effect of training in telecom industry

8/7/2019 effect of training in telecom industry

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The telecom industry has been divided into two major segments, that is, fixed and wirelesscellular services for this report. Besides, internet services, VAS, PMRTS and VSAT also have

been discussed in brief in the report.

In todays information age, the telecommunication industry has a vital role to play.Considered as the backbone of industrial and economic development, the industry has beenaiding delivery of voice and data services at rapidly increasing speeds, and thus, has beenrevolutionising human communication.

Although the Indian telecom industry is one of the fastest-growing industries in the world,

the current teledensity or telecom penetration is extremely low when compared with globalstandards. Indias teledensity of 36.98% in FY09 is amongst the lowest in the world. Further,the urban teledensity is over 80%, while rural teledensity is less than 20%, and this gap isincreasing. As majority of the population resides in rural areas, it is important that thegovernment takes steps to improve rural teledensity. No doubt the government has takencertain policy initiatives, which include the creation of the Universal Service Obligation Fund,for improving rural telephony. These measures are expected to improve the rural tele-densityand bridge the rural-urban gap in tele-density.

Introduction - Evolution

Indian telecom sector is more than 165 years old. Telecommunications was first introduced inIndia in 1851 when the first operational land lines were laid by the government near Kolkata(then Calcutta), although telephone services were formally introduced in India much later in1881. Further, in 1883, telephone services were merged with the postal system. In 1947,after India attained independence, all foreign telecommunication companies werenationalised to form the Posts, Telephone and Telegraph (PTT), a body that was governed bythe Ministry of Communication. The Indian telecom sector was entirely under governmentownership until 1984, when the private sector was allowed in telecommunication equipment

manufacturing only. The government concretised its earlier efforts towards developing R&D inthe sector by setting up an autonomous body Centre for Development of Telematics (C-DOT) in 1984 to develop state-of-the-art telecommunication technology to meet the growingneeds of the Indian telecommunication network. The actual evolution of the industry startedafter the Government separated the Department of Post and Telegraph in 1985 by setting upthe Department of Posts and the Department of Telecommunications (DoT).

The entire evolution of the telecom industry can be classified into three distinct phases.

Phase I- Pre-Libralisation Era (1980-89)

Phase II- Post Libralisation Era (1990-99)

Phase III- Post 2000

Until the late 90s the Government of India held a monopoly on all types of communications as a result of the Telegraph Act of 1885. As mentioned earlier in the chapter, until theindustry was liberalised in the early nineties, it was a heavily government-controlled andsmall-sized market, Government policies have played a key role in shaping the structure andsize of the Telecom industry in India. As a result, the Indian telecom market is one of themost liberalised market in the world with private participation in almost all of its segments.The New Telecom Policy (NTP-99) provided the much needed impetus to the growth of thisindustry and set the trend for libralisation in the industry.


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Current Status

Globalisation has made telecommunication an integral part of the infrastructure of the Indianeconomy. The telecom sector in India has developed as a result of progressive regulatoryregime.

According to the TRAI, the total gross revenue of the Indian telecom services industry was Rs1,524 bn in FY09 up from Rs 1,291 bn in FY08 registering a growth of 18.03% over FY08 andits subscriber base grew by 43% over FY08 to touch 429.70 mn subscribers in FY09.


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Role in Indias Development

Contribution to GDP

According to the UNCTAD, there is a direct correlation between the growth in mobileteledensity and the growth in GDP per capita in developing countries, which tend to have a

high percentage of rural population. The share of the telecom services industry in the totalGDP has been rising over the past few years (the telecom sector contribution in GDP went upfrom 2.52% in FY05 to 2.83% in FY07).

Employment

The Indian telecommunication industry employs over 400,000 direct employees and about85% of these employees are from government-owned companies. The ratio of number ofsubscribers to employees, an indication of efficiency and profitability, is much higher forprivate companies than for government companies.


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Foreign Direct Investment (FDI)

Foreign direct investment has been one of the major contributors in the growth of the Indian

economy, and therefore, the need for higher FDI is felt across sectors in the Indian economy.The telecom sector has played a crucial role in attracting FDI in India. The share of telecomsector in the total FDI inflows in India has gone up to 10% in FY09 as compared with just 3%in FY05.

