1. Telecom indusTry in india
since 1991
By:
umar
Farooq
a 16
ll oloneumar89@gmail.com

2. INTRODUCTION
 Postal means of communication was the only mean
communication until the year 1850. In 1850 experimental
electric telegraph started for first time in India
between Calcutta (Kolkata).
 In 1851, it was opened for the use of the British East India
Company.
 Subsequently construction of telegraph started throughout
India. A separate department was opened to the public in 1854.
 Dr.William O’Shaughnessy, was the one who pioneered the
telegraph and telephone in India.
 In 1980 when the private sector was allowed in
telecommunications equipment manufacturing the first
wind of reforms in telecommunications sector began to
flow.

3. cont…
Today India has the second largest number of telephone
subscribers with 941.81 mn ( July 2012) in the world
accounting 12%.
Telecom is the third major sector attracting FDI inflows after
services and computer software sector.
FDI in telecom sector during April-June 2012 stood at US$ 8
million.
 GSM continues to be the dominant technology for wireless
phones with an 87.90 % share.
Mobile phones accounts for nearly 96.60 % of the total
telecom subscriptions.
Mobile tariffs in India are the second lowest in the world after
Bangladesh.
Telecom sector contributes 3.7% to the total GDP of India.

4. Reforms in Telecom sector since early 1990's
1991-92:
 On 24th July 1991, Government announced the New
Economic Policy.
 Telecom Manufacturing Equipment license was
delicensed in 1991.
1992-93:
Value added services were opened for private and
foreign players on franchise or license basis.
1994-95:
 The Government announced a National Telecom
Policy in September 1994

5. 1996-97:
 TRAI was set up as an autonomous body to separate
the regulatory functions from policy formulations and
operational functions.
 Internet Policy was finalized.
1998-99:
FDI up to 49 per cent of total equity, subject to
license, permitted in companies providing Global
Mobile Personal Communication (GMPC) by satellite
services.
1999-00
1. National Telecom Policy 1999 was announced
which allowed multiple fixed Services operators and
opened long distance services to private operators.
DOT/MTNL was permitted to start cellular mobile

6. 2000-01:
TRAI Act was amended. The Amendment clarified and
strengthened the recommendatory power of TRAI.
Department of Telecom creating Bharat Sanchar Nigam
Limited.
Reduction in STD & ISD rates.
2001-02:
1. Communication Convergence Bill, was introduced in
August 2001.
Wireless in Local Loop (WLL) was introduced for
providing telephone connection in urban, semi-urban and
rural areas.
2002-03
1. International long distance business opened for
unrestricted entry.
 Telephony on internet permitted in April 2002

7. 2004-05:
Broadband Policy announced on 14th October 2004.
BSNL and MTNL launched broadband services on
14th January 2005.
TRAI announced the reduction by 41 per cent on ISD
calls and by 61 per cent on STD calls.
2005-2006
1. Budget 2005-2006 cleared a hike in FDI ceiling to
74 per cent from the earlier limit of 49 per cent.
BSNL and MTNL launched the 'One-India Plan‘.
BSNL announced 33 per cent reduction in call charges
for all the countries for international calls.

8. 2007-10
3G guidelines issued spectrum allocation through auction,
foreign players allowed to bid.
TRAI announces rules & regulations to be followed for mobile
number portability in 2009.
BSNL 1st one to launch WIMAX service in 2010.
2011-2012
Airtel launches 4G service in April 2012.

9. Major players of telecom industry & year
of establishment
1) Bhar t i air t el-1985
2) Tat a communicat ions-1986
3) MTNL-1986
4) I dea cellular -1995
5) Tat a t eleser vices-1996
6) TTML-1998
7) Air cel-1999
8) Reliance communicat ions-1999
9) BSNL-2000
10) Vodaf one Essar -2007
11) Uninor 2009

10. Source: Telecom Regulatory Authority of
India

11. Market Leader
There are four major companies
in telecom industry.
 Airtel,
 Reliance,
Vodafone,
Idea and BSNL.
Airtel lead with 28.09% market
share.
 Vodafone on the 2nd place with

14. Key Drivers
 Mobile value added services like:
 Mobile banking, Mobile education, Health information services, Agriculture
and Entertainment, Internet services.
 Growth of e-business.
 Low cost hand sets.
 Rural population is the key growth driver of India's telecom industry.
 Market-driven factors such as planned expansion of networks
 Increasing use of 3G, Wimax(wireless network) and 4G
 Increase of Mobile users.(rose to 944.81 million in July 2012)
 Digitization of Television Broadcast Network
 Free Market system . ( e.g. Airtel Rwanda)
 Mergers and Acquisitions (M&A)
 Increase in IT users.
 Growth of Manufacturing and Service Industries.

15. Challenges FACED BY TELECOM
INDUSTRY
 Limited spectrum availability and interconnection charges between the
private and state operators.
 Telecom manufacturing in India is not in pace. With only a few
equipment manufacturers currently operating in the country, most of the
telecom equipment is imported as the country lags behind in terms of
telecom R&D.
 Lack of infrastructure in semi-rural and rural areas, which makes it
difficult to make inroads into this market segment as service providers
have to incur a huge initial fixed cost.
 One of the major challenge is the absence of a uniform approval process
across the country for setting up telecom towers and other infrastructure.
 Inadequate utilization of existing towers.
 Multiple levies and high taxes on the set up of mobile towers.
 lack of reliable power for telecom towers and higher tariffs on telecom
sites. This increases the dependence on diesel- fuelled power sources,
which is considered expensive and more harmful to the environment.

16. Impact of global crisis
As we know world economy is fighting with economic slow
down.
It seems something special about the telecom industry which
renders it partially immune to the worst effect of the down
turn.
Total base of connection in world is 3.2 bln.
There was less impact of global crisis on Indian telecom
industry as India became the 1st country in the world new
connections in a month.

17. Conclusions and Recommendations
 A fair and transparent Spectrum Policy should be ensured by the
Government.
 Equal Access should be ensured to provide support for the
achievement of Universal Service, an appropriate financing
mechanism be evolved.
 Provision of right of way could be given by State Governments
on simple commercial terms without any special conditions
 Tax laws should be amended to permit efficiency with respect to
consolidation and restructuring of the business of telecom
operators.
 Foreign Investment Thresholds should be encouraged.
 GOI to increase rural infrastructure (Mainly Power)

18. Reference:
http://www.dot.gov.in/
http://www.trai.gov.in/
http://timesofindia.indiatimes.com/ Articles,Jul 5, 2012
http://www.businessreviewindia.in/technology/softwar
e/-telecom-industry--indias- success-story•
 http://voicendata.ciol.com/content/news/110
112601.asp•
 http://www.coai.com/statistics.php

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