growth of telecom sector in india

8/3/2019 Growth of Telecom Sector in India

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TABLE OF CONTENTS

1. Introduction 012. Evolution of the Telecom Sector 023. Telecom Policy Environment in India 044. Telecommunication Marketing A Conceptual Framework 075. Objectives of Telecommunication Marketing 096. Nature of Telecom Sector in India 107. FDI Investment in Telecom in India 118. Industry Revenue 149. Major Investments 1610.Future Prospects 1911.Challenges 2012.Suggestions & Conclusion 2113.Micro Analysis Bharti Airtel Limited 22

13.1. Bharti Airtel Introduction 2413.2. Changes in Taglines & Logo by Airtel Brand 2513.3. Core Values of Airtel 2613.4. Goals/Objectives 2613.5. Business Units 2613.6. SWOT Analysis 2713.7. Analysis of Product Life Cycle 2813.8. Value Chain Analysis 2913.9. Conclusion & Recommendations 29

14.Report on Survey Conducted 30

15.Bibliography 31


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INTRODUCTION

The Telecom Industry is one of the fastest growing industries in India. India has

nearly 200 million telephone lines making it the third largest network in the worldafter China and USA. With a growth rate of 45%, Indian telecom industry has thehighest growth rate in the world.

Talking of telecommunications sector in India today, we can primarily identify twosegments namely Fixed Service Provider (FSPs) and Cellular Services. Some of theessential and basic telecom services forming part of Indian telecom industry includetelephone, radio, television and Internet. Telecom industry in the country lays aspecial emphasis on some of the advanced and the latest technical innovations like

GSM ( Global System for Mobile Communications), CDMA (Code DivisionMultiple Access), PMRTS (Public Mobile Radio Trunking Services), Fixed Line andWLL (Wireless Local Loop ). Especially, India has a flourishing market in GSMmobile service, while the number of subscribers is on rapid and dramatic increase.

The Indian telecommunications industry boasts as being one among the most rapidlygrowing chunks on the globe. Experts around the world estimate that India holds thepromise of emerging as the second largest telecom market of the World.

This project focuses on the developments and innovation made in the Indian telecomsector. The main topics covered in the project are nature of telecom sector, FDIinvestment in telecom sector, current scenario and the challenges faced by Indiantelecom sector and the future aspects in telecom sector, the market structure and themajor players in Indian telecom sector.

The project also depicts a detailed study on Bharti Airtel Limited


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EVOLUTION OF THE TELECOM SECTOR

Evolution of the Telecom Sector :

Pre-1991 1991-1994 1994 - 2002

Telegraph Act

1885

Creation of DOT-

1985

MTNL & VSNL

were set up-1986

Telegraph Act

1885

Creation of DOT-

1985

MTNL & VSNL

were set up-1986

Cellular Phone

Services were

opened up to

private sector-1994

National Telecom

Policy-1994

Cellular Phone

Services were

opened up to

private sector-1994

National Telecom

Policy-1994

1997 : TRAI was

set up

NTP 1999

TDSAT-2000

BSNL formed

2001

FDI - 49 %

1997 : TRAI was

set up

NTP 1999

TDSAT-2000

BSNL formed

2001

FDI - 49 %

Broadband

policy 2004

FDI - 74% 2005

Broadband

policy 2004

FDI - 74% 2005

2002 -2007

Up to1994

Upto2002

Up to1991

Upto2007

History of Indian Telecommunications started in 1851 when the first operational landlines were laid by the government near Calcutta (seat of British power). Telephoneservices were introduced in India in 1881. In 1883 telephone services were mergedwith the postal system. Indian Radio Telegraph Company (IRT) was formed in 1923.After independence in 1947, all the foreign telecommunication companies werenationalized to form the Posts, Telephone and Telegraph (PTT), a monopoly run bythe government's Ministry of Communications. Telecom sector was considered as astrategic service and the government considered it best to bring under state's control.

The first wind of reforms in telecommunications sector began to flow in 1980s whenthe private sector was allowed in telecommunications equipment manufacturing. In1985, Department of Telecommunications (DOT) was established. It was anexclusive provider of domestic and long- distance service that would be its ownregulator (separate from the postal system). In 1986, two wholly government owned companies were created: the Videsh Sanchar Nigam Limited (VSNL) forinternational telecommunications and Mahanagar Telephone Nigam Limited (MTNL)for service in metropolitan areas.


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In 1990s, telecommunications sector benefited from the general opening up of theeconomy. Also, examples of telecom revolution in many other countries, whichresulted in better quality of service and lower tariffs, led Indian policy makers toinitiate a change process finally resulting in opening up of telecom services sector forthe private sector. National Telecom Policy (NTP) 1994 was the first attempt to give

a comprehensive roadmap for the Indian telecommunications sector. In 1997,Telecom Regulatory Authority of India (TRAI) was created. TRAI was formed to actas a regulator to facilitate the growth of the telecom sector. New National TelecomPolicy was adopted in 1999 and cellular services were also launched in the same year.

