CONTENTS

1) TITLE

2) INTRODUCTION
a) Worlds Telecom Industry : An Overview
b) Indian Telecom Industry
c) What is Private limited and Public limited
d) Private sector companies in India
e) Public sector companies in India

3) TELECOM INDUSTRY ANALYSIS

4) REVIEW OF LITERATURE

5) OBJECTIVES

6) RESEARCH METHODOLOGY
a) Research design
b) Data collection method

7) DATA ANALYSIS
Comparison between RELIANCE Telecom and MTNL
a) Marketing
b) Financials
c) Research and Development
d) Human resource management
e) Technology
Measures taken by Indian government to improve the industry.
National Telecom Policy, 2005.

8) FINDINGS

9) BIBLIOGRAPHY

INTRODUCTION
 A) World telecom industry : An Overview

World telecom industry is an uprising industry, proceeding towards a goal of

achieving two third of the world's telecom connections. Over the past few years
information and communications technology has changed in a dramatic manner and as a
result of that world telecom industry is going to be a booming industry. Substantial
economic growth and mounting population enable the rapid growth of this industry.

 Research works associated with world telecommunication industry

 A number of research works are being carried out all over the world to improve the quality
and speed of transmission. Research works are also done on the basis of the users' needs. The
objective of the research work is to provide quality and affordable service to the consumers.

 Market potentiality of world telecommunication industry

The world telecommunications market is expected to rise at an 11 percent compound annual

growth rate at the end of year 2010. The leading telecom companies like AT&T, Vodafone,
Verizon, SBC Communications, Bell South, Qwest Communications are trying to take the
advantage of this growth. These companies are working on telecommunication fields like
broadband technologies, EDGE(Enhanced Data rates for Global Evolution) technologies,
LAN-WAN inter networking, optical networking, voice over Internet protocol, wireless data
service etc.

 Economical aspect of telecommunication industry

World telecom industry is taking a crucial part of world economy. The total revenue earned
from this industry is 3 percent of the gross world products and is aiming at attaining more
revenues. One statistical report reveals that approximately 16.9% of the world population has
access to the Internet.

 Microeconomics
On the microeconomic scale, companies have used telecommunications to help build global
business empires. This is self-evident in the case of online retailer Amazon.com but,
according to academic Edward Lenert, even the conventional retailer Wal-Mart has benefited
from better telecommunication infrastructure compared to its competitors.[29] In cities
throughout the world, home owners use their telephones to organize many home services
ranging from pizza deliveries to electricians. Even relatively-poor communities have been
noted to use telecommunication to their advantage. In Bangladesh's Narshingdi district,
isolated villagers use cellular phones to speak directly to wholesalers and arrange a better
price for their goods. In Côte d'Ivoire, coffee growers share mobile phones to follow hourly
variations in coffee prices and sell at the best price.

 Macroeconomics

On the macroeconomic scale, Lars-Hendrik Röller and Leonard Waverman suggested a

causal link between good telecommunication infrastructure and economic growth.Few
dispute the existence of a correlation although some argue it is wrong to view the relationship
as causal.

Because of the economic benefits of good telecommunication infrastructure, there is

increasing worry about the inequitable access to telecommunication services amongst various
countries of the world—this is known as the digital divide. A 2003 survey by the
International Telecommunication Union (ITU) revealed that roughly one-third of countries
have fewer than one mobile subscription for every 20 people and one-third of countries have
fewer than one land-line telephone subscription for every 20 people. In terms of Internet
access, roughly half of all countries have fewer than one out of 20 people with Internet
access. From this information, as well as educational data, the ITU was able to compile an
index that measures the overall ability of citizens to access and use information and
communication technologies.Using this measure, Sweden, Denmark and Iceland received the
highest ranking while the African countries Nigeria, Burkina Faso and Mali received the
lowest.
  Social impact

Telecommunication has played a significant role in social relationships. Nevertheless' devices

like the telephone system were originally advertised with an emphasis on the practical
dimensions of the device (such as the ability to conduct business or order home services) as
opposed to the social dimensions. It was not until the late 1920s and 1930s that the social
dimensions of the device became a prominent theme in telephone advertisements. New
promotions started appealing to consumers' emotions, stressing the importance of social
conversations and staying connected to family and friends.