The telecom sector requires huge investments for its expansion as it is capital-intensive andFDI plays a vital role in meeting the fund requirements for expansion of the telecom sector.Telecom accounts for almost 10% of the total FDI inflows in the country and has been thethird-largest sector to attract FDI in India in the post-liberalisation era

The Indian telecom industry has been an attractive avenue for foreign investors over theyears. As per DIPP figures, the cumulative FDI inflow during August 1991 to June 2009period, in the telecommunication sector amounted to US$ 113 bn. FDI calculation takes intoaccount radio paging, cellular mobile and basic telephone services in the telecommunicationsector.


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In the 2004-05 Budget, the government raised the FDI limit from 49% to 74% in the telecomservices segment subject to retention of local management control. According to the newnorms, 26% share out of the 74% should be held by an Indian company or an Indian citizenwith Indian management. Further, 100% FDI is permitted in telecom manufacturing,category I infrastructure providers, ISPs without gateway, call centres and IT-enabledservices. Further, direct or indirect FDI up to 74% is permitted subject to licensing andsecurity requirements for ISPs with gateways, radio paging operators and category II

infrastructure providers.

The relaxation in FDI norms has attracted many foreign telecom majors to the sector. Thepresence of foreign players has not only encouraged faster infrastructure development andupgradation but also has opened up the domestic industry to foreign competition. Since2004, there has been a large inflow of FDI in the sector. During 2004-05 and 2005-06, aperiod during which the FDI norms were relaxed, the FDI inflow grew by an astounding 300%to US$ 624 mn in 2005-06 from merely US$ 125 mn in 2004-05. The inflow of FDI hasprovided tremendous impetus to the sector in the past few years and the attractiveness ofthe sector has kept the FDI inflows growing steadily. During FY09 the FDI in the telecomsector at US$ 2,558 mn was 103% higher than that seen in FY08 at US$ 1,261 mn. Further,the FDI in the sector has already reached US$ 2010 mn for a six month period of FY10 (Apr-Sep 09) and is expected to surpass the total FDI for FY09.

The governments liberalised FDI policies have resulted in several foreign companies enteringinto the Indian markets. The influx of foreign players in the Indian telecom industry has ledto capacity creation, and better infrastructure, which in turn has bettered the networkquality. The rise in FDI has also enabled technology transfer, market access and hasimproved organisational skills; going forward, FDI could be used for providing telecomservices to rural areas, where teledensity is still very low.

The change in FDI policy that has raised the FDI limit from 49% to 74% for the sector hasmade it more attractive for foreign players. In the long run the growth prospects of telecomplayers that have foreign partners will improve and other players will get new avenues toraise capital.

Growth of IT-ITeS and Financial Sector

India has entered the league of countries with the most-advanced telecommunicationinfrastructure after the industry was deregulated. Furthermore, deregulation has stimulatedIndias economic growth through industry growth and through rise in investments. It isevident that a well-developed communication sector improves access to social networks,

lowers transaction costs, increases economic opportunities, widens markets, and providesbetter access to information, healthcare and educational services. The growth in Indiantelecom sector has been concomitant with overall growth in GDP, government revenue,employment et al. Besides, telecommunication has increased efficiency, reduced transactioncosts, attracted investments and has created new opportunities for business andemployment.

The NTP-99 was particularly helpful for the ITeS-BPO industry as it ended the government

monopoly in international calling by introducing IP telephony. After the introduction of IPtelephony, there was rapid growth in the number of data processing centres andinbound/outbound call centres, which ultimately led to the outsourcing revolution in India.

The telecom sector has been instrumental in creating jobs for a vast pool of talented andknowledge professionals in the IT and ITeS-BPO industry, which thrives on reliabletelecommunication infrastructure. India has become an important outsourcing destination forthe world and the boom in this sector also has transformed Indias economic dynamics. Theevolution of telecom sector has brought about a revolutionary change in the way somebusinesses operate.


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Another beneficiary of the telecom revolution is the financial services industry, which hasbeen on a growth trajectory. The progress and quality of the financial sector has been a keyfactor that has driven the pace and diversity of the real economy. India has an extensive andwell-developed financial sector with wide and sophisticated banking network. Banking in Indiahas become service-oriented, and has matured greatly from the days of walk-in customers tothe present situation when banks have migrated to a 24-hour banking platform to attractcustomers; however, this disintermediation in the business has led banks to be extremely

prudent in terms of their internal operations and has led them to adopt newer products anddelivery channels. Further, with introduction of internet & mobile banking the long ques atthe banks are slowly becoming a thing of the past.

