Telecom Project

PROJECT ON TELECOM SECTOR OF INDIA

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VISHWA VISHWANI INSTITUTE OF SYSTEMS & MANAGEMENT GROUP MEMBERS AREBasanta Kumar Padhan Satyajit Paul Shailendra Shrivastava Mukesh Kumar Bhatta Rabi Kumar Sadija

INTRODUCTION OF TELECOM INDUSTRY History -India’s telecom renaissance has been remarkable. After 44 years of government monopoly, market liberalization introduced in 1991 has led to a 7-fold increase in the number of phones in just 12 years.  The mobile market recently topped 31 million customers.  India is one of the fastest growing telecom markets with an average annual growth of about 22% for basic telephony and over 100% for cellular and Internet services. 

History of telecommunication     

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India requires investments of at least $37 billion by 2005 and $69 billion by 2010. Year-1851 First operational land lines were laid by the government near Calcutta (seat of British power)  Year-1881 Telephone service introduced in India Year -1923 Formation of Indian Radio Telegraph Company (IRT)  Year -1947 Nationalization of all foreign telecommunication companies to form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of Communications Year -1997 Telecom Regulatory Authority of India created Year -1999 Cellular Services are launched in India. New National Telecom Policy is adopted.  Year -2000 Do not becomes a corporation, BSNL

Major Players There are three types of players in telecom services:  • -State owned companies (BSNL and MTNL)  • -Private Indian owned companies (Reliance Infocomm, Tata Teleservices,)  • -Foreign invested companies (HutchisonEssar, Bharti Tele-Ventures,  Escotel, Idea Cellular, BPL Mobile, Spice Communications) 

Introduction of major players  BSNL  BHARTI  MTNL  RELIANCE

INFOCOMM  TATA TELESERVICES  VSNL  HUTCH  IDEA

 

MARKET SHARE OF PLAYER IN TELECOM SERVICE

Regulatory Control Entry of private service providers in 1992 brought the need for independent regulation.  Telecom Regulatory Authority of India(TRAI) was established from 20February 1997 to regulate telecom services & tariffs fixation.  Telecommunications Dispute Settlement and Appellate Tribunal(TDSAT) was established from 24January 2000 to settle disputes between a licensor and a licensee, service providers, service provider and a consumer. 

Recent Policy Changes  Restructuring

the sector.  Increased the investment.  Technology development and transfer  Service provision.

Major Market Trends v Telecom trends in India have a great impact on the PC,internet,broadband,Cable,handset features. v An average of 4million subscribers added every month for the past 6 months. v The wireless subscriber base has increased 75percent from 2002 to 2007. v 18 percent of mobile users are willing to change their handsets every year.

Mergers Demand for new spectrum as the industry grows and the fact the spectrum allocation is done on the basis of number of subscribers will force companies to merge so as to claim large no . Of subscribers to gain more spectrum as a precursor to the launch of larger and expanded services.

EQUIPMENT MARKET

EQUIPMENT OF TELECOM INDUSTRIES IN INDIA

TOP 10 INDIAN TELECOM PROVIDER IN INDIA

Telecom Market in India : 2002-07

Million Units

Mobile Phones

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Annual subscriber base growth 44%; 2007-08: subscriber expected to cross 250 mn

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2006-07: Base Stations installed: 100,000; Annual growth: 55%

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2006-07: Towers installed: 100,000; Annual growth: 60% 14

Dept. of Telecom 26 November 2006

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Key Policy Initiatives/milestones 

New Economic Policy (1991) › Opening up of Telecom service sector

(Mobile –metros)

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National Telecom Policy 1994 › Telecom, key for development › Inadequacy of public resource to meet

demand › Private sector to supplement Govt. › Provide world class telecom service at affordable cost

Dept. of Telecom 26 November 2006

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Key Policy initiatives (contd..)  Establishment of TRAI (1997)  New

Telecom Policy (NTP 99)

› Transition from fixed license fee to

revenue share › Introduction of free competition › Technology neutral licenses › Tariff rebalancing  Creation

of BSNL (2000)  Establishment of TDSAT (2000)

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Key Policy initiatives (contd..)  Opening

of National & International long distance  Launching of mobile service by BSNL (2002)  Establishment of USO Fund  Broadband policy (2004)

Dept. of Telecom 26 November 2006

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KEY FACTOR OF TELECOM GROTH IN INDIA q Telecom industry is growing at a scorching pace in the recent years. q It is due to the following reasons 3. We have moved from an environment that was monopolized. by state own company. 4. Intense competition among several player. 5. Wireless revolution is taking place in country. 6. Global economics is growing. 7. Another key role is implementation of customer greater control over telecom costs. (CPP REGIME)

NEW STEPS FOR TELECOM

1. Foreign Direct Investment of up to 100 percent permitted for the following:

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Manufacturing of telecom equipment

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Internet service (not providing international gateways)

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Infrastructure providers (Category I)

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E-mail service

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Voice mail service

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Call Centers and IT enabled services

2. Foreign Direct Investment of up to 74 percent permitted for the following: 

Internet service (providing international gateways)

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Infrastructure providers (Category II)

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Radio paging services

 

NEW STEPS FOR TELECOM  

q 5. Automatic approval for technology fee up to US$ 2 million, royalty up to 5 percent for domestic sales and 8 percent for exports in telecom manufacturing (higher amount through specific approvals)   q 6. Full reparability of dividend income and capital invested in the telecom sector  

q 7. Fiscal incentives and concessions for the telecom sector: 

Amortization of license fee

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Tax holiday

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Rebate on subscription to shares/debentures

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Scope for tax exemption on financing through venture capital

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Import duty rates reduced for various telecom equipment

 

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H ON TELECOM "U" PROJECT N A BA SAN TA K UMAR PADHA N SA T YA JI T PAUL SH AILENDRA SH RI VAST AVA RABI KUMA R SA DIJA JY OTI RAN JA N JENA