Since then the role that telecommunications has played in social relations has become
increasingly important. In recent years, the popularity of social networking sites has increased
dramatically. These sites allow users to communicate with each other as well as post
photographs, events and profiles for others to see. The profiles can list a person's age,
interests, sexuality and relationship status. In this way, these sites can play important role in
everything from organising social engagements to courtship.

Prior to social networking sites, technologies like SMS and the telephone also had a
significant impact on social interactions. In 2000, market research group Ipsos MORI
reported that 81% of 15 to 24 year-old SMS users in the United Kingdom had used the
service to coordinate social arrangements and 42% to flirt.

 Other impacts

In cultural terms, telecommunication has increased the public's ability to access to music and
film. With television, people can watch films they have not seen before in their own home
without having to travel to the video store or cinema. With radio and the Internet, people can
listen to music they have not heard before without having to travel to the music store.

Telecommunication has also transformed the way people receive their news. A survey by the
non-profit Pew Internet and American Life Project found that when just over 3,000 people
living in the United States were asked where they got their news "yesterday", more people
said television or radio than newspapers. The results are summarised in the following table
(the percentages add up to more than 100% because people were able to specify more than
one source).

 Present market scenario of world telecom industry

Over the last couple of years, world telecommunication industry has been consolidating by
allowing private organizations the opportunities to run their businesses with this industry.
The Government monopolies are now being privatized and consequently competition is
developing. Among all, the domestic and small business markets are the hardest.

B) Indian telecom industry

Telecom industry in India has a big market potentiality and is a fast growing
sector. Government of India is eager to reconstitute this telecom industry by enacting
effective policies for more investments from foreign companies, which results in a very
competitive and deregulated market in the world.

 Policies of telecom industries in india

Government of India implemented the unified access licensing regime, which enables basic
and cellular mobile service to use any modern technology. In 1997, Telecom Regulatory
Authority of India (TRAI) was formed to facilitate the growth of the telecom sector in India.

 Policy initiatives

The government has taken many proactive initiatives to facilitate the rapid growth of the
Indian telecom industry.

d) In the area of telecom equipment manufacturing and provision of IT-enabled

services, 100 per cent FDI is permitted
e) No cap on the number of access providers in any service area. In 2008, 122 new
Unified Access Service (UAS) licences were granted to 17 companies in 22
services areas of the country
f) Revised subscriber based criteria for allocation of Global System of Mobile
Communication (GSM) and Code Division Multiple Access (CDMA) spectra
were issued in January 2008
 g) To provide infrastructure support for mobile services a scheme has been
launched to provide support for setting up and managing 7,436 infrastructure
sites spread over 500 districts in 27 states. As on December 31, 2009, about
6,956 towers had been set up under the scheme

According to the Consolidated Foreign Direct Investment (FDI) Policy document, the FDI
limit in telecom services is 74 per cent subject to the following conditions:

 This is applicable in case of Basic, Cellular, Unified Access Services, National/

International Long Distance, V-Sat, Public Mobile Radio Trunked Services (PMRTS),
Global Mobile Personal Communications Services (GMPCS) and other value added
Services.
 Both direct and indirect foreign investment in the licensee company shall be counted
for the purpose of FDI ceiling. Foreign Investment shall include investment by
Foreign Institutional Investors (FIIs), Non-resident Indians (NRIs), Foreign Currency
Convertible Bonds (FCCBs), American Depository Receipts (ADRs), Global
Depository Receipts (GDRs) and convertible preference shares held by foreign entity.
In any case, the 'Indian' shareholding will not be less than 26 per cent
 FDI up to 49 per cent is on the automatic route and beyond that on the government
route. FDI in the licensee company/Indian promoters/investment companies including
their holding companies shall require approval of the Foreign Investment Promotion
Board (FIPB) if it has a bearing on the overall ceiling of 74 per cent. While approving
the investment proposals, FIPB shall take note that investment is not coming from
countries of concern and/or unfriendly entities
 The investment approval by FIPB shall envisage the conditionality that the Company
would adhere to licence Agreement
 FDI shall be subject to laws of India and not the laws of the foreign country/countries

