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Telecommunication Industry. By Harmeet Singh. Historical background. When India became independent in 1947,it already had about 82,000 telephone connections which rose upto 3 million in year 1985. Introduction.
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Telecommunication Industry By Harmeet Singh
Historical background When India became independent in 1947,it already had about 82,000 telephone connections which rose upto 3 million in year 1985.
Introduction The telecom sector in India was under the government monopoly until the year 1994 when liberalization was gradually started. In year 1995 for the first time the cellular services were launched in Kolkata.
Statistical data also reveals that the telecommunications industry is going to be a dynamic and increasing industry in the near future.
Figures published by the Telecom Regulatory Authority of India (TRAI), reveal that the number of telecom connection subscribers in India reached 562.21 million in December 2009, marking a 3.5 percent increase over the number 543.20 million reported in November 2009.
The Indian telecommunication industry is second largest in Asia. It continues to increase with leap and bounds and is the main driving force in pushing Indian economy.
Technology used Telecom industry in India is placing special attention on latest technologies like GSM( Global System for Mobile Communications), CDMA(Code Division Multiple Access), PMRTS(Public Mobile Radio Trunking Services), Fixed Line and WLL(Wireless Local Loop ).
Indian Goverment The Indian government is pushing some effective telecom policies and regulations for the infrastructural growth of telecommunication industry. In 1997, Telecom Regulatory Authority of India (TRAI) was formed to facilitate the growth of the telecom sector in India.
Economic Factors India is a developing country .Therefore it provides ample opportunities for new investors to get successful. New india has spending power and can be lured by using new technologies.
A study undertaken by Nokia has brought out that the communications sector will grow as the single largest chunk of the India’s GDP making up about 15.4 per cent by the year 2014.
Demographical factors India has large population which in itself provides big opportunity to companies. Business Monitor International has stated that at present, India is adding up about 8-10 million mobile subscribers every succeeding month.
Estimates have revealed that by June2012, almost half India’s population will have their own o mobile phone. This will result in about 612 million mobile subscribers, making up a teledensity of about 51 per cent by the year 2012.
Technological factors The new internet technologies like 3g spectrum will give huge boost to this industry. Due to technological advances the mobile phones are becoming faster, smaller and more efficient. This will also improve the industry.
Leaders in Industry 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 (Hutchison-Essar, Bharti Tele-Ventures, Escotel, Idea Cellular, BPL Mobile, Spice Communications)
MTNL profile It was established in 1986. MTNL with a market share of about 13% of the National telecom Network has a customer base of 5.92 million.
MTNL was set up by the Government of India to upgrade the quality of telecom services, expand the telecom network, introduce new services and to raise revenue for telecom development needs of India’s key metros.
Alliances of MTNL MTNL has formed a Joint Venture company in Nepal by the name of United Telecom Ltd. (UTL) in collaboration with Telecom Consultants India Limited (TCIL) in 2001 for providing WLL based basic services in Nepal.
Tata Teleservices profile It was established in 1996. Tata Teleservices is a part of the $12 billion Tata Group, which has 93 companies, over 200,000 employees and more than 2.3 million shareholders.
Tata Teleservices’ collection of telecommunication services includes Mobile services, Wireless Desktop Phones, Public Booth Telephony and Wirelineservice.
Other services include value added services like voice portal, roaming, post-paid Internet services, 3-way conferencing, group calling, Wi-Fi Internet, USB Modem, data cards, calling card services and enterprise services.
Advantages India is a developing country so this means that there is still a lot of opportunities to improve.Thismeans the new investors have a bright prospect of improving.
The Indian government is welcoming investors with open arms. The investors can benefit from technology improvements in the market. The small town market has lot of potential.
Disadvantages The competition is very stiff and fierce in the telecommunication industry. The telecommunication market is already saturated i.e there’s no place for new companies.
The Foreign direct investment (FDI) is limited to 49 percent which means the foreign investors will have to search for partners.
Taxation As of present there is no tax exemption for any investor. The license fees is 8- 14 percent on annual gross revenue
Regulatory body Telecom Disputes Settlement and Appellate Tribunal (TDSAT) came into existence in May, 2000. TDSAT has been empowered to adjudicate any dispute – • between a licensor and a licensee • between two or more service providers
• between a service provider and a group of consumers • hear and dispose of appeal against any direction, decision or order of TRAI
Other authorities Telecom Regulatory Authority of India (TRAI) Department of Telecommunications
In order to become successful in the market the investors must keep tariffs low. This might decrease the profit margin but the large market can compensate for it.