Telecommunication sector in India can be divided into two segments: Fixed ServiceProvider (FSPs), and Cellular Services. Fixed line services consist of basic services,national or domestic long distance and international long distance services. The stateoperators (BSNL and MTNL), account for almost 90 per cent of revenues from basic

services. Private sector services are presently available in selective urban areas, andcollectively account for less than 5 per cent of subscriptions. However, privateservices focus on the business/corporate sector, and offer reliable, high- end services,such as leased lines, ISDN, closed user group and videoconferencing.

Cellular services can be further divided into two categories: Global System forMobile Communications (GSM) and Code Division Multiple Access (CDMA). TheGSM sector is dominated by Airtel, Vodfone Hutch, and Idea Cellular, while theCDMA sector is dominated by Reliance and Tata Indicom. Opening up ofinternational and domestic long distance telephony services are the major growthdrivers for cellular industry. Cellular operators get substantial revenue from theseservices, and compensate them for reduction in tariffs on airtime, which along withrental was the main source of revenue. The reduction in tariffs for airtime, nationallong distance, international long distance, and handset prices has driven demand.


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TELECOM POLICY ENVIRONMENT IN INDIA

Liberalization

The process of liberalization in the country began in the right earnest with theannouncement of the New Economic Policy in July 1991. Telecom equipmentmanufacturing was de-licensed in 1991 and value added services were declared opento the private sector in 1992, following which radio paging, cellular mobile and othervalue added services were opened gradually to the private sector. This has resulted inlarge number of manufacturing units been set up in the country. As a result most ofthe equipment used in telecom area is being manufactured within the country. A

major breakthrough was the clear enunciation of the governments intention ofliberalizing the telecom sector in the National Telecom Policy Resolution of 13thMay 1994.

National Telecom Policy, 1994

In 1994, the Government announced the National Telecom Policy which definedcertain important objectives, including availability of telephone on demand, provisionof world class services at reasonable prices, improving Indias competitiveness inglobal market and promoting exports, attractive FDI and stimulating domesticinvestment, ensuring Indias emergence as major manufacturing/export base oftelecom equipment and universal availability of basic telecom services to all villages.It also announced a series of specific targets to be achieved by 1997.

Telecom Regulatory Authority of India (TRAI)

The entry of private service providers brought with it the inevitable need forindependent regulation. The Telecom Regulatory Authority of India (TRAI) was,thus, established with effect from 20th February 1997 by an Act of Parliament, called

the Telecom Regulatory Authority of India Act, 1997, to regulate telecom services,including fixation/ revision of tariffs for telecom services which were earlier vestedin the Central Government.

TRAIs mission is to create and nurture conditions for growth of telecommunicationsin the country in manner and at a pace, which will enable India to play a leading rolein emerging global information society. One of the main objectives of TRAI is toprovide a fair and transparent policy environment, which promotes a level playingfield and facilitates fair competition. In pursuance of above objective TRAI has

issued from time to time a large number of regulations, orders and directives to dealwith issues coming before it and provided the required direction to the evolution of


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Indian telecom market from a Government owned monopoly to a multi operator multiservice open competitive market. The directions, orders and regulations issued covera wide range of subjects including tariff, interconnection and quality of service aswell as governance of the Authority.

The TRAI Act was amended by an ordinance, effective from 24 January 2000,establishing a Telecommunications Dispute Settlement and Appellate Tribunal(TDSAT) to take over the adjudicatory and disputes functions from TRAI. TDSATwas set up to adjudicate any dispute between a licensor and a licensee, between twoor more service providers, between a service provider and a group of consumers, andto hear and dispose of appeals against any direction, decision or order of TRAI.

New Telecom Policy, 1999

The most important milestone and instrument of telecom reforms in India is the NewTelecom Policy 1999 (NTP 99). The New Telecom Policy, 1999 (NTP-99) wasapproved on 26th March 1999, to become effective from 1st April 1999. NTP-99 laiddown a clear roadmap for future reforms, contemplating the opening up of all thesegments of the telecom sector for private sector participation. It clearly recognizedthe need for strengthening the regulatory regime as well as restructuring thedepartmental telecom services to that of a public sector corporation so as to separatethe licensing and policy functions of the government from that of being an operator.It also recognized the need for resolving the prevailing problems faced by theoperators so as to restore their confidence and improve the investment climate.

Key features of the NTP 99 include:

Strengthening of regulator

National long distance services opened to private operators.

International Long Distance Services opened to private sectors.

Private telecom operators licensed on a revenue sharing basis, plus a one-timeentry fee.

Direct interconnectivity and sharing of network with other telecom operatorswithin the service area was permitted.