 Major services and market potentiality of Telecom industry in India

Telecommunication sector in India is primarily subdivided into two segments, which are
Fixed Service Provider (FSPs) and Cellular Services. Telecom industry in India constitutes
some essential telecom services like telephone, radio, television and Internet. Telecom
industry in India is specifically emphasizing 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 ). India has a
prospering market specifically in GSM mobile service and the number of subscribers is
growing very fast.

 3G Services
The Department of Telecom has taken the pioneering decision of launching of 3G services by
BSNL and MTNL and initiation of process for auction of spectrum for 3G services to private
operators. Allocation of spectrum for third-generation (3G) and broadband wireless access
(BWA) services was done through a controlled simultaneous, ascending e-auction process.

All the 71 blocks that were put up for auction across the 22 service areas in the country were
sold, leaving no unsold lots. Auction for 3G spectrum ended on May 19, 2010 after 183
rounds of intense bidding over a span of 34 days. The Government is expected to morph
revenue worth US$ 14.6 billion. All the available slots across 22 circles have been sold to
seven different operators.

A pan-India bid for third generation spectrum stood at US$ 3.6 billion. The Anil Ambani-led
Reliance Communication bagged the highest number of 13 circles at a cost of US$ 1.9
billion, followed by Bharti Airtel in 12, Idea in 11 and Vodafone and the Tatas in nine circles
each, according to the Department of Telecommunications.

MTNL and BSNL will have to pay US$ 1.42 billion and US$ 2.2 billion respectively.

It is expected that the Government of India would allot 3G spectrum on September 1, 2010 to
successful bidders. Letter of intent (LoI) has already been allotted to the 3G winners by the
Department of Telecommunications (DoT), said Telecom Secretary P J Thomas.

 Economic perspective of telecom industry in India

Telecom industry in India has a major role in Indian economy. The Indian government is also
enforcing some effective telecom policies and regulations for the infrastructural growth of
this industry. Indian telecom market provides a tele-density of 8.5 percent as registered in the
year 2004. A number of leading multinational telecommunication companies are approaching
and showing their interest to invest for the telecom industry in India. Telecommunication
industry of India ranked sixth among all the telecommunication sectors in the world. In the
year 2004, the total number of telephone subscriptions were US$93.2.
  Leading telecommunication service providers of telecom industry in India

Bharat Sanchar Nigam Limited, Mahanagar Telephone Nigam Limited (MTNL), Videsh
Sanchar Nigam Limited (VSNL), Bharti Airtel, RELIANCETeleservices, SIFY Ltd. are the
major telecommunications service providers in India.

C) WHAT IS PUBLIC AND PRIVATE COMPANIES

A private company limited by shares, usually called a private limited company

(Ltd) (though this can theoretically also refer to a private company limited by guarantee),
is a type of company incorporated under the laws of England and Wales, Scotland, that of
certain Commonwealth countries and the Republic of Ireland. It has shareholders with
limited liability and its shares may not be offered to the general public, unlike those of a
public limited company.

"Limited by shares" means that the company has shareholders, and that the liability of the
shareholders to creditors of the company is limited to the capital originally invested, i.e.
the nominal value of the shares and any premium paid in return for the issue of the shares
by the company. A shareholder's personal assets are thereby protected in the event of the
company's insolvency, but money invested in the company will be lost.

