cent of the wireless market share whereas the two
PSU, Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd
(MTNL) hold only 11.73 per cent market share.17
Source : TRAI
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. In addition to landline and mobile phones, some of the companies also
provide the WLL service. GSM subscribers constitute about 84.1% of the tota
wireless subscriber base. Over an extended period, the gap between GSM and CDMA
has widened as the GSM subscriber base has grown more rapidly.
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Source : TRAI
The next few years are likely to witness a rapid expansion of the Indian mobile
market not only in terms of subscribers but also in technology and services. The
content service segment is growing at a rapid pace. It is believed to speed up further
in the future and become the most lucrative part of the market. Further, launch of
advanced telecom services, such as 3G, IPTV and mobile number portability (MNP)
also contributed in growth of the Indian telecom subscriber base. Today, India has the
fastest growing telecom network in the world with its high population and
development potential.
2.15 STATE-WISE USAGE OF MOBILE PHONES AND SERVICES IN INDIA
India is divided into 22 telecom circles. All above mobile service providers are active
in their licensed circle of telecommunication. The telecom circles are listed below-
1. Andhra Pradesh
2. Bihar & Jharkhand
3. Chennai
4. Delhi
5. Gujarat and Daman & Diu
6. Haryana
7. Himachal Pradesh
8. Jammu and Kashmir
9. Karnataka
10. Kerala and Lakshadweep
11. Kolkata
12. Orissa
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13. Punjab
14. Rajasthan
15. M.P. and Chhattisgarh
16. Maharashtra and Goa
17. Mumbai
18. North Eastern States (AP,Assam,Manipur,Meghalaya,Mizoram,Nagaland,Tripura)
19. Tamil Nadu excluding Chennai and Puducherry
20. Eastern Uttar Pradesh
21. Western Uttar Pradesh and Uttarakhand
22. West Bengal (excluding Kolkata), Andaman, Nicobar Islands & Sikkim
State wise analysis reflects that Uttar Pradesh is leading with highest Wireless
telecom subscriber base of 116,889,074 followed by Maharashtra with 101,065,519
Table 2.3 – Select State wise wireless subscriber base in India
State Wireless Subscriber Base
( March 2011)
Uttar Pradesh 116,889,074 Maharashtra 101,065,519
Tamil Nadu 72,763,544
Andhra Pradesh 62,560,974
West Bengal 65,829,685
Bihar 57,336,840
Karnataka 51,221,157
Gujarat 48,818,855
Rajasthan 44,473,945
Madhya Pradesh 48,134,232
Delhi 41,171,114
Kerala 32,757,390
Punjab 30,147,893
India 851,695,668
Source: http://en.wikipedia.org/wiki/Communications_in_India
Table 2.3 shows state-wise statistics of Mobile Phones per thousand populations in
India. Delhi is leading with 2458 numbers of Mobile Phones per thousand populations
followed by Punjab with 1088 number of Mobile Phones per thousand populations.
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Surprisingly Mobile Phones per thousand populations for Uttar Pradesh is low (586)
even being highest subscribers base. However, Bihar account for the lowest number
of Mobile Phones (552) per thousand populations.18
Graph 2.10 - State wise Mobile Phones per Thousand Population
Source: http://en.wikipedia.org/wiki/Communications_in_India
The booming domestic telecom market has been attracting huge amounts of
investments which is likely to accelerate with the entry of new players and launch of
new services. According to the Department of Industrial Policy and Promotion
(DIPP), the telecommunications sector which includes radio paging, mobile services
and basic telephone services attracted foreign direct investment (FDI) worth US$ 1.33
billion during April-January 2010-11. The cumulative flow of FDI in the sector
during April 2000 and January 2011 is US$ 10.26 billion.19
2.16 TOP 10 MOBILE HANDSET MANUFACTURERS IN INDIA
When it comes to revenues for the fiscal period 2010-11, Nokia still rules in India.
For all the talk about Nokia’s share slipping away, it has held its own. There isn’t a
drastic rise in Nokia’s revenues from the year before but there isn’t significant dip
either. At best, Nokia’s India growth has hit a plateau. India’s mobile handset as a
whole has grown by 15% to Rs. 33171 crores.
Top 10 manufacturers have contributed Rs. 23603 crores or 70% of the total revenues.