Department of Telecommunication Services (DTS) corporatized in 2000.

Spectrum Management made transparent and more efficient.

All the commitments made under NTP 99 have been fulfilled; each one of them, inletter and spirit, some even ahead of schedule, and the reform process is nowcomplete with all the sectors in telecommunications opened for private competition.


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Mobile Number Portability (MNP)

Mobile Number Portability (MNP) allows subscribers to retain their existingtelephone number when they switch from one access service provider to anotherirrespective of the mobile technology or from one technology to another of the same

or any other access service provider. The Government has announced the guidelinesfor Mobile Number Portability (MNP) Service License in the country on 1st August2008 and has issued a separate License for MNP service w.e.f. 20.03.2009. TheDepartment of Telecommunication (DoT) has already issued licenses to two globalcompanies (M/s Syniverse Technologies Pvt. Ltd. and M/s MNP InterconnectionTelecom Solutions India Pvt. Ltd.) for implementing the service.

MNP is to be implemented in Delhi, Mumbai, Maharashtra & Gujarat service areas ofZone 1 and Kolkata, Tamil Nadu including Chennai, Andhra Pradesh & Karnataka

service areas of Zone 2 within six months of the award of the license i.e. by20.09.2009 and in rest of the service areas within one year of the award of the licensei.e. by 20.03.2010.


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TELECOMMUNICATION MARKETING ACONCEPTUAL FRAMEWORK

Policy of Government of India :

FDI in telecom recently revised to 74%.Government gets 15% of revenues from Unified Licensing

Regulator

Licensor

Judiciary

Telecom RegulatoryAuthority of India

Telecom DisputeSettlement Appellate

Tribunal

Dept of Telecom Unified License Operators

Fixed Line Operators

GSM

900 &1800MH Z

Wireless Operators

National Long Distance

Operators

International Long DistanceOperators

CDMA

1800

MHZ

Ministry of Communication & Information Technology

Telecommunication services play an incremental role in the multi-dimensionaldevelopment activities. A well functioning telecommunication network is an essentialcomponent of economic infrastructure. The application of modern marketingprinciples in the telecommunication service would make ways for the generation ofprofits and at the same time would also make the services affordable to the users atlarge.

Telecommunication marketing focuses our attention on marketing servicesprofessionally and this makes it a managerial process. The marketing professionalsbear the responsibility of managing the services which enrich the service profile oftelecom in order that the world class services are made nationally and internationallycompetitive.


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In view of the above, we observe the following facts regarding

telecommunications marketing:

Telecommunications marketing is a managerial process that helps an organizeddevelopment of the telecommunication services.

It is an organized effort to formulate a sound marketing mix for the telecom

services. It is a social process to help the individuals and institution in activating the

process of social transformation. Besides, the social costs shouldered and thesubsidized and concessional services to be offered to the selected segments ofusers are given due weightage.

It is a planned development process that makes possible an optimaldevelopment of telecommunication services.

It is a device to develop a new perception of services by offering innovative,competitive and profit-oriented services.


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OBJECTIVES OF TELECOMMUNICATION

MARKETING To make possible qualitative improvements in the service profile

It is right to mention that except a few almost all the service generatingorganization are required to improve the quality of their service profile. Themarketing professionals make a strong application of marketing principles andwould activate the process of qualitative transformation. The applicationprocess would make possible innovation which would help in designing a

sound product portfolio. The services would be of world class which would beefficacious in motivating the prospects and users. The marketing informationsystem would help professionals in developing a sound information base thatwould let them know the changing needs and requirements of users. Thus thequality of service would be improved.

To make possible quantitative improvements

In a country like India, it is significant those communications networks arechannelized to all the regions so that almost all segments of the society get anopportunity to avail the services. It is advocated that application of marketingprinciples would make the organization commercially viable and financiallysound which would energize the process of development and expansion. Wefind relevance of information even to the agricultural sector of the economy.This makes it essential the telecommunication services are made available toall the regions.

The cost effectiveness is made possible

Economy in operation is considered essential to make the services affordable tothe user as well as profitable to the information selling organizations. Theapplication of modern marketing principles make possible cost effectivenesssince the marketing professionals bear the responsibility of optimizing the costof offering the services. There is no doubt that by conceptualizing marketing,the telecommunication organizations would be successful in regulating theunproductive costs & expenses in a better way thus making the process costeffective.


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NATURE OF TELECOM SECTOR IN INDIA

Supply: Intense competition has resulted in prompt service to the subscribers.

Demand: Given the low penetration levels in the country and continuouslyfalling tariffs, demand will continue to remain higher in the foreseeable futureacross all the segments.

Barriers to entry: High capital investments, well-established players whohave a nationwide network, license fee, continuously evolving technology andfalling tariffs.