A limited company may be "private" or "public". A private limited company's disclosure

requirements are lighter, but for this reason its shares may not be offered to the general
public (and therefore cannot be traded on a public stock exchange). This is the major
distinguishing feature between a private limited company and a public limited company.
Most companies, particularly small companies, are private.

Private companies limited by shares are usually required to have the suffix "Limited"
(often written "Ltd" or "Ltd.") or "Incorporated" ("Inc.") as part of their name, though the
latter cannot be used in the UK or the Republic of Ireland; companies set up by Act of
Parliament may not have Limited in their name. In the Republic of Ireland "Teoranta"
 ("Teo.") may be used instead, largely by Gaeltacht companies. "Cyfyngedig" ("Cyf.")
may be used by Welsh companies in a similar fashion.

 Conversion

 Conversion of a private limited company to a public limited company

Both a private company limited by shares and an unlimited company with a share capital may
re-register as a plc., but a company without a share capital cannot do so.

A private company must pass a special resolution that it be so re-registered and deliver a copy
of the resolution together with an application form to the Registrar. The resolution must also:

 alter the company's memorandum so that it states that the company is to be a public
limited company,
 increase its share capital to the statutory minimum of £50,000,
 make any other alterations to the memorandum so that it conforms to that required for
a public limited company,
 make any required alterations to the articles of association of the company.

The private company if it does not already have sufficient issued share capital must issue
£50,000 in shares a minimum of 25% part paid.

 Conversion of a public limited company to a private limited company

In some jurisdictions a public limited company may re-register as a private limited company
or private unlimited company at any time with few formalities.

A court may also order a public company to re-register as private on approving a 'minute of
reduction' of share capital which results in the issued share capital falling below the statutory
minimum. In such a case the court will also specify alterations to the company's
memorandum and articles. A special resolution to re-register is not required
 D) Private sector companies in India

A Private Limited Company is the most popular form of business entity, which is used for
Foreign Investors in India, including USA investors in India. It requires some time to
incorporate in India as there are different steps required in forming a private limited company
in India. Following are the conditions:

 Minimum Two Directors.

 Minimum Two shareholders and Maximum Fifty shareholders.
 Minimum Capital paid up of Rs. 100000/-

The list of India’s top ten companies in the Private sector domain is:

Reliance Industries Limited

This is the largest private sector conglomerate in India founded by Dhirubhai Amabani with
an annual turnover of about US$ 35.9.This Fortune Global 500 company have its
businesses in materials and energy value chain. It enjoys the position of the global
leadership and is also the largest producer of yarn and fibre in the world. It ranks among the
top ten producers across the globe in major petrochemical products. The primary
subsidiaries of the company are Reliance Retail Limited and Reliance Petroleum Limited
along with Reliance Industrial Infrastructure Limited.

Oil & Natural Gas Corporation

This company is awarded as the Best Oil and Gas company in Asia. It is the lone
contributor of about 84% India's oil and gas. This company is not only among the leading
Indian companies but also a leading company of oil and gas. The highest profit making
corporate of India is ONGC. It has 77% share in the crude oil production of India. The
company's main activity is to explore,refine,produce,market and transport crude oil,natural
gas etc.

State Bank of India

It is the largest Indian bank and one of the leading companies in India.It offers banking
services through its wide network in India and overseas. With more than 16,000 branches it
accounts for the largest bank branch network in India. It offers services like the Mobile
Banking,Internet Banking, Demat Services,ATM Services,Corporate Banking,Merchant
Banking,Agricultural Banking,online services like online educational loan,online SME loan
and many others.
 Indian Oil Corporation

It is a public sector Indian Petroleum company and also the largest commercial enterprise in
India. This company ranks 116 on the list of the Fortune Global 500 list in the year 2008.It
operates the widest and the largest network of fuel stations in India which is about
17,606.Auto LPG Dispensing Stations are started by the company and it helps reach Indane
Cooking Gas to 47.5 million households. The company's products are diesel, petrol , Servo
Lubricants etc.