Both the financial and the IT-ITeS segments rely on good domestic as well as internationalnetwork connectivity; therefore, there is a need for a sound telecommunication network.

Factors Facilitating Growth of the Sector

The phenomenal growth in the Indian telecom industry was brought about by the wirelessrevolution that began in the nineties. Besides this, the following factors also aided the growthof the industry.

Libralisation

The relaxation of telecom regulations has played a major role in the development of theIndian telecom industry. The liberalisation policies of 1991 and the consequent influx ofprivate players have led the industry on a high growth trajectory and have increased thelevel of competition. Post-liberalisation, the telecom industry has received more investmentsand has implemented higher technology.

Increasing Affordability of Handsets

The phenomenal growth in the Indian telecom industry was predominantly aided by themeteoric rise in wireless subscribers, which encouraged mobile handset manufacturers toenter the market and to cater to the growing demand. Further, the manufacturers introduced

lower-priced handsets with add-on facilities to cater to the increasing number of subscribersfrom different strata of the society. Now even entry-level handsets come with features likecoloured display and FM radio. Thus, the falling handset prices and the add-on features havetriggered growth of the Indian telecom industry.

Prepaid Cards Bring in More Subscribers

In the late nineties, India was introduced to prepaid cards, which was yet another milestonefor the wireless sector. Prepaid cards lured more subscribers into the industry besideslowering the credit risk of service providers due to its upfront payment concept. Prepaid cardswere quite a phenomenon among first-time users who wanted to control their bills andstudents who had limited resources but greater need to be connected. Pre-paid cards greatlyhelped the cellular market to grow rapidly and cater to the untapped market. Further, the

introduction of innovative schemes like recharge coupons of smaller denominations and lifetime incoming free cards has led to an exponential growth in the subscriber base.

Introduction of Calling Party Pays (CPP)

The CPP regime was introduced in India in 2003 and under this regime, the calling party whoinitiated the call was to bear the entire cost of the call. This regime came to be applicable formobile to mobile calls as well as fixed line to mobile calls. So far India had followed theReceiving Party Pays (RPP) system where the subscriber used to pay for incoming calls from


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both mobile as well as fixedline networks. Shifting to the CPP system has greatly fuelled thesubscriber growth in the sector.

Changing Demographic Profile

The changing demographic profile of India has also played an important role in subscriber

growth. The changed profile is characterised by a large young population, a burgeoningmiddle class with growing disposable income, urbanisation, increasing literacy levels andhigher adaptability to technology. These new features have multiplied the need to beconnected always and to own a wireless phone and therefore, in present times mobiles areperceived as a utility rather than a luxury.

Increased Competition & Declining Tariffs

Liberalisation of the telecom industry has fuelled intense competition, especially in thecellular segment. The ever-increasing competition has led to high growth of subscribers andhas put pressure on tariffs, which have seen a sharp drop over the years. When the cellularphones were introduced, call rates were at a peak of Rs 16 per minute and there were

charges for incoming calls too. Today, however, incoming calls are no longer charged andoutgoing calls are charged at less than a rupee per minute. Thus, the tariff war has come a

long way indeed. Increased competition and the subsequent tariff war has acted as a majorcatalyst for attracting more subscribers. Apart from these major growth drivers, an improvednetwork coverage, entry of CDMA players, growth of value-added services (VAS),advancement in technology, and growing data services have also driven the growth of theindustry.

Outlook

The telecom industry in India has experienced exponential growth over the past few yearsand has been an important contributor to economic growth; however, the cut-throatcompetition and intense tariff wars have had a negative impact on the revenue of players.Despite the challenges, the Indian telecom industry will thrive because of the immensepotential in terms of new users. India is one of the most-attractive telecom markets because

it is still one of the lowest penetrated markets. The government is keen on developing ruraltelecom infrastructure and is also set to roll out next generation or 3G services in thecountry. Operators are on an expansion mode and are investing heavily on telecominfrastructure. Foreign telecom companies are acquiring considerable stakes in Indiancompanies. Burgeoning middle class and increasing spending power, the governments thruston increasing rural telecom coverage, favourable investment climate and positive reforms willensure that Indias high potential is indeed realised.