Bargaining power of suppliers: Improved competitive scenario andcommoditization of telecom services has led to reduced bargaining power forservices providers.

Bargaining power of customers: A wide variety of choices available to

customers both in fixed as well as mobile telephony has resulted in increasedbargaining power for the customers.

Competition: Competition has intensified with the entry of new cellularplayers in select circles. Reducing tariffs will hurt the new entrants as they willbe unable to recover their high capital investments.


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FDIINVESTMENTS IN THE TELECOMSECTOR IN INDIA

The Indian telecom industry has always allured foreign investors. In fact, thecumulative FDI inflow, from August 1991 to March 2007, in the telecommunicationsector amounted to US$ 7,513.22 million. This makes telecommunication the third-largest sector to attract FDI in India in the post liberalization era. The investment wasmajorly in handset manufacturing and telecom service provider.

The common perception is that FDI levels in the telecom sector are very high. It alsoreveals that despite the fact that FDI limits were raised from 49% to 74% five years

ago; foreign investors have not utilized the higher investment ceiling.

In addition, foreign telecoms have given the 3G auctions a miss. This has wiped outthe possibility of a large chunk of fresh FDI inflow and also reduces the auctionspotential to generate telecom minister A Rajas original revenue target of Rs 40,000crores.

Among the nine bidders, Vodafone accounts for the highest FDI at 70.9%, whichincludes Vodafones investments and some of Essars own foreign investments. Thesecond largest FDI is in Aircel with its foreign investor Global CommunicationServices Holding (GCSH) owning 64.9%. Deccan Digital, which owns 34.9%, is inturn, also held 25% by GCSH.

So in that sense, the exact foreign holding in Aircel is closer to 74% through directand indirect routes. The other two bidders with leading foreign investments areEtisalat and S Tel. Etisalat Mauritius holds 44.73% in Etisalat India with DelphiInvestments holding 4.27%, totaling 49%. Bahrain-based BMIC Ltd owns 42.7% ofthe 49% FDI in S Tel.

Bharti Airtel and Idea both have roughly 40% FDI. Pestel Ltd is Bhartis largestforeign investor with a 15.5% holding, followed by foreign FIs, foreign companiesand shareholders who own 17.9% FDI. Idea has FDI of 40.5% through TMI and P5Asia Investments.

Tatas have an FDI of 34.1%, mostly through NTT Docomo, which is the singlelargest foreign investor at 26.5%.The only bidder that has 100% Indian investmentbut barely any 2G operations is Videocon. Reliance Communications also has a verylarge chunk of its total investment held by Indian promoters.

While foreign investments coming in after the 3G bidding is over is a possibility, the


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lack of foreign investors interest in 3G bidding or even investing up to the full 74%FDI limit in 2G operations should be of concern to the government.

In fact, Telenor, one of the major new foreign investors is staying away from 3Gauctions altogether. FIs had made it clear in 2008 that 3G bid conditions presented

huge entry barriers to new entrants in general and foreign investors in particular.Despite this, a year after the first set of guidelines were issued, the 3G entry normswere not adequately altered, resulting in nine bidders joining the race for three pan-India 3G licenses but without any new Indian or foreign investor in contention.

FDI in Telecom Sector in India :


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INDUSTRY REVENUE (2002-2010)

According to a Frost & Sullivan industry analyst, by 2012, fixed line revenues areexpected to touch US$ 12.2 billion while mobile revenues will reach US$ 39.8 billionin India. India has become the second country in the world to have more than 100million CDMA-based (code division multiple access) mobile phone subscribers afterthe US, which has 157 million CDMA users. The Indian telecommunications industryis on a growth trajectory with the GSM operators adding nearly 9 million newsubscribers in April 2009, taking the total user base to 297 million, a growth of 3.11per cent over the additions made the previous month.

Name Current Trends

(In 2010)

Projected Trends

(In 2015 )

Population of India(Approx. )

120 Crore 135 Crore

Mobile Users (Approx. ) 584.32 Million Over 1 Billion

Number of Players

(Approx. )

13 5-6 Players

Market Size (Approx. ) 100,000 Rs. Crore 344,921 Rs. Crore

Growth Rate (Approx. ) 16 % Over 26 %

Employment to People

(Approx. )

4 Million 10 Million

TeleDensity 52.74 % 70 %

Internet Users 81 Million 120 Million

Internet Penetration 7 % 18 %

Contribution to Indias

GDP.