Nokia has contributed to 39% of the total pie. Other mobile handset makers who are
not in the top 10 list have generated a combined revenue of Rs. 10108 crores. 20
42
Graph- 2.11: Revenues of mobile handset manufacturers in India in year 2010-11
Source : http://thegadgetfan.com
Nokia made Rs. 12929 crores in the year 2010-11. Samsung has occupied a prominent
second position with Rs. 5720 crores. India’s homegrown mobile handset
manufacturer Micromax generated revenues of Rs. 2289 crores and is placed below
Samsung. G’Five has generated revenues of Rs. 1326 crores in 2010-11. LG, G’Five,
Karbonn, Spice, Maxx and Sony Ericsson are the other vendors in the top 10 list who
have revenues more than 600 crores.20
2.17 INCREASES IN NUMBER OF TELECOM TOWERS
The larger number of subscribers and service providers
has led to the mushrooming of telecom towers, especially
in metros and big cities. These towers contain mobile
base station equipment, which produces 900 and 1800
MHz pulsated waves. This has increased the
electromagnetic contamination- referred to commonly as
"Electrosmog" in urban centres. A number of scientific studies have been done which
warn us about danger posed by this electromagnetic contamination to the health of
humans and other living beings.21 The main reason for this is that cellular service
licences have been given to multiple service providers on the condition that they set
up their own towers. Initially, operators used their tower infrastructure for competitive
advantage. However, over the past few years, the leading operators have opted to
share their infrastructure. Today, there are an estimated 425,455 telecom towers in
India, implying a subscriber-per-tower ratio of 1,460.22
43
Table: 2.4 - State-wise Telecom Towers
States Public sector Private sector Towers Rajasthan 2,028 23,322 25,350 Gujarat, Daman and Diu 2,271 26,121 28,392 Maharashtra and Goa 3,608 41,494 45,102 Karnataka 2,154 24,766 26,920 Madhya Pradesh and Chhattisgarh 1,854 21,323 23,177 West Bengal, Orissa, Sikkim, Andaman and Nicobar 3,337 38,371 41,708
Assam and Arunachal Pradesh 720 8,275 8,995 Delhi, Haryana and Chandigarh 2,008 23,090 25,098 Uttar Pradesh and Uttarakhand 4,577 52,630 57,207 Andhra Pradesh 2,752 31,644 34,396 Punjab and Himachal Pradesh 1,512 17,387 18,899 Jammu and Kashmir 488 5,614 6,102 Tamil Nadu and Pondicherry 3,071 35,321 38,392 Bihar and Jharkhand 1,794 20,634 22,428 Nagaland, Meghalaya, Manipur, Mizoram and Tripura 369 4,242 4,611
Kerala and Lakshadweep 1,494 17,184 18,678Total 34,037 391,418 425,455
Source: “Growth of Telecom Sector,” Lok Sabha, http://loksabha.nic.in/, accessed 28 October 2010.
2.18 INDIAN TELECOM INDUSTRY ON THE GLOBAL MAP
The Indian telecom industry has grown rapidly during the last few years. India has the
third largest (based on the total number of fixed/mobile subscriber lines) telecom
network in the world and the second largest mobile network with 811.59 Million at
the end of March 2011. Indian telecom operators added a staggering 227.27 million
wireless subscribers in the 12 months between March 2010 and March 2011
averaging at 18.93 million subscribers every month.23
Source: http://en.wikipedia.org/wiki/Telecommunications Statistics in India
44
To put this into perspective, China which currently possesses the world's largest
telecommunications network added 119.2 million wireless subscribers during the
same period (March 2010 - March 2011) - averaging 9.93 million subscribers every
month. So, while India might currently be second to China in the total number of
mobile subscribers, India is adding nearly twice as many subscribers every month.
According to recent reports, India was purported to overtake China to become the
world's largest mobile telecommunications market by the year 2013. It was also
predicted that by 2013, the teledensity will shoot up to 75% and the total mobile
subscriber base would be a colossal 1.159 billion.24
Furthermore, projections by several leading global consultancies indicate that the total
number of subscribers in India will exceed the total subscriber count in the China by
2013. The industry is expected to reach a size of Rs 344,921 crore (US$ 73.47 billion)
by 2012 at a growth rate of over 26 per cent, and generate employment opportunities
for about 10 million people during the same period. According to analysts, the sector
would create direct employment for 2.8 million people and for 7 million indirectly.25
India has marked its presence among top three countries in the world with highest
number of mobile phones by year 2011. Globally, India rank second in number of
mobile phones and still enormously growing to take over number one ranked ‘China’.