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he Indian telecom industry has undergone significant structural transformation since itsliberalisation in the 1990s. During the last decade, the Indian telecom industry has evolvedinto a multi-segment, competitive market from a small supplier-dominated market havingpublic sector monopoly. Coherent Government policies have played a crucial role in shapingthe structure of the Indian telecom sector.

Structural Evolution of the Indian Telecom Industry:

Telecom Sector in the Pre-liberalisation Era (1980-1990):

Before liberalisation, the public sector held a monopoly in provision of telecom services. Theentire telecom services operation in the country was carried out by the Department ofTelecommunication (DoT), a public sector entity established in 1985. It managed theplanning, engineering, installation, maintenance, management, and operations of telecomservices for the whole of India. In order to ease out its operations, two new public sectorcorporations viz. MTNL and VSNL were set up under the DoT in 1986. Thus, before the entry

of the private players, the telecom services were provided by three public entities viz. DoT,MTNL and VSNL. While MTNL primarily looked after the operation of basic telephony services

in Delhi and Mumbai, VSNL provided international telecom services in India. DoT looked afterbasic telephony operations in regions other than Delhi and Mumbai. Prior to liberalisation thetelecom services were broadly classified as domestic basic (which included basic telephony,telex and fax), domestic value-added services (VAS) which covered all other services such aspaging, cellular, data services, VSAT and international basic and VAS.

Telecom Sector in the Post-liberalisation Era:

Private sector participation in the Indian telecom sector has been a gradual process, whereinthe government initially permitted players from the private sector to provide Value AddedServices (VAS) such as Paging Services and Cellular Mobile Telephone Services (CMTS),followed by the Fixed Telephony Services (FTS) or Basic services. Eventually the privatesector has been allowed to provide almost all telecom services. Liberalisation process in the

telecom services market began in 1992, with the unbundling of the domestic basic servicesand the domestic VAS and entry of private players for providing the VAS such as cellular andpaging services. During this period, the government provided licenses to private playersaccording to the services that were to be provided in the specified areas of service provision.The country was divided into circles (or categories) on the basis of economic potential. Thus,primarily these divisions were mostly adjoining the states of India. Such demarcations wereprimarily responsible for existence of various regional players in provision of telecomservices. During 1994, through a competitive bidding process, licenses were granted to 8CMTS operators in four metros, 14 CMTS operators in 18 state circles, paging operators in 27cities and 18 state circles.

After the domestic VAS, the basic services were opened up to private players. The NationalTelecom Policy (NTP) 1994, which endeavoured to build world-class telephone services inIndia and aimed at providing telephones on demand, enabled the entry of private players in

the provision of basic services. Given the need for resources in addition to governmentsources for achieving the targets of NTP-94, private investments and involvement of theprivate sector was considered inevitable to bridge the resource gap. Thus, the privateoperators were allowed to render basic services in the local loop. Initially, the provision ofbasic services had been deliberated as a duopoly between a selected service provider and theDoT. In line with this, policy licences were awarded to 6 BTS operators in 6 state circles.

The need for independent regulation had risen with the entry of private players. Also, to fulfilthe commitments made when India joined the World Trade Organisation (WTO) in 1995, the


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Telecom Regulatory Authority of India (TRAI) was established in 19971 to regulate telecomservices including fixation/revision of tariffs. The establishment of TRAI was a positive step interms of separation of regulations from policy making and operations, which continued to beunder the purview of the DoT2.

Further, in 1998, the Government also declared the policy for Internet Service Provision (ISP)by private operators and had even begun licensing of the same around that time.Subsequently the Global Mobile Personal Communications by Satellite (GMPCS) was alsoopened up for the private players.

Although the private players had been allowed to participate in many telecom servicessegments, the results of privatisation had not been satisfactory entirely. Thus, a NewTelecom Policy (NTP-99) was announced on March 26, 1999, which came into effect fromApril 1, 1999. The NTP 1999 not only provided a major fillip to private sector participation inthis industry but also laid down the path for significant development of the Indian telecomindustry. The NTP 1999 allowed private operators providing cellular and basic service tomigrate from a fixed licence fee regime to a revenuesharing regime to make the operationsof the private players financially viable. This policy change provided the muchneeded relief to

private players who were earlier burdened with huge debts that they had to service owing totheir licence fee commitments. Another notable provision of the Act had been the entry of