3 % 15 %

Quick Facts : Next Super Power India (March, 2010 )

8.75

Million

Broadband

Subscription

52.74Overall

Teledensity

36.96

Million

Wireline

Subscription

584.32

Million

Wireless

Subscription

(With 20.31

Million New

Addition )

621.28

Million

Total Telephone

Subscriber

Base

8.75

Million

Broadband

Subscription

52.74Overall

Teledensity

36.96

Million

Wireline

Subscription

584.32

Million

Wireless

Subscription

(With 20.31

Million New

Addition )

621.28

Million

Total Telephone

Subscriber

Base


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Market structure of India- Telecom Circles :

Metrocircles

(major cities*): Mumbai

New Delhi

Kolkata

B circles (regions with

smaller urban

areas and towns):

Haryana Punjab

Rajasthan

Uttar Pradesh (East) Uttar Pradesh (West) West Bengal

A circles (regions that

include other large cities):

Andhra PradeshGujarat

Karnataka

Maharashtra

Tamil Nadu*

C circles (rural areas):

Assam

Bihar

Himachal Pradesh

Jammu & Kashmir

Northeast

OrissaKerala

Madhya Pradesh

(* Chennai, in the southeast, was previously aseparate Metro circle, but as of March 31,

2008, it was integrated into

the Tamil Nadu A circle as a single entity.)


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MAJOR INVESTMENTS

The booming domestic telecom market has been attracting huge amounts of

investment which is likely to accelerate with the entry of new players and launch ofnew services. Buoyed by the rapid surge in the subscriber base, huge investments arebeing made into this industry.

Norway-based telecom operator Telenor has bought a 60 per cent stake in UnitechWireless for US$ 1.23 billion.

Japanese telecom major NTT DoCoMo has acquired a 27.31 percent equity capitalof Tata Teleservices for about US$ 2.6 billion and a 20.25 per cent stake in Tata

Teleservices (Maharashtra) Ltd for about US$ 190.23 million.

Singapore Telecommunications (SingTel), which has a 31 per cent stake in BhartiAirtel has received the governments approval to offer long distance services inIndia, according to a communication ministry official.

Mauritius-based P5 Asia Holding Investments (Mauritius) Ltd will be investingaround US$ 545.13 million to hold a 20 per cent stake in Aditya Birla TelecomLtd (ABTL). The funds will be utilized for network rollout and operations of

ABTL in the Bihar circle.

Bharat Sanchar Nigam Ltd (BSNL) is planning an investment of around US$201.5 million in the Tamil Nadu Circle for an additional 23 lakh mobileconnections under both 2G and 3G technologies by 2011.

The latest to join the world's second largest telecom market is Bahrain's Batelcowhich has signed a deal to buy 49 per cent in Chennai-based S-Tel, a GSM serviceprovider, for $225 million.

Etisalat, a Gulf-based telecommunications company has picked up a 45 per cent stake inSwan Telecom.

Kavveri Telecom Products Limited is planning to set up a new subsidiary -Kavveri Telecom Infrastructure Limited (KTIL) with an investment of US$20.11 million over the next two years, to offer in-building telecom infrastructureto telecom service providers.


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Juniper Networks, which is the second-largest maker of networking equipment,plans to invest US$ 400 million in India, over the next five years, with a focus onits research and development (R&D) activity.

BSNL, India's leading telecom company in revenue terms, will put in about US$

1.16 billion in its WiMax project.

Bharti Airtel will be spending US$ 2.5 billion in a major expansion bid.

Vodafone Essar will invest US$ 6 billion over the next three years in a bid to

increase its mobile subscriber base from 40 million at present to over 100 million.

Telecom service provider, Tata Teleservices Limited, has announced that the

company will be investing additional US$ 6.74 million in Gujarat to set up 100

cell sites on August 2009. The company had earlier made an announcement of

investing US$ 24.1 million in the state on March 2009.

Telecom operator Aircel, which launched GSM mobile services in Bangalore on

February 23, 2009, plans to invest US$ 220.58 million over the next year to set up

base stations across the state.

3G Auction: Vodafone, Bharti win costly 3G spectrum (Economic Times)

Vodafone and Bharti paid a combined $5.1 billion for 3G mobile licenses in India,ending an epic auction that yields a bonanza for a deficit-strapped government butputs winners under pressure. Reliance Communications also won the right to providethird-generation services in an auction that lasted 34 days and will generate $14.6billion for the government, authorities said on Wednesday, nearly twice what it hadexpected.

"It's good news for the government, no doubt," said Arun Kejriwal, strategist at Kris

Research in Mumbai. "For the operators it's a large sum of money that has to be paidout. We have to see how these services are priced and received by the subscribers andhow it will impact their profitability," he said.

India is the world's fastest growing mobile phone market with some 500 millionsubscribers. India's three biggest carriers -- Vodafone, Bharti Airtel and RelianceCommunications -- each won key licenses to offer 3G services in Delhi andMumbai. Nine private operators participated in the auction for three sets of licenses,which ended with no single carrier winning high-speed 3G spectrum in all 22 circles

up for bidding.


