TELECOMMUNICATION MARKET IN INDIA

The Indian telecommunications Network with 250m telephone connections is the fifth largest in

the world and is the second largest among the emerging economies of Asia. Today it is the

fastest growing market in the world and represents unique opportunities for UK companies in

the stagnant global scenario. Tele-density, which was languishing at 2% in 1999, has shown an

impressive jump to 9.5% in 2006 and 10.5% in 2007 and is set to increase to 20% in the next

five years beating the Govt. target by three years. Accordingly, India requires incremental

investments of USD 20-25 bln for the next five years.

Private operators have made mobile telephony the fastest growing (over 164% p.a.) in India.

With more than 33 million users (both CDMA and GSM), wireless is the principal growth engine

of the Indian telecom industry. Given the current growth trends, cellular connections in India will

surpass fixed line by late 2004/early 2005. Intense competition between the four main private

groups - Bharti, Vodafone, Tata and Reliance and with the State sector incumbents-BSNL and

MTNL has brought about a significant drop in tariffs. There has been almost 74% in cell.

phone charges, 70% in ILD calls and 25% drop in NLD charges,
resulting in a boom time for the consumers.

The Government has played a key enabling role by deregulating and liberalising the industry,

ushering in competition and paving the way for growth. While there were regulatory irregularities

earlier, resulting in litigation, these have all been addressed now. Customs duties on hardware

and mobile handsets have been reduced from 14 percent to 5 percent.

The Indian government has merged the IT and Telecom Ministries to speed up reforms and

decision on the Communication Convergence Bill to enable the common regulation of the

Internet, broadcasting and telecoms will be taken after the new Government assumes

responsibilities in may this year. An independent regulatory body (TRAI) and dispute
settlement body (TDSAT) is fully functional.
INDIAN CELLULAR MARKET
The Bharti Group, which operates in 23 circles, continues to be the country's largest cellular
operator, with 50 lakh subscribers. BSNL, which operates in 22 circles, has a subscriber base of
37 lakh subscribers. Thus BSNL stands second largest cellular operator in terms of subscriber
base at the end of the fiscal ending March 31, 2007, displacing Vodafone from the
second

position.

Vodafone, which operates in only eighteen circles, is the third largest operator with a subscriber

base of 32 lakh. Unlike fellow public sector undertaking, MTNL, which operates in Mumbai and

Delhi, BSNL has been a very aggressive player in the market. "Cellular operators who expected

BSNL to go the MTNL way, were taken by surprise and did not take effective steps to counter it,

till it was too late in the day," said a telecom analyst.

Belying fears of a slowdown in cellular subscriber acquisitions, the cell club has reported a

7.92% growth, the highest growth in any month so far, during March 2005. Year-on-year, the

cellular subscriber base in the country has almost doubled in March 2005, and is expanding at

the rate of 25% per year thereafter.

The cellular subscriber club expanded by 21.31 lakh last month.

This is much higher than 5.9 lakh subscribers added in February 2005 and 2.13 lakh in January

2005. Idea, which operates in Seven circles, is the fourth largest operator with a subscriber

base of 17.80 lakh, higher than BPL's 11.31 lakh subscribers across four circles. The subscriber

numbers per operator drop sharply with the sixth largest operator, Spice Communications,

having a subscriber base of 9.40 lakh, followed by Reliance

Telecom's 8.9 lakh subscribers. MTNL is the ninth largest

operator, with a base of 8.32 lakh subscribers.
While the subscriber base-jumped by 3.38% to 44.39 lakh in the metros, subscriber base of

category A circles of Maharashtra, Gujarat, Andhra Pradesh, Karnataka and Tamil Nadu jumped

by 10.18 % to reach 43.64 lakh. Category B circles of Kerala, Punjab, Haryana, Uttar Pradesh

(West), Uttar Pradesh (East), Rajasthan, Madhya Pradesh and West Bengal recorded a jump of

10.69%, with a total base of 33.74 lakh subscribers. Circle C has reported 12.74 % growth with

subscriber numbers jumping to 5.08 lakh.

Among the metros, while Mumbai added 1,63,180 subscribers, higher than the 1,58,646 added

by Delhi, the Capital's cellular subscriber base of over 80 lakh is still higher than Mumbai's

66.89 lakh. While the cellular industry has been on roll for the first three quarters of the previous

financial year with an average of 16.75 lakh monthly additions in the third quarter, the first two

months of 2007 had seen the growth slowing down.

GSM MARKET IN INDIA

Regional Interest Groups - GSM India

With a population of around 1.1 billion growing at roughly 1.7 per cent a year, India is potentially

one of the most exciting GSM markets in the world. After two rather difficult years, the past 12

months have seen the region's promise beginning to come to fruition. Much of this success can

be attributed to the stabilisation of the licensing and regulatory environment.

India's telecommunications have undergone a steady liberalisation since 1994 when the Indian

government first sought private investment in the sector. More significant liberalisation followed

in 1996 with the licensing of new local fixed line and mobile service providers. However, it has

been the government's New Telecom Policy (1999) that has had the most radical impact on the

development of GSM services. 'The policy's mission statement is 'affordable communications for

all', There is a genuine commitment to creating a modern and efficient communications

infrastructure that takes account of the convergence of telecom, IT and media. In addition, the

policy places significant emphasis on greater competition for both fixed and mobile services.'

Competition in the mobile sector has already had a visible impact on prices with calls currently

costing less than 9 cents per minute. This means that service costs have fallen by 60 per cent

since the first GSM networks became live in 1995. It also helps explain why a recent Telecom

Asia survey revealed that more than 70 per cent of Indian mobile subscribers felt that prices

were now at a reasonable level.