Table 2.5 - Top ten Countries in Number of Mobile Phones in Use
Rank Country or region Number of mobile phones Population % of
population As on dated
World Over 5 billion 6,909,500,000 - 2010
1 China 886,300,000 1,341,000,000 67.1 April 20112 India 811,589,101 1,210,193,422 67.98 Mar.2011 3 United States 302,947,098 310,866,000 96 Dec 2010 4 Russia 220,550,000 142,905,200 151.9 Feb.2011 5 Brazil 212,600,000 190,732,694 110.35 April 20116 Indonesia 168,264,000 237,556,363 73.1 May 20097 Japan 107,490,000 127,370,000 84.1 Mar. 20098 Germany 107,000,000 81,882,342 130.1 Dec.2009 9 Pakistan 105,151,871 171,901,000 63.2 Feb 2011 10 Nigeria 90,583,306 140,000,000 64.7 Feb. 2011
Source: http://en.wikipedia.org... retrieved on 10 June 2011
45
There are many reasons for growth of mobile services in India. Its not only the cheap
prices of mobile handset but also world's lowest mobile tariffs (call rates ) in the
country has contributed to the phenomenon growth in mobile users and subscribers of
wireless telecommunication services in India. Following chart (2.12) highlights India
with world cheapest call tariff rates (0.02 USD) as compared to other countries where
in call tariff rates has been reached to 0.23 USD in year 2010
Source:- TID- Telecom India Daily (2010)
2.19 MOBILE SERVICE CHURN RATE
Mobile Service churn rate is an indicator of the willingness of customers to switch
operators. Compared to international markets, India has one of the highest annual
churn rates. Even though customers in India are unable to retain their mobile phone
number when they churn, the relatively high rate of churn indicates that MNP is not a
major barrier to switching operators.
Table: 2.6 – Country wise Churn rate
Country Churn rate 2004 Churn rate 2005 Australia 20.7% 20.4%
Hong Kong 41.4% 40.8% Singapore 16.5% 13.5%
UK 27.3% 30.6% Indonesia 76.2% 100.8%
China 19.2% 20.4% India 84.6% 68.7%
Sources: Sources: COAI Report (2006)
0.23 0.22
0.190.17 0.16
0.11 0.11 0.110.09
0.05 0.05 0.04 0.03 0.02
0
0.05
0.1
0.15
0.2
0.25
Belgium
Italy U
K
France
Brazil
Philippines
Taiwan
Argentina
Malayasia
Hong Kong
Thailand
Pakistan
China
India
Mobile Tariffs in US dollors
Grap h- 2.13 : Countrywise mobile service tariff ( Year- 2010)
46
Not only is churn in India high by international standards, it has generally trended
upwards in recent years with an average increase of 5 %. Graph (2.14) shows the
annual mobile churn rate from 1999 to 2005.26
Graph: 2.14- India annual mobile services churn rate
Source: COAI Report (2006)
Despite declining twice during the review period, the churn rate had increased
significantly to 68.7% in 2005 from 44.4% in 1999. Annual churn peaked at 84.6% in
2004, a year in which tariffs fell sharply as first Reliance and then the GSM operators
lowered their service charges. Even recent mobile services annual churn rate in India
is around 70 % which is quite large in comparison with other countries.26
2.20 MOBILE NUMBER PORTABILITY (MNP)
2.20.1 Mobile Number Portability in the World
When the introduction of MNP in America is reviewed, 30 million subscribers
were expected to switch the operators within the first year of MNP
introduction. However, only 7.8 million Americans switched from one carrier to
another (Shin, 2005). Some European countries delayed the implementation of
MNP for various reasons. For example, Germany postponed the initiation
because of the lack of appropriate technical solution. Also, Austria delayed the
introduction of MNP service for several times, (Shakouri et al., 2004). Nera (2003)
(National Economic Research Associates) examined the usage of MNP for
England and for the first two years after implementation, only 12% of subscriber
100% 90%
80% 70% 60% 50% 40% 30% Churn rate increasing 5% per year 20% 10% 0% 99 00 01 02 03 04 05
47
changed the operator. It is suggested that the difficulty of using MNP during the first
years after implementation may explain its unpopularity because porting a number
originally took an average of 25 days. When the delivery time was reduced to five
days on average, take-up increased to about 18% for residential customers and 80%
for businesses (Lyo ns, 2006). Researcher has tried to explore response to the Mobile
Number Portability around the world and summarized it in table given below-
Source:- Market Research report published by the Telecommunications Management Group, Inc. 2008
2.20.2 Mobile Number Portability in India
Mobile Number Portability (MNP) allows the subscribers to retain their existing
mobile telephone number when they move from one Access Provider to another
irrespective of the mobile technology or from one cellular mobile technology to
another of the same Access Provider, in a licensed service area. This move is
irrespective of the mobile technology or from one cellular mobile technology to
another of the same access provider, in a licensed service area. In other words, the
Mobile Service Subscriber can switch from CDMA to GSM as well as GSM to CDMA.