ICICI Bank

The largest private sector bank in the sector of market capitalization in India is ICICI Bank
and the second largest bank in assets. The wide network of the bank has 1,399 branches,49
regional processing centres,22 regional offices and more than 4,485 ATMs. It provides the
banking services like Personal banking,Corporate Net Banking,NRI,Internet Banking,24-hr
Customer Care and many other banking facilities.

NTPC

National Thermal Power Corporation Limited is the largest power company in India and
has a capacity of 29894 MW with 7 gas based,15 coal based power stations and about four
joint ventures. The company is the top among the Best Workplaces for Large
Organizations. Two major units of the company is in Orissa. The core business of the
company are construction,engineering and operation of power generating plants.

Steel Authority of India Limited

In India,one among the largest steel makers is Steel Authority of India Limited. The
company has a turnover of about Rs. 45555 crore. The company also ranks higher among
the top five largest profit earning Indian corporate. It is also the 16th largest producer of
steel in the world. The website of the company gives all the required information about the
Sales, Durgapur Steel Plant and other Plants and Units of the company.

RELIANCESteel

The company was initially known as TISCO and RELIANCEIron and Steel Company. It is
the sixth largest Indian Steel company in the world. The crude capacity of the company is
28 million tones. It is also ranks second among the largest private sector steel companies in
India.It had a profit of Rs 12,350 crore in the year 2008.The main plant is in Jharkhand,
Jameshedpur.It has become multinational for its operations across the world. The registered
office is in Mumbai.

Bharti Airtel

Bharti Enterprises' flagship company is Bharti Airtel. It is the topmost company in the
sector of telecom. The company is ranked as the one with best performance across the
globe in 2007 by the Business Week Magazine. It is also the first provider of telephine
service in the private sector and has carved the telecom sector path in India. The three
business units of the company are Enterprise Services,Mobile services and Broadband and
Telephone Services

Reliance Communications

The company offers services like the information and communication,infrastructure and
services for individuals and enterprises,consulting and applications. The company
consumers are in Reliance Landline, BroadNet, Rworld, Reliance Global call, Reliance
IPTV,Wireless Phone,Mobile-CDMA,GSM etc. The company is a renowned name in the
implementation and managing of entire telephony solution.

E) Public sector companies in India

There are several different definitions of a great place to work depending on the
different people that you ask. But, one thing remains common apart from good pay package
is that the great place to work has a management you can trust, people working there have
pride in their jobs and the employees work and gel well as a team.

A public limited company (legally abbreviated to plc with or without full stops) is a type of
limited liability company in the United Kingdom and the Republic of Ireland (and other
jurisdictions where companies law is derived from English law) which is permitted to offer
its shares to the public. It can be either an unlisted or listed company on the stock exchanges.
In the United Kingdom, a public limited company usually must include the words "public
limited company" or its abbreviation "plc" at the end and as part of its legal company name.
However, certain public limited companies (mostly nationalised concerns) incorporated under
special legislation are exempted from bearing any of the identifying suffixes.

The list of India’s top ten companies in the public sector domain is:

The Indian Oil Corporation provides tons of opportunities for the Indian youth seeking for
the right employment avenues. They have a turnover of Rs 201493.85 crore (Rs 2014.93) and
this is the most profitable Indian company for sure. It was ranked in the fortune 500 lists and
that speaks volumes for the kind of job satisfaction that one would derive by working in this
company. The IOC is the 20th largest petroleum company in the world and in fact is amongst
the real big players.

NTPC is India’s largest power company. It has an installed capacity of 29,894 MW. NTPC
contributed around 28.5% of the country’s entire power generation.

BPCL which is Bharat Petroleum Corporation Limited is India’s third largest company. It is
listed in the Fortune 500 &Forbes 2000 listings. After nationalization in 1976, Bharat
Petroleum saw a rapid growth path. Bharat Petroleum has products like petrochemicals and
solvents, to aircraft fuel and specialty lubricants, fuel for industries, and international and
domestic airlines.