One of the challenges facing GSM operators in India is the diversity of the coverage regions

-from remote rural regions to some of the most densely populated metropolitan areas in the

world. India has more than 40 networks, which cover the seven largest cities, over 7000 towns

and several Lacs villages. Such depth of coverage has required enormous investment from

India's operators. It is estimated that more than Rs200 billion had been invested in India's GSM

industry by mid-2000, a figure that is set to be supplemented by a further Rs. 300 billion over

the next five years.

The good news is that subscriber growth is beginning to look healthy. With India's low PC

penetration and high average Internet usage -at 14-20 hours a month per user it is comparable

to the US -the market for mobile data and m-commerce looks extremely promising. WAP

services have already been launched in the subcontinent and the first GPRS networks are in the

process of being rolled out. In the year ahead, GSM India will work with its members to realise

the potential of early packet services in anticipation of the award of 3GSM licences.

had been invested in India's GSM industry by mid-2000, a figure that is set to be supplemented

by a further Rs. 300 billion over the next five years.

The good news is that subscriber growth is beginning to look healthy. With India's low PC

penetration and high average Internet usage -at 14-20 hours a month per user it is comparable

to the US -the market for mobile data and m-commerce looks extremely promising. WAP

services have already been launched in the subcontinent and the first GPRS networks are in the

process of being rolled out. In the year ahead, GSM India will work with its members to realise

the potential of early packet services in anticipation of the award of 3GSM licences.
India fastest growing GSM mart

India is expected to have 145 million GSM (global system for mobile communications)

customers by 2007-08 compared to 26 million subscribers as on March 2005, according to the

Global Mobile Suppliers Association. "For GSM, India is a success story. It is one of the fastest

growing markets with its subscriber base doubling in 2005. At this pace, the target of 150 million

subscribers by 2007-2008 is definitely achievable," Alan Hadden, president of GSA, said at a

news conference in New Delhi. Globally, the GSM market reached 1 billion users in February

2005, he said, adding GSM accounted for 80 per cent of the new subscriber growth in

2005."Almost every Latin American operator has chosen GSM. In North America GSM growth is

bigger than CDMA (code division multiple access)," he said. Commenting on the raging debate

over GSM versus CDMA in mobile services arena, Hadden said: "GSM is the world's most

successful mobile standard with over 1 billion users, and is an open mobile standard. It also

supports automatic international roaming, which is a major contributor to business plans."

Bharti is almost there

But first, the EDGE! Bharti Cellular is close to commercially launching its EDGE service in Delhi

and Mumbai by end May or early June, sources said. The company was the first to conduct field

trials in November with its equipment supplier Ericsson. Idea too held EDGE field trials in

February this year with its vendor Nokia. Vodafone and BPL are yet to hold the trials. The two

companies would eventually migrate to EDGE, but perhaps after seeing the response to Bharti’s

service

too held EDGE field trials in February this year with its vendor Nokia. Vodafone and BPL are yet

to hold the trials. The two companies would eventually migrate to EDGE, but perhaps after

seeing the response to Bharti’s service.

EDGE holds the promise of delivering data speeds of around 170- 180 kbps (as against the

theoretical speed of around 380 kbps) which, if achieved, promises the launch of many data

applications. The scalable cost of migrating from GPRS to EDGE is not too high and mainly

comprises software upgrades in case of a modern network such as Bharti and Hutch, claimed

chairman of GSA India chapter Rakesh Malik

INTRODUCTION
Airtel (Bharti Airtel Ltd.)

Bharti Airtel Limited was incorporated on July 7, 1995 for promoting investments in

telecommunications services. Its subsidiaries operate telecom services across India. Bharti

Airtel is India's leading private sector provider of telecommunications services based on a strong

customer base consisting of 50 million total customers, which constitute, 44.6 million mobile and

5.4 million fixed line customers, as of March 31, 2007.

Airtel comes to us from Bharti Airtel Limited - a part of the biggest private integrated telecom

conglomerate, Bharti Enterprises. Bharti provides a range of telecom services, which include

Cellular, Basic, Internet and recently introduced National Long Distance. Bharti also

manufactures and exports telephone terminals and cordless phones. Apart from being the

largest manufacturer of telephone instruments in India, it is also the first company to export its

products to the USA. Bharti has also put its footsteps into Insurance and Retail segment in

collaboration with Multi- National giants. Bharti is the leading cellular service provider, with a

footprint in 23 states covering all four metros and more than 50 million satisfied customers.

PROMOTIONAL STRATEGY
Airtel to “Touch Tomorrow” with a new brand vision

The Bharti Mobile promoted AirTel cellular service will go in for repositioning of its brand image.

The new brand ethos is portrayed in two distinct fashions - the tag line "Touch Tomorrow",

which underscores the leading theme for the new brand vision, followed by "The Good Life",

which underscores a more caring, more customer centric organization. Aimed at re- engineering

its image as just simply a cellular service provider to an all out information communications

services provider, Touch Tomorrow is meant to embrace the new generation of mobile

communication services and the changing scope of customer needs and aspirations that come

along with it

The new communication is about a new dimension in the cellular category that goes beyond the
Internet, SMS, roaming, IVRS, etc but which engulfs the whole gamut of wireless digital
broadband services that will constitute tomorrows cellular services. The new campaign is in two
phases - the first of which will communicate overall brand philosophy and the second products
and services. According to Mr. Jagdish Kini, Chief Operating Officer, Bharti Mobile Limited,
Karnataka "We are adopting a new brand- platform - Touch Tomorrow - not only to reflect
our corporate

ethos but also business strategy".

The new identity will have the logo in Red, Black and White
colours along with lower case typography to convey warmth.
AirTel will incorporate the latest branding in all of its
communication and will soon be going in for an enhanced
promotional drive to establish the brand's presence.