According to the mobile porting rules, each subscriber is locked for 90 days before he
/she opts for porting again. The facility of retention of existing mobile telephone
Table 2.7: Mobile Number Portability rate (%) in other countries
Ratio annual number of mobile ports to number of subscribers Country 2000 2001 2002 2003 2004 2005 2006 2007 Australia 1.9 4.2 6.5 6.6 7.4 6.1Austria 0.2 1 1.3 1.1Belgium 1.2 2.5 2.4 4.9 4.4 4.5Denmark 2.1 6.1 8 8.8 7.6 7.8 8.2Estonia 4 2.8 2.6Finland 6.6 24.2 27.8 9.7 7.4France 0.1 0.5 0.7 0.9 1.5
Germany 0.3 0.4 0.2 0.4 0.4Greece 0.1 0.4 1 1.5
Hongkong 27.3 31.9 14.9 14.4 13.5 14.5 16.3 14.4Iceland 1 5.3 6.2 6.1Ireland 1.2 4.4 6.6 6.5 7.1Israel 1.6Italy 0.6 2.3 3.5 4.3 4.8 4.7
Japan 2.1 2Netherlands 0.6 0.8 1.2 0.6 2.8 1.9 3.3 2.1
Norway 6 6.5 10.5 10 12.3 9.8 13.1 Sweden 0.6 2.1 2.6 4.4 6.2 6.5 5
Switzerland 1 1.7 2.1 1.3 1 1.5 2 1.5
48
number despite moving to a new telecom service provider helps the subscriber
maintain contact with his friends/clientele. Introduction of MNP also helps in
increasing competition between the service providers and acts as a catalyst for the
service providers to improve their quality of service. After the Long delays in
implementing mobile number portability, DoT has finally executed MNP on 25th Nov.
2010 through Syniverse Technologies and Telcordia Technologies.
Features of MNP in India
• MNP is allowed only within a given licensed service area or telecom circle;
subscribers moving from one circle to another are not allowed to port their number
• Subscribers are allowed to port their numbers only once in every 90 days
• Subscribers may be required to pay porting charges (if any) to the Recipient
Operator subject to a maximum of Rs. 19
• Prepaid subscribers would lose ‘balance talk time’, any non-refundable deposit
upon porting
• Post-paid subscribers to clear all bills issued prior to the date of porting request. In
case of non-payment of any dues to the Donor Operator, the ported number would
be disconnected by the Recipient Operator
• Recipient Operator should forward porting request to the MNP service provider
within 24 hours
• Donor Operator should give clearance to port the number within 4 days on
receiving request from MNP Service Provider
• On a date decided by the MNP Service Provider, the Donor Operator would be
instructed to disconnect the number within one hour; after that, the Recipient
Operator would be given one hour for activating the number of the subscriber
• Maximum time period for completing porting process – 7 days for all circles
except Jammu & Kashmir, Assam and North East, where the maximum time period
for completing porting process would be 15 days
• Recipient Operator to pay ‘port transaction charge’ of Rs. 19 per port to the MNP
Service Provider for processing the porting request in respect of a mobile number
• Operator to pay charges for use of MNP Service Provider’s Database for routing of
calls; these charges to be mutually negotiated between operators and MNP Service
Providers
49
As per the data reported by the service providers, by the end of March 2011 about
64.23 lakh subscribers have submitted their requests to different service providers for
porting their mobile number. Out of total requests around 4.33 lakh pertains to
Haryana wherein MNP was implemented from 25th Nov. 2010. In rest of the country,
in MNP Zone-I (Northern & Western India) maximum numbers of requests have been
received in Gujarat (6.17 lakh) followed by Rajasthan (5.49 lakh) whereas in MNP
Zone-II (Southern & Eastern India) maximum number of requests have been received
in Karnataka ( 5.29 lakh) followed by Tamil Nadu Service area(4.74 lakh).27
Table-2.8: Service Area Wise MNP Status at the end of March 2011
Service Area Number of Porting Requests Delhi 308,515 Gujarat 617,294 Himachal Pradesh 30,428 Haryana 433,680 Jammu & Kashmir 1,894 Maharashtra 440,509 Mumbai 228,692 Punjab 316,069 Rajasthan 549,258 Uttar Pradesh (East) 316,554 Uttar Pradesh (West) 374,414 Andhra Pradesh 401,988 Assam 17,762 Bihar 144,031 Karnataka 529,020 Kerala 212,658 Kolkata 167,237 Madhya Pradesh 414,511 North East 4,733 Orissa 109,203 Tamil Nadu 474,453 West Bengal 329,696
Total 6,422,599
Source : TRAI Press Release No. 35 /2011
Frequent occurrence of switching of cellular services by large number of subscribers
resulted in increased concerned for customer retention along with customer
acquisition. Companies with customer centric approach will only able to enjoy
subscribers’ switching of GSM services in long-term. The industry paradigm has
arguably changed from one of "make big networks, get customers" to "make new
50
services, please customers." In short, the industry has moved from an acquisition
orientation to a retention orientation. (Armstrong Gary, and Philip Kotler. 2001).28
According to Cellular Operators Association of India, based on porting figures by
March 2011, Idea and Vodafone are leading in gaining customer through number
portability with net additions 0.18% and 0.10% respectively. Airtel and Aircel are
also at benefit with net additions of 0.10% and 0.09% of subscribers respectively.