Hindustan Petroleum Corporation of India Ltd is a Fortune 500company. HPCL also

owns and operates the largest lube refinery in India.
Oil and Natural Gas Corporation(ONGC) is the fifth largest company in India. It is also
has the distinction of being highest profit making corporation in India. ONGC is a Fortune
Global 500 company which contributes 77 per cent of India’s crude oil production and 81 per
cent of India’s natural gas production. The company was incorporated on June 23, 1993 as an
Indian public sector petroleum company.

Steel Authority of India Limited(SAIL) is the sixth largest company in India. Steel
Authority of India Limited (SAIL) is the leading steel-making company in India. It is a fully
integrated iron and steel maker, producing both basic and special steels for domestic
construction, engineering, power, railway, automotive and defence industries and for sale in
export markets.

Bharat Heavy Electricals Limited (BHEL) manufactures over 180 products under 30 major
product groups and caters to core sectors of the Indian Economy.

Bharat Sanchar Nigam Limited(BSNL) is the largest telecom industry and services
millions of households and commercial set ups for their telecom needs.

Hindustan Aeronautics Limited is the largest public sector company in the domain of
aeronautical engineering.

Bharat Dynamics Limited has made it to the top ten list due to the sheer grit and diligence
that it showcases in its balance sheet and the profitability that it shows year after year.

Telecom Industry Analysis

Telecom industry analysis uncovers the fact that this industry has a huge business
potentiality and is going to be a booming industry. Telecom industry analysis also reveals
that this industry will provide an immense employment opportunity in the coming years.

Statistical report

Phoenix Center research revealed that in the coming years, there will be a healthy
competition among the providers of telecommunication services. At the same time, the price
will be lower and quality will be higher. The new telecommunications technologies will
replace the traditional telecom services. Statistical data also reveals that the
telecommunications industry is going to be a dynamic and booming industry in the near
future. The telecom industry comprises of complex network of services like telephones,
mobile phones and internet services.
Telecom industry trends

Throughout the world, telecom industry are being controlled by private companies instead of
government monopolies. Traditional telecom technologies are also being replaced by modern
wireless technologies, specifically in case of mobile services. One of the major objectives of
telecom industry is to enhance the quality and speed of Internet technology.

These days, telecom industry is more concerned with texts and images (Internet
technologies), rather than voice(telephone service). Most of the research works are going on
Internet accessibility, specifically on data applications and broadband services. The other
major division of telecom industry is mobile network sector, where lots of innovative
research works are going on. Previously the traditional telephone calls used to earn the
maximum revenues, but these days mobile service is going to replace traditional telephone
services.

Telecom industry analysis from the experts point of view

Telecom industry is a vast and diversified industry and needs a huge capital to invest. That is
why the competitors of this industry should be such that they can meet that demand. From the
investor's point of view, it can be said that they should be well aware of cash flow in this
industry.

REVIEW OF LITERATURE
Girija (1998), in its article “Socioeconomic Implications of Telecommunications
Liberalization: India in the International Context” says that Telecommunications
restructuring have evolved differently in Asia and Latin America. While Asian governments
have moved cautiously in bringing changes to the sector, Latin American nations have
implemented radical ownership and market transformations. The Indian telecommunications
reform falls in between these two general regional trends. The choice of a high component of
competition, increased private participation, and no privatization of the national carrier set
conditions that will trigger unique socioeconomic effects. This article identifies and
highlights the likely implications of the Indian reform on key economic and social issues,
such as the cost of services, cross-subsidies, network interconnection, private investments,
universal services, employment, and the possible rise of an information-intensive economy. It
does so by comparing and contrasting the Indian experience with dominant reform strategies
elsewhere in the developing world.