multiple private sector operators in the sector in contrast to the policy of duopoly practicedearlier. This not only increased competition in the industry but also assisted the privateplayers to attract new investment and augment their subscriber base. The entry of privateoperators in the cellular sector helped to reduce the operational cost of the industry. It alsoreduced the mobile tariffs and provided a much needed boost to the industry. The Act alsomade the following provisions: it permitted interconnectivity and sharing of infrastructureamong various service providers within same areas of operations; it allowed both voice anddata traffic by service providers; it opened up national long distance (NLD) and internationallong distance (ILD) services to competition et al. Thus, the NTP 1999 can be viewed as thegenesis of the cellular revolution being witnessed in India.

The NTP 99 had also enunciated to separate the policy and licensing functions of the DoTfrom the service providing functions to ensure a level-playing-field among private operatorsand incumbents. Accordingly, as a predecessor to corporatisation, two new departments viz.

Department of Telecom Services (DTS) and the Department of Telecom Operations, werecarved out of DoT, to separate the service provision and operational functions of DoT. Laterin 2000, DTS was corporatised and renamed as Bharat Sanchar Nigam Ltd (BSNL), and thusthe functions of the incumbent service provider were separated from that of the policymaker. DoT is now responsible for policy-making, licensing and promoting privateinvestments in both telecom equipment manufacturing and in telecom services. Subsequentlyin 2002, even VSNL was privatised and its monopoly in ILD services was terminated (fromMarch 31, 2002).

Current Structure of the Indian Telecom Industry:

Currently, both public sector players as well as the private sector players are actively cateringto the rapidly growing telecommunication needs in India. Private participation is permitted in

all segments of the telecom industry, including ILD, DLD, basic cellular, internet, radiopaging, et al. The broad structure of the telecom industry (in terms of service providers) isdepicted in the diagram below:


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Public Sector:

After the privatisation of VSNL in 2002, only two premier PSUs, MTNL and BSNL operate inIndia and provide various telecom services. As noted earlier, MTNL operates in Delhi andMumbai 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 competitionto their private counterparts.

Private Sector:

Private operators have played a very crucial role in the growth of the telecommunicationindustry, primarily in the mobile services. With the liberalisation of the telecom industry, theprivate 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 haswitnessed rapid strides. While the private sector is instrumental in providing both fixed lineas well as wireless services, it is mainly active in the wireless segment. The fixed linesaccount for only about 2% of private sector's total subscriber base. While some privateplayers have a pan-India presence, there are many regional players that cater to only certainservice areas.

Change in Market Share:

The subscriber base of the public as well as private players has grown rapidly post-liberalisation. The subscriber base of telecom industry grew from around 18.68 mn duringFY98 to 429.72 mn during FY09 and a significant proportion of this growth has emanatedfrom the private sector. The private players registered an absolute growth of around 339.30mn in subscriber base during FY98-FY09. This could be largely attributed to rapid growth in

mobile subscriber base of the private players. With the gradual opening up of the telecomindustry, the private players have been able to garner strength and improve their hold on thetelecom service provision. Further, the introduction of the New Telecom Policy (NTP-99),which enabled migration in the license fee payment mechanism from a fixed regime to arevenue-sharing regime, provided a major boost to private sector players. Moreover,initiatives such as allotting third and fourth cellular licenses, shifting to a unified accesslicensing regime, execution of calling party pays (CPP) regime, making incoming calls free,also drew significant growth in the cellular subscriber base.


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Although the subscriber base of public entities has also expanded, it has grown at a muchlower rate as compared with private players. During 1998-2008, the subscriber base of PSUoperators grew by merely 71.72 mn. The public sector has witnessed sustained depletion inits share in the total subscriber base over the years, as it has been on a comparatively lowergrowth trajectory.

The share of private sector in the total subscriber base has increased substantially from 4.7%in FY98 to 79.2% in FY09. Even though these figures signify the dominance of the privatesector in terms of subscriber base, it is important to note that the prominence of private andpublic sector service providers varies in different segments of the telecommunicationindustry.