However, Reliance struggles to retain their customers with net loss of 0.24% in
subscribers base (306,417 subscribers) through Mobile number portability. Both
State-run telecom firms BSNL and MTNL feel the heat through MNP with net loss of
0.17% and 0.20% in their subscribers base respectively.29
Table 2.9 – Service provider wise number porting figures
Operators Total
Subscribersin Millions
SubscribersPorted In
Ported In %
SubscribersPorted Out
Ported Out %
Net Addition
Net Addition
%
Vodafone 127.36 488,250 0.38 295,489 0.23 192,761 0.15
Idea 84.29 391,191 0.46 240,402 0.29 150,789 0.18
Bharti Airtel 155.80 530,615 0.34 382,400 0.25 148,215 0.10
Aircel 51.83 162,664 0.31 117,822 0.23 44,842 0.09
Uninor 20.31 31,019 0.15 24,689 0.12 6,330 0.03
Videocon 6.01 5,404 0.09 11,633 0.19 -6,229 -0.10
MTNL 5.43 3,793 0.07 14,851 0.27 -11,052 -0.20
TTSL 86.05 197,404 0.23 236,793 0.28 -39,389 -0.05
BSNL 88.82 107,724 0.12 257,817 0.29 -150,093 -0.17
Reliance 128.87 44,753 0.03 351,170 0.27 -306,417 -0.24
Source: Press Release-Cellular Operators Association of India, (18th March 2011)
How well the operators take advantage of MNP would depend on how soon they
upgrade to customer centric marketing. There is a huge pressure on operators to
become creative marketers and focus on retention, customer loyalty and demonstrable
value. Adoption of more aggressive customer loyalty programs by the operators will
be the key to revenue enhancement and retention
51
2.21 INTRODUCTION OF KEY GSM PLAYERS IN INDIAN MARKET
Though the Indian telecom market has an enormous number of telecom operators, this
section intends to give an overview of some of the key telecom operators providing
GSM cellular service providers in India.
2.21.1 Bharat Sanchar Nigam Limited
Bharat Sanchar Nigam Limited
Type State-owned enterprise
Founded 19th century, incorporated 2000
Headquarters New Delhi, India
Key people Rakesh Kumar Upadhyay (CMD)
Products Fixed-line and mobile telephony, broadband and fixed-line internet services, IPTV and network services
Revenue 32,045 crore (US$7.15 billion) (2009-10)
Net income -1,822 crore (US$-0.41 billion) (2009–10)
Total assets 132,243 crore (US$29.49 billion) (2009–10)
Employees 299,840 (March 31, 2009)
Source : www.bsnl.co.in
The foundation of Telecom Network in India was laid by the British. Bharat Sanchar
Nigam Limited (BSNL) was formed on October 1, 2000 by corporatization of the
erstwhile Department of Telecom Services and Department of Telecom Operations.
BSNL is a government of India owned Public Sector Undertaking (PSU). It is the
largest PSU in the country and serves the entire length and breadth of India. The main
functions of BSNL include planning, engineering, installation, maintenance,
management and operation of voice and non-voice telecommunications services all
over the country. It has launched a nationwide mobile phone service under the brand
‘CellOne’ and internet telephony services under the brand name ‘Webfone’. BSNL
provides fixed, internet and cellular services in the country. BSNL is India's oldest
and largest Communication Service Provider (CSP). It has footprints throughout India
except for the metropolitan cities of Mumbai and New Delhi which are managed by
MTNL. As on August 2011, BSNL added 0.38 million users taking their subscriber
base to 90.62 million with 14.81 % market share.