T.H. Chowdary (1999) discusses how Telecom reform, or demonopolization, in India has
been bungled. Shaped by legislation dating back to the colonial era and post Second World
War socialist policies, by the mid-1980s India realized that its poor telecommunications
infrastructure and service needed reform. At the heart of the problem lay the monopoly by the
government’s Department of Telecommunications (DOT) in equipment, networks and
services. The National Telecom Policy 1994 spelt out decent objectives for reform but
tragically its implementation was entrusted to the DOT. This created an untenable situation in
which the DOT became policymaker, licenser, regulator, operator and also arbitrator in
disputes between itself and licensed competitors. He discusses the question: ‘Why did India
get it so wrong? and What India should do now?

Anand (1999), in his article named “India's economic policy reforms” says that India was
embarked on economic reforms in July 1991, in the wake of a balance of
payments crisis. In this article, an attempt is made to review two books and a set of World
Bank reports concerning the progress of these reforms. Issues concerning economic policy,
impact of the reforms on poverty, sectoral issues relating to agriculture, industry and
infrastructure are briefly discussed. As reforms enter a more difficult phase, several
challenges remain. Some of this fall under the “economic agenda'' of measures needed to
maintain economic growth; others can be termed the “development agenda'' - of improving
human development. Progress with regard to the former is not sufficient to produce results
concerning the latter.

Bhattacharya (2000) constructs a vision of the Indian telecommunication sector for the year
2020. The paper aims at isolating agents of change based on international experiences and
situates India in the development continuum. The agents of change have been broadly
categorized into economic structure, competition policy and technology.

Das (2000), in her paper described the Liberalisation of the Indian telecommunications
services which started in mid nineties with no change in the existing public monopoly
structure, entirely controlled by Department of Telecommunications (DoT). In order to
evaluate any proposed industry structure, it is essential to analyse the production technology
of DoT so as to determine the rationale of liberalisation and sustainability of competition.
Accordingly, the researcher estimates a frontier multi-product cost function for DoT, where
the cost function has been duly modified to account for the production technology of a public
monopoly. The study finds that although DoT displays high allocation inefficiency, it is still a
natural monopoly with very high degree of sub additively of cost of production. This study
implies that the choice of any reform policy should consider the trade-off between the loss of
scale and scope economies and cost saving from the reduction in inefficiency of the
incumbent monopoly in the event of competition.

Rao (2000), in her article named “Internet service providers in India”, provides a broad view
of the role of an Internet service provider (ISP) and the factors to be considered before
entering the ISP market. Describes the Internet/ISP scene within India and discusses the
configuration of local, regional and national level ISPs, and the supporting infrastructure. She
also identifies the various success factors. The global Internet scenario is discussed regarding
the phases of the Internet in India, i.e. pre and post commercialization. The main players are
described: ERNET, NICNET, STPI, VSNL, MTNL, Satyam Infoway and Bharti-BT. The
financial and legal implications are highlighted in the Indian context. Many companies
entered the nascent ISP business in India due to deregulation. Building local content,
foreknowledge of new Internet technologies, connecting issues, competitiveness, etc. would
help in their sustainability. She concludes that though many companies entered the nascent
ISP businesses in India due to deregulation, many of them are unlikely to survive in the
longer term.

Vrmani (2000) estimates the contribution of telecommunication (or telecom) services to

aggregate economic growth in India. Estimated contribution is distinguished between public
and private sectors to highlight the impact of telecom privatization on economic growth.
Knowledge of policy determinants of demand of telecom services is shown to be essential to
enhance growth contribution of telecom services. Using a recent sample survey data from
Karnataka State in South India, price and income determinants of demand for telecom
services are estimated by capacity of telephone exchanges Estimation results offer evidence
for significant negative own price elasticity and positive income elasticity of demand for
telecom services.