Segments in the Telecommunication Industry:

Telecommunication services in India can be divided into two broad segments, wirelineservices and wireless services. While the wireline services include the fixed line telephony,


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wireless services comprise mobile, WLL (F) and WLL (M). On the whole, the Indian telecomindustry has made significant progress; however, the source of emergence of this growth interms of wireless and wireline segments has undergone substantial change in the past fewyears. The wireline segment, which accounted for a major share of the telecom industryduring beginning of the current decade, has witnessed a decline in its subscriber base in thelast 2 years. The subscribe base of the wireline segment, which reached a peak of 41.54 mnduring FY06, has witnessed a declining trend since then. The subscriber base of the wireline

segment has declined to 37.96 mn in FY09 from its peak in FY06. On the other hand, thegrowth in subscriber base of the wireless segment has increased substantially over theseyears. The subscriber base of the wireless segment has increased from around 6.70 mn inFY02 to as much as 391.76 mn in FY09. Over these years, not only the number of wirelesssubscribers but also the pace of its growth has increased substantially.

Other telecommunication services such as internet services, broadband services, VSAT, also

have evolved gradually and have become an integral part of the Indian telecom industry.Thus, broadly the Indian telecommunication industry can be classified into the followingsegments:

Wireline services

Wireless service: GSM and CDMA

Internet services

Public Mobile Radio Trunked Services

Global Mobile Personal Communication by Satellite (GMPCS)

Very Small Aperture Terminals (VSAT)

Mobile Value Added Services

Wireline Services

The wireline segment includes basic wireline services rendered to households, commercial

units and to service providers such as public call offices. While the incumbent PSUs havebeen the dominant players in wireline service, some private players have been graduallymaking their presence felt in this segment. As on March 31, 2008, 5 licensed private operatorgroups were providing wireline connections in addition to the incumbent BSNL and MTNL.


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Market Share in Terms of Subscriber Base

BSNL and MTNL have been key players in the wireline service. Even though private playershave been allowed to participate in fixed services since 1994, they only have around 13%contribution in the fixed line subscriber base (as on March 31, 2009). Though private playerslike Bharti and Reliance have registered notable growth, the Government-owned BSNLdominates the segment in terms of subscriber base. The public sector companies enjoy afirst-mover advantage in this segment and this is likely to have helped them seize asubstantial share in the wireline market and maintain their dominance in this segment. Thepublic sector accounts for almost 87% of the subscriber base of the fixed line services (as onMarch 31, 2009); however, over the years, the share of private sector has witnessed someimprovement.

Wireless Services

Wireless services can be further divided into Global System for Mobile Communications(GSM) and Code Division Multiple Access (CDMA). The WLL (F) is operated under the CDMAtechnology. The GSM services, which account for 73% of the total subscriber base of thewireless service, dominate the wireless segment.


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Wireless Subscriber Market Share: Service Wise (GSM & CDMA)

The wireless services have witnessed significant growth in the past few years. India primarilyfollows the GSM mobile system, in the 900 MHz and 1800 MHz band. The 900 MHz band hasgreater transmission characteristics, thereby enabling lower capital expenditure for expansionof coverage area as the number of towers and base stations required are lesser as comparedto the 1800 MHz band.

The wireless services segment of the telecom industry clocked an annual average growth ofaround 63.79% during FY05- FY09. India has overtaken the USA to become the second-largest wireless network in the world, and is second only to China, with the addition of about8 million subscribers every month in the recent times. By end of FY09, the wireless industryhad touched the 391.76-mn-subscriber-mark. This total subscriber base of FY09 comprise of297.26 mn GSM subscribers and 94.50 mn CDMA subscribers. During FY09, around 130.69mn subscribers were added in the wireless segment of the telecommunication industry.

Private sector players have played an important role in the rapid growth of the wirelesssegment. The private players account for around 86% of the total wireless subscriber base.While public sector has been instrumental in the development of the wireline service, thegrowth in wireless subscriber base for these entities has been relatively slower compared tothe private players. Currently 12 wireless service providers (including 2 PSUs) exist andcompete in different regions. However, only 2 private players, Bharti and RelianceCommunications, have nationwide presence along with state-owned entities, MTNL and BSNL,which together represent an additional pan-India presence. Many players have been takinginitiatives to expand operations across the country. The GSM sector is dominated by playerssuch as Airtel, Vodafone-Essar, and Idea Cellular, while the CDMA sector is dominated byReliance and Tata Indicom. Bharti Airtel is the largest GSM mobile operator in India and has a

subscriber base of 93.92 million followed by Vodafone-Essar, BSNL and Idea Cellular with asubscriber base of 68.77 mn, 46.71 mn and 38.89 mn, respectively. Reliance Communicationis the largest CDMA mobile operator with a subscriber base of 52.65 mn followed by TataTeleservices and BSNL that have a subscriber base of 35.12 million and 5.44 million,respectively. Only Reliance Communication and Tata Teleservices offer both GSM and CDMAnetworks.