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Seven different carriers, including Idea Cellular and unlisted Tata Teleservices, endedup winning spectrum. Japan's NTT DoCoMo owns 26 percent of Tata Teleservices. Afourth license will be sold separately and has been reserved for state operators. Indiais a late adapter of 3G and is the biggest economy not to offer such premium serviceson a wide scale, although the state-run telecoms firms have 3G services in some

zones.

Vodafone Essar, the UK giant's India unit, will pay about $2.5 billion for its India 3Gmobile spectrum, according to government data, and said it planned to launch aservice by year-end. Bharti, one-third owned by SingTel, is paying about $2.6 billionbut India's top carrier said it fell short of its objective of securing a pan-Indiafootprint due to high prices.

"We would like to point out that the auction format and severe spectrum shortage

along with ensuing policy uncertainty, drove the prices beyond reasonable levels,"the company said in a statement. The auction will help the government plug a fiscaldeficit that last year reached a 16-year high, and may enable it to cut back onborrowing, bringing relief to satiated bond investors.

"The 3G auction results demonstrate that the government borrowing will sail throughsmoothly," said Paresh Nayar, head of foreign exchange and money markets at FirstRand Bank in Mumbai. Finance Minister Pranab Mukherjee said the auction proceedswill give "elbow room" to the government.


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FUTURE PROSPECTS

With 300 million telephone subscribers today, India now boasts of having the secondlargest telecom network in the world after China. The country is adding some 8.5

million to 10 million new mobile subscribers to the network every month to alsoemerge as one of the fastest growing telecom markets in the world. The telecomindustry also saw an estimated $8.5 billion in investment flow in during 2006-07alone, of which $550 million was in the form of foreign direct investment.

All major telecom handsets manufacturers - including Nokia, Samsung, Motorola andLG - have their presence in India, so do leading global service companies andinfrastructure majors, such as Vodafone, Singapore Telecom, AT&T, Ericsson,Alcatel and Siemens.

The next phase of growth, experts believe, will be in the countrys vast rural areas - adevelopment that, they say, would be more important than the Green Revolution inIndias farm sector in the 1970s, when the country emerged as a self-sufficienteconomy in food production, driven by the introduction of hybrid seed varieties andnew irrigation techniques. Also, with a tele-density of just eight percent in rural India,as opposed to 50 percent in urban centers, the hinterland offers good scope forexpansion.

While the tele-density in the urban areas is over 50 percent, in rural areas it is aroundeight percent only. Clearly, the future lies in the rural areas. Telecommunicationaccess to rural India is going to be the most important development since the GreenRevolution. Research analysts feel that mobile voice is overwhelmingly the engine ofgrowth followed by Next Generation Network (NGN), broadband and data.

Norway based Telecom, worlds 7th largest telecom company is planning a foray inthe Indian market. Telenor has a subscriber base of 143 million and holds majoritystake in Bangladeshs Grameenphone and operates in 12 countries.


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CHALLENGES

The challenge of the day is to search for new cost-effective ways to roll out telecom

services in rural areas. It means one has to choose proper and effective technology fordeployment and leverage on the use of available infrastructure to reduce cost andtime of role out of services. Those service providers who create the right businesswould emerge winners and the rest would remain spectators. Connectivity ofnetworks and cost of bandwidth are also important to facilitate broadband usage.Availability of local application and content is another area of concern. Most of thecontent available on website as of today is in English. The content in local andregional language will increase interest of the local population in broadbandutilization. The convergence of technologies and emergence of new applications is

another thrilling area. Lot of revolution is round the corner in broadcasting andentertainment industries. The emergence of Internet protocol TV, mobile TV will allchange the scenario in the coming years.

Wireless technology is the future growth driver for which spectrum is the mostimportant input. The task of spectrum management in a multi user and multi usagescenario is more daunting and crucial than ever before. In summary, if the last fewyears in telecom were exciting, it will be even more exciting in the coming years.

What are the main challenges facing the sector as we go forward?

The challenge of the day is to search for new cost effective ways to roll out telecomservices in rural areas. It means one has to choose proper and effective technology fordeployment and leverage on the use of available infrastructure to reduce cost andtime of role out of services. Those service providers who create the right businesswould emerge winners and the rest would remain spectators.

Lack of infrastructure in semi-rural and rural areas, which makes it difficult to makeinroads into this market segment as service providers have to incur a huge initialfixed cost. But notwithstanding these constraints, telecom sector has undergone arevolution in the past decade and has played a major part in bridging the rural-urbandivide.


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SUGGESTIONS &CONCLUSION

Indian Telecom A Growing Consumer Need

The Indian telecom industry has experienced significant growth in the recent yearsand constitutes about 3 percent of the national GDP. The Indian telecom market isvibrant, price-sensitive and with high-growth potential. According to a recent studyby Gartner, the total cellular services revenue in India Is projected to grow at aCompound Annual Growth Rate (CAGR) of 18 percent from 2008-2012toexceedUSD37billion, with more than 737 million mobile connections by 2012,growing at a CAGR of 21percent in the same period. India along with other BRIC(Brazil, Russia, India and China) countries is likely to become homeforover1.7

billion mobile users by 2012. As per the study by Gartner 4, in the next 4 years,cellular market penetration in India would increase to 60.7 percent from 19.8percentlast year.