52
2.21.2 Bharti Airtel
Bharti Airtel Limited
Type Public company, BSE: 532454, NSE: BHARTIARTL
Industry Telecommunications
Founded 7 July 1995
Founder(s) Sunil Bharti Mittal (Chairman) and (MD)
Headquarters New Delhi, India
Area served South Asia, Africa and the Channel Islands
Products Fixed-line, mobile telephony, broadband and fixed-line internet services, digital television, IPTV & network services
Revenue $9.290 billion (2010)
Operating income $2.313 billion (2010)
Profit $2.079 billion (2010)
Total assets $15.527 billion (2010)
Employees 22,858 (June 2011)
Parent Bharti Ent. (63.45%), SingTel (32.15%), Vodafone (4.4%)
Source : www. airtel.in
Bharti Airtel” formerly known as Bharti Tele-Ventures Limited (BTVL) is among
India's largest mobile phone and Fixed Network operators ,with more than 60 million
subscriptions as of 13th February 2008. It offers its mobile services under the Airtel
brand and is headed by Sunil Mittal. The company also provides telephone services
and Internet access over DSL in 14 circles. The company complements its mobile,
broadband & telephone services with national & international long distance services.
Airtel is the largest cellular service provider in India in terms of number of
subscribers. In 2007, Bharti Airtel signed MoU with Nokia-Siemens for a 900 million
dollar expansion of its mobile & fixed network. Airtel also started customized version
of Google search engine to provide an 'array of services' to its broadband customers.
Bharti Airtel added 1.15 million users in August 2011, taking its total subscriber base
to 171.84 million with 28.09 per cent market share.
53
2.21.3 IDEA Cellar
Idea Cellular Ltd.
Type Public, BSE: 532822, NSE: IDEA
Industry Telecommunications
Founded 1995
Headquarters Santacruz East, Mumbai, India
Key people Kumar Mangalam Birla , (Chairman)
Products Mobile telephony, Internet services
Revenue 15,389.00 crore (US$3.43 billion) (2011)
Operating income
2,879.33 crore (US$642.09 million) (2011)
Net income 844.60 crore (US$188.35 million) (2011)
Total assets US$5.334 billion (2010)
Employees 6,481 (2010)
Parent
Aditya Birla Group (49%), Axiata Group Berhad (15%) Providence Equity (10.5%)
Source : www. ideacellular.com
DEA Cellular is listed on the Bombay Stock Exchange and the National Stock
Exchange in March 2007. IDEA Cellular is part of the Aditya Birla Group, India's
truly multinational corporation. IDEA Cellular is a leading GSM mobile service
operator with pan India licenses. With a customer base of over 40 million in 15
service areas. Coverage of Orissa and Tamil Nadu circle made it possible to provide
pan India services covering over 90% of India's telephony potential. Idea was the first
to launch GPRS and EDGE in the country. Idea has received international recognition
for its path-breaking innovations when it won the GSM Association Award for "Best
Billing and Customer Care Solution" for two consecutive years. With over 60 per cent
market share in call centre solutions, the company is India’s leading voice
communication solutions provider. Its solutions range from converged voice and data
networks and customer relationship management solutions to unified messaging
solutions for enterprises.
Idea Cellular added with its subscriber base of 98.44 million claims 16.09 % market
share of wireless Telecommunication sector.
54
2.21.4 Vodafone Essar
Vodafone Group PLC
Type Public limited company
Traded as LSE: VOD NASDAQ: VOD Industry Telecommunications
Founded 1984 Headquarters London, United Kingdom Area served Worldwide Key people Gerard Kleisterlee (Chairman), Vittorio Colao (CEO) Products Fixed line, mobile telephony, Internet services, digital TV Revenue £45.88 billion (2011) Operating income
£5.596 billion (2011)
Profit £7.968 billion (2011) Total assets £151.22 billion (2011) Employees 83,862 (March 2011)
Source : www. vodafone.com
Vodafone Essar, previously Hutchison Essar is a cellular operator in India that covers
16 telecom circles in India Despite the official name being Vodafone Essar, its
products are simply branded Vodafone. It offers both prepaid and postpaid GSM
cellular phone coverage throughout India and is especially strong in the major metros.