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In addition to the internet subscribers, around 117.82 mn wireless data subscribers alsoaccess the internet through wireless (GSM and CDMA) networks; in fact, broadbandconnections also have witnessed significant growth in the past few years. According to theBroadband Policy 2004, the broadband connection is an always-on internet access with aminimum speed of 256 Kbps from the Internet Service Providers (ISP) Node to the customerpremises equipment (CPE). The broadband subscriber base has surged to around 6.20 mn byend March 09 as against 0.18 mn at end March 05, registering a CAGR of around 142%

during this period.

As at end March 2009, there were around 95 broadband service providers. However, around96.95% of the total broadband subscriber base was accounted for by the top 10 players. Infact BSNL alone accounts for almost 57.24% of the total broadband subscriber base.

Internet telephony


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Internet telephony is growing at a steady pace in India. According to the existing licensingpolicy, PC-to-PC internet telephony calls are allowed without any restriction. A PC or adaptercan be used to call Public Switched Telephone Network (PSTN) / Public Land Mobile Network(PLMN) abroad; however, Internet telephony calls from such devices to PSTN/PLMN in Indiaare not permitted. The Internet telephony has been permitted to all ISPs with effect fromAugust 24, 2007. A total of 34 ISPs provided Internet telephony services in India (as on thequarter-ended March 31, 2009).

Public Mobile Radio Trunked Services

Public Mobile Radio Trunking Service (PMRTS) is an easy-to-use two-way radiocommunication, mainly used for command and control and group talking while on the move.PMRTS is used mostly in hotels, tour agencies, airports and hospitals among other places.Sixteen operators provide PMRTS in India (as on March 31, 2009).

Global Mobile Personal Communication by Satellite (GMPCS)

GMPCS services allow a subscriber to communicate from any point on earth through ahandheld terminal. Under these services, the telephone numbers of users remain unchanged,irrespective of their location. GMPCS services have been operational in India since 1999. Ason date, there is no licence for providing GMPCS service in India.

Very Small Aperture Terminals (VSAT)

VSAT is a communication system in which the radio signals are received and transmitted

through a satellite. VSAT has a less than 3 meter tall dish antenna that relays data to thesatellites in the geosynchronous orbit, which then relays data from terminals on earth toother terminals and hubs located in various parts of the world. It is an economical and viableoption to connect different geographical locations. It provides connectivity to the pointswhere regular systems or wired lines fail to reach and last mile connectivity is difficult toachieve. VSATs are mostly used for various types of communications as well as to transferbroadband data such as VoIP, satellite Internet and video or narrowband data such aspolling, SCADA (Supervisory Control and Data Acquisition), credit cards transactions andRFID (Radio Frequency Identification). In India the VSAT services market is growing rapidly.Currently, 9 VSAT service providers are offering VSAT services in India.


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Mobile Value added Services (MVAS)

Over the last few years, Mobile VAS has gained significance as it has been emerging as apotential alternative revenue stream. VAS enables the subscriber to use the mobile phone fora host of purposes such as for sending short messages, pictures, to surf the Internet, formobile banking including mobile payments, to read news headlines, astrology, to listen tomusic, to play games and to seek various other types of information. Provision of VAS iseither directly done by the telecom operators or by a third party VAS Provider (VASP).Services such as SMS, GPRS are provided directly by the telecom operators and others suchas astrology, ring back tunes are provided by the VASPs. In most cases, the contents usedfor providing VAS are sourced from content providers/content developers or copyright ownersknown as content owners. Bulk of VAS services currently being provided by the mobileoperators in India are in the form of SMS, ringtone and caller ring back tones (CRBT).

1 TRAI was established with effect from February 20, 1997 by an Act of Parliament, called theTelecom Regulatory Authority of India Act, 1997

2 The TRAI Act was amended by an ordinance, effective from January 24, 2000, establishinga Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT) to take over theadjudicatory and disputes functions from TRAI.

effect of training in telecom industry

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