Indian market ripe for 3G spectrum

India has a large potential 3G user base in the almost 70-million wireless subscribers,who use their handsets to access data services on the Web. With such a large captiveaudience for 3G data applications, the scenario is different from that of other 3G

markets like Europe, where operators first rolled out high- bandwidth applicationsand then tried to rope in subscribers to use them.

According to the TRAI, India had about 58 million subscribers who accessed theinternet on their handsets at the end of December 2007, compared with about 46.4million at the end of October. Industry estimates place the figure for such wirelessinternet users at about 70 million by the end of March 2008, considering the countryadded over 30 million mobile users during the first three months of 2008.

The Indian Telecom Service provider industry is gearing for a revolution. Thecustomer is driving this revolution and will see more unique and sophisticatedofferings coming his way. The 3G which will pave the way for 3.5G, 3.75G and thenext big thing-4G and the VAS services will keep the customer asking for more. Therural areas which have remained untapped will see an insurgence of services. Alsothe easing of the regulations by TRAI, the ease of spectrum licensing, the FDI influxwill make the telecom space in India a must watch in the coming years.


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ANALYSIS OF BHARTI AIRTEL LIMITED

Different Players of Indian Telecom Industry :

There are three types of players in telecom services:

State owned companies (BSNL and MTNL)

Private Indian owned companies (Reliance Communication, Tata Teleservices)

Foreign invested companies (Vodafone Essar, Bharti Airtel, Idea )

I WANT ONLY

1 SIM CARD


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Market Share: Bharti Airtel Market Leader With 21.84 % Market Share in India :

Overall Indian Telecom Industry Market Share : TRAI REPORT : MARCH 2010

All India GSM Cell Subscribers- March 2010 (COAI Report) :

100.00%421860978All India

0.24%1006827Stel11

0.67%2844583Loop Mobile10

1.01%4264036Uninor9

1.13%4784453MTNL8

3.87%16311206Reliance Telecom6

8.74%36861174Aircel5

15.05%63486339BSNL4

15.13%63824688IDEA3

23.91%100858358Vodafone Essar2

30.25%127619314Bharti Airtel1

% Market ShareTotal Sub FiguresName of CompanySl. No.

100.00%421860978All India

0.24%1006827Stel11

0.67%2844583Loop Mobile10

1.01%4264036Uninor9

1.13%4784453MTNL8

3.87%16311206Reliance Telecom6

8.74%36861174Aircel5

15.05%63486339BSNL4

15.13%63824688IDEA3

23.91%100858358Vodafone Essar2

30.25%127619314Bharti Airtel1

% Market ShareTotal Sub FiguresName of CompanySl. No.


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BHARTI AIRTEL

An Introduction

Airtel comes to you from Bharti Airtel Limited, one of Asias leadingintegrated telecom services providers with operations in 18 countries acrossAsia and Africa. Bharti Airtel since its inception has been at the forefront oftechnology and has pioneered several innovations in the telecom sector.

Airtel is one of Asias leading providers of telecommunication services withpresence in all the 22 Telecom Circles in India, and in Sri Lanka. It served anaggregate of 130,686,172 customers as of March 31, 2010, in India; of whom

127,619,314 subscribe to GSM services and 3,066,858 use Telemedia Serviceseither for voice and/or broadband access delivered through DSL.

The company is structured into four strategic business units - Mobile,

Telemedia, Enterprise and Digital TV. The mobile business offers services in

India, Sri Lanka and Bangladesh. The Telemedia business provides Broadband,

IPTV and telephone services in 89 Indian cities. The Digital TV business

provides Direct-to-Home TV services across India. The Enterprise business

provides end-to-end telecom solutions to corporate customers and national and

international long distance services to telecoms.

Largest Private Integrated Telecom Company in India.

3rd Largest Wireless Operator in the World.

Largest & Fastest Growing Wireless Operator in India.

Largest Telecom Company listed on Indian Stock Exchange.


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Changes in Taglines & Logos by Airtel Brand

Airtel Brand : Taglines :

Airtel Brand Logo :


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Core Values of Airtel

Empowering People - to do their best

Being Flexible - to adapt to the changing environment and evolving customer needs

Making It Happen - by striving to change the status quo, innovate and energize new

ideas with a strong passion and entrepreneurial spirit

Openness & Transparency with an innate desire to do good

Creating Positive Impact with a desire to create a meaningful difference in society.

Goals/Objectives

To undertake transformational projects that have a positive impact on the

society and contribute to the nation building process.