Vodafone Essar provides 2G services based on 900 MHz and 1800 MHz digital GSM
technology, offering voice and data services in 16 of the country's 23 licence areas.
Initially, the company grew its business in the largest wireless markets in India - in
cities like Mumbai, Delhi and Kolkata. In these densely populated urban areas it was
able to establish a robust network, well known brand and large distribution network -
all vital to long-term success in India.
In 2007 Hutch becomes Vodafone. Hutch was often praised for its award winning
advertisements which all follow a clean, minimalist look. Another recent successful
ad campaign in 2003 with the tagline, Wherever you go, our network follows. The
simple yet powerful advertisement campaigns won it many admirers. Vodafone-Essar
added 1.13 million subscribers in August and increased its total user base to 144.14
million with a hold of 23.56 percent market share by August, 2011.
55
2.21.5 Reliance Communications
Reliance Communications Ltd.
Type Public, NSE: RCOM BSE: 532712
Industry Telecommunications
Founded 2004
Founder(s) Dhirubhai Ambani
Headquarters Navi Mumbai, Maharashtra, India
Area served India
Key people Anil Ambani, Hasit Shukla, (President)
Products Fixed-line and mobile telephony, broadband and fixed-line internet services, digital television, IT and network services
Revenue $4.774 billion (2010)
Net income $1.061 billion (2010)
Total assets $20.559 billion (2010)
Employees 28,065 (2010)
Source : www. rcom.co.in
Reliance Communications (formerly Reliance Infocomm), is the flagship company of
the Reliance –ADA Group, currently managed by Anil Dhirubhai Ambani. Reliance
Telecom's GSM cellular services are available in 340 towns within its eight-circle
footprint. Reliance's CDMA services are available in 19 states. It has also offered for
the first time in India, mobile data services through its R-World mobile portal.
Reliance Communications started laying 60000 route km of a pan-India fibre optic.
Reliance Communications has a high-capacity, integrated (both wireless and wireline)
and voice, data and video digital network. It is delivering a range of services spanning
the entire information and communication value chain, including infrastructure and
services, applications, and consulting. India’s single largest dual technology telecom
operator Reliance Communications is leading in terms of new subscriber additions.
The operator added 1.52 million (GSM/CDMA) users, taking its mobile subscriber
base to 144.78 million by the end of July 2011.
56
2.21.6 Aircel Group
Aircel group
Type Joint Venture
Industry Telecommunications
Founded 1999
Headquarters Chennai, India
Key people Sandip Das, CEO Gurdeep Singh, COO
Products Mobile telephony, Internet services,
Parent Maxis Communications (74%)
Source: www.aircel.com
The Aircel Group is a result of alliance between Maxis Communications Berhad of
Malaysia and Apollo Hospital Enterprise Ltd of India. It is a partnership of two
flourishing brands, each a leader on its own turf. The Aircel Group, formed in 1994,
offers affordable and outstanding mobile services to a vast subscriber base in India.
Aircel commenced operations in 1999 and became the leading mobile operator in
Tamil Nadu within 18 months. In December 2003, it launched commercially in
Chennai and quickly established itself as a market leader - a position it has held since.
It emerged a market leader in Assam and in the North Eastern provinces within 18
months of operations.
Aircel has won many awards and recognitions. Voice and Data gave Aircel the
highest rating for overall customer satisfaction and network quality in 2006.
Additionally, Tele.net recognised Aircel as the best regional operator in 2008.It is for
this reason that Aircel has committed itself to the cause of saving our tigers. Aircel
have partnered with WWF to create a Support Initiative Fund and to work in the
protected areas of the Brahmaputra Valley.
As on August 2011, Aircel added 0.60 million customers to take its subscriber base to
59.19 million with 9.68% share of the market.
57
2.21.7 Tata DOCOMO
Tata DoCoMo Limited
Type Joint Venture
Industry Telecommunications
Founded November 2008
Headquarters New Delhi, India
Area served India
Services Mobile network
Revenue invest US$175.6 million
Parent
Tata Teleservices (74%) NTT DoCoMo (26%)
Source: www. tatadocomo.in
Tata DOCOMO is Tata Teleservices Limited's telecom service on the GSM platform-
arising out of the Tata Group's strategic alliance with Japanese telecom major NTT
DOCOMO in November 2008. Tata Teleservices has received a license to operate
GSM telecom services in 19 of India's 22 telecom Circles-and has also been allotted
spectrum in 18 telecom circles
Tata DOCOMO has also become the first Indian private operator to launch 3G
services in India, with its recent launch in all the nine telecom Circles where it bagged
the 3G license. With 3G, Tata DOCOMO stands to redefine the very face of telecoms
in India. On the CDMA platform, despite being the latest entrant, Tata Indicom has
already established its presence and is the fastest-growing pan-India operator.