To diversify into new businesses in agriculture, financial services and retailbusiness with world-class partners.

To lay the foundation for building a conglomerate of future.

Strategic intent is to create a conglomerate of the future by bringing about

Big Transformations through brave actions.

Business Units

Four Strategic Business Units :

The mobile business offers services

in India, Sri Lanka and Bangladesh.

1) Mobile

The Telemedia business provides

broadband, IPTV and telephoneservices in 89 Indian cities.

2 ) Telemedia

3 ) Enterprise

The Enterprise business provides end-to-end

telecom solutions to corporate customers and

national and international long distance services

to telcos.

4 ) Digital TV

The Digital TV business provides

Direct-to-Home TV services across

India.


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SWOT Analysis of Bharti Airtel

Strengths

Valuable Business Partners Techno & Financial

Strong Brand Image First Mover Advantage

Single Private Leading Indian Telecom Company

Enthusiastic & Innovative Business Development team

Marketing Driven Low Cost Model

Blessed with Directional Visionary - S.N. Mittal

Massive Economies of scale from large subscriber base

Weaknesses Outsourcing of Core Systems

Lagging behind in exploring market investment opportunity

Opportunities Tele-Density 30.6% Low among Developing Countries

Low Broadband Penetration

Untapped Rural Market

Bharti Infratel Cutting Down cost in Rural area Growing Globally

First Indian Sponsor to signed Manchester United

Threats Falling ARPU

Intense Competition From Nearest Competitor

Shortage of Bandwidth

New Players Entering Indian telecom sector

Uncertain Economic Condition


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Analysis of Product Life Cycle

TELECOMMUNICATION INDUSTRY LIFE CYCLE

Telecom Industry is in its mature growth stage.

Significant achievements have happened in this sector.

In 2009 February, there was a rise in subscriber base by 13.25 million.

Total subscriber base was 375 million in 2009. A hike by 50%.

This shows the changes in the consumption pattern among the middle class.

AIRTEL

AIRTELAIRTEL

TELECOMMUNICATION INDUSTRY LIFE CYCLE

Johnson , Scholes & Whittington : Pg. 68, 2008


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Value Chain Analysis

Value Chain Analysis

Conclusions & Recommendations

Inbound

Logistics

Operations

Output

Marketing

& Planning

Post Sale

Value Chain

Outcome -

37% PM

Aero mobile, MATE, GPS tracking

device for B2B

M-commerce

wide network coverage as they own their network

infrastructure

Android platform based HTC

mobile unique marketing

strategy, low STD rates

Trend setters

Bill payments and Indian rail

tickets using m commerce

Conclusion & Recommendations

Refine your processes; strive for dominance and build a brand Mr. Sunil BhartiMittal

Airtel have done a good job by improving their core competencies. Being the market

leader & especially in building a brand, I would recommend Bharti Airtel to continuewith their good work and concentrate more on mobile services which is Bhartis cashcow, in its process of huge diversification.


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REPORT ON THE SURVEY CONDUCTED

Telecom service is one such sector which has tremendously grown over the years andis still expanding. Through this project I was able to study the evolution of telecomsector and got an insight of different services available and the popularity of eachservice.

To determine which of the different cellular services available is the best, I conducteda survey among different consumers who are using the cellular services. I askedthem several questions based on the following parameters, which are as under:

Network coverage

Network connectivity

Complaint/Problem resolution

Promptness in the activation of the service

Accessibility of call centers

Response time to the customer for the assistance

Bill delivery

Bill payment experience

Customer service representatives interaction

On the basis of survey conducted, among all the cellular services like Vodafone,Airtel, Aircel, Idea, Reliance and others. Airtel stood apart in most of the categoriesand was favoured by almost 80% of the total using cellular services. This gave me theopportunity to further my study on Airtel and by studying in detail I have come to theconclusion that Airtel has a major impact on its users and people like its schemesvery much. It has created a very good image on the mind of the consumers byproviding quality service to its users. Airtel is successful in capturing the highestmarket share by adopting celebrity market strategy and thus is one of the leadingcellular services in India.


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BIBLIOGRAPHY

Websites:

TRAI: www.trai.gov.in

COAI: www.coai.com

DOT: www.dot.gov.in

India Telecom News: www.indiatelecomnews.com

Afaqs Telecom Yatra: www.telecomyatra.afaqs.com

Airtel Website: www.airtel.in

Newspapers: The Times of India

The Economic Times

The Tribune
http://www.trai.gov.in/http://www.coai.com/http://www.dot.gov.in/http://www.indiatelecomnews.com/http://www.telecomyatra.afaqs.com/http://www.airtel.in/http://www.airtel.in/http://www.telecomyatra.afaqs.com/http://www.indiatelecomnews.com/http://www.dot.gov.in/http://www.coai.com/http://www.trai.gov.in/

growth of telecom sector in india

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