Incorporated in 1996, Tata Teleservices is the pioneer of the CDMA 1x technology
platform in India. Today, Tata Teleservices Ltd, along with Tata Teleservices
(Maharashtra) Ltd, serves over 84 million customers in more than 450,000 towns and
villages across the country, with a bouquet of telephony services encompassing
Mobile Services, Wireless Desktop Phones, Public Booth Telephony and Wireline
Services.
58
2.21.8 Uninor
Uninor
Type Joint Venture
Industry Telecommunications
Founded 2009
Headquarters Gurgaon, India
Key people Sigve Brekke (MD)
Products Wireless, Telephone, Internet
Owner(s) Telenor Group (67.25%) Unitech Group (32.75%)
Employees 2,000
Website Uninor.in
Source : www. uninor.in
Uninor combines the forces of India’s second largest real estate company Unitech Ltd
and Norway-based Telenor, the 6th largest mobile communications group in the
world. The joint venture combines Unitech's strong presence as a trusted corporation
in the Indian market with Telenor's successful experience at building and managing
best-in-class mobile operations.
The Telenor Group has proven itself to millions of customers around the world over a
long period of time. With over 150 years of telecom experience, the group is now
present in more than 14 countries worldwide and over 40,000 employees across the
globe. As India's second largest diversified real estate major with over 30 years of
presence across locations nationwide, the Unitech Group comes into this joint venture
as a partner with decades of consumer facing experience in the Indian market.
Uninor hold a pan-India UAS license to offer mobile telephony services in each of
India’s 22 circles and also received spectrum to roll out these services in 21 of 22
circles. As on August, 2011 Uninor serves 27.73 million subscribers with 4.53 %
market share in India.
59
2.21.9 Etisalat
Emirates Telecommunication Corporation
Type Public company (ADX: Etisalat)
Industry Telecommunications
Founded 5 October 1976
Headquarters Abu Dhabi, United Arab Emirates
Area served Worldwide
Key people Mohammed Hassan Omran Chairman Mohammed Al Qamzi CEO
Products Telephone, Internet, broadband Internet, mobile phone, IP VPN
Revenue AED 31.9 billion (2010)
Net income AED 7.6 billion (2010)
Total assets AED 42.6 billion (2010)
Employees 11,000 (2009)
Source : http://www.etisalat.ae.
Etisalat is one of the largest telecommunications companies in the world and the
leading operator in the Middle East and Africa, headquartered in the UAE. Etisalat
operates in 18 countries across Asia, the Middle East and Africa, servicing over
100 million customers.
Etisalat is a comprehensive telecommunications provider offering a one-stop shop for
mobile and fixed-line voice and data services, ISPs, content providers and mobile
operators. It offers a variety of hi-tech complimentary services, SIM card
manufacturing, and voice and data transit. Etisalat provides GSM, Internet, NGN
fixed and mobile broadband services into the Middle East, Asia and Africa. Etisalat
has 525 roaming agreements connecting 185 countries enabling Black Berry, 3G and
voice roaming.
60
Etisalat is a major investor in Thuraya, one of the world’s leading satellite geo-mobile
communication systems. It has been named ‘Best Overall Operator’ in the Middle
East six times since 2006 and was named Best International Carrier at the World
Communications Awards in 2008.
In India, as on August 2011, Etisalat serves 1.48 million GSM subscribers with 0.24%
market share.
2.21.10 Videocon Telecommunications
Videocon Telecommunications Limited.
Type Limited
Industry Telecommunications
Headquarters Mumbai, India
Products Mobile Telecommunication
Parent Videocon Group
Source : www.videocon.com
Videocon Telecommunications Limited, a Videocon group company offers GSM
mobile services GSM service under the brand name Videocon. The services are
already up and running in Tamil Nadu (including Chennai), Punjab*, Haryana,
Mumbai, Gujarat, Kerala, Madhya Pradesh, UP East, UP West, Himachal Pradesh and
soon will be present across the country.
However, currently Videocon telecommunications struggle to acquire 1.04 % market
share with a major loss of 652,383 subscribers in the month of August 2011.Videocon
serves around 6.38 million subscribers in India.
61
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