Narinder (2004), in his article “Enhancing Developmental Opportunities by Promoting ICT

Use: Vision for Rural India” talks about the foremost benefits of Information and
Communication Technologies (ICTs) in developing countries that can be helpful in
improving governance including public safety and eradication of illiteracy. The benefits of
ICTs have not reached the masses in India due to lack of ICT infrastructure, particularly in
rural areas, where two-third of the population of the country lives. Even in cities and
suburban areas, use of ICTs is not popular due to lack of awareness to its use, computer
illiteracy, and absence of practical applications. India is the largest country in South Asia,
with a population of over one billion people and its telecom sector is presently experiencing
fast growth phases. However telephony penetration in villages is less than two percent of the
rural population and about 15 percent of the villages are still without any telephony service.
Universal access to ICTs in rural areas has been planned and is being implemented through
Public Tele Info Centers having voice data and video, as majority of villagers in India cannot
afford a separate home connection. Illiteracy in rural areas is as high as 40 percent and in
some tribal belts hardly about 20 percent people are literate. There are 35 million children in
age group of 6–11 years, who are out of school and one out of four drops out during primary
classes. Education and training, therefore, must be given the top priority if advantages of
ICTs are to be harnessed. Indian economy is agriculture based and employs maximum
workforce. Improvement in agriculture productivity can help in reducing rural poverty.
Adoption of ICT in agriculture will play an increasingly important role in crop production
and natural resource management. The other critical factor is technological challenges for
universal access to ICTs to bring down the network access cost.

Nikam, Ganesh, Tamizhchelvan (2004), analyses that changing face of India in bridging the
digital device. He reiterated - “India lives in villages” said the Father of the Nation, Mahatma
Gandhi. With 1,000 million people and 180 million households, India is one of the biggest
growing economies in the world. With the advent of the Information, Communication and
Technology (ICT) revolution, India and its villages are slowly but steadily getting connected
to the cities of the nation and the world beyond. Owing to the late Rajiv Gandhi, India is now
a powerful knowledge economy, and though India may have been slow to start, it certainly
has caught up with the West and is ahead in important respects. The Government, the
corporate sector, NGOs and educational institutions have supported rural development by
encouraging digital libraries, e-business, e-learning and e-governance. The aim of this paper
is to touch upon and highlight some of the areas where, by using ICT, the masses have been
reached in this way. A follow-up paper will outline collections of significant cultural material
which, once national IT strategies are fully achieved, could form part of a digitally preserved
national heritage collection.

Dey (2004), in her article talks about the discussions between the Federal Communications
Commission (FCC) and communications policy makers and regulators in other countries and
how they have gleaned several clusters of issues where further research would directly
benefit them. Recently, there have been two notable shifts. First, as the acceptance of the
competition model over the monopoly model for telecommunications markets takes deep
effect in regulators all over the world, questions regarding process and procedure for
regulation are becoming ever more urgent. This paper discusses current questions regarding
decision making, enforcement, and understanding consumer issues that arise often in the
FCC's discussions with other regulators. Second, technological change is potentially shifting
market definitions. In the FCC's discussion with other regulators over the last two years, the
overlap of wireline telecom, wireless telecom and cable television has become more
pronounced.

Singh (2005), in his article “The role of technology in the emergence of the information
society in India” describes the role that information and communication technologies are
playing for Indian society to educate them formally or informally which is ultimately helping
India to emerge as an information society. Though India has a huge population, the illiteracy
rate is also huge in this country. The paper has taken an approach to find the historical
situation and present the prevailing scenario as well as the change that are taking place with
the application of ICT to the advantage of the society in different areas including daily life.
India is making all out efforts to be counted among the developed nations of the world. The
article also describes the considerable attention India is taking for application of technology,
development of infrastructure and human resource for meeting national needs. Basically India
is building an information society. Technology has helped society to cut across the
traditional boundaries for getting converted into an emerging information society. The study
concludes that The Indian software and services industry has significantly helped to boost the
Indian economy. In IT-enabled services too, India has been clearly perceived to be the
dominant hub. The Indian software sector is being recognized as the single largest contributor
to incremental market capitalization in India but the sector is still small in terms of
contribution to GDP, especially when compared to other large sectors in the economy like
agriculture and manufacturing. Similarly, the telecommunication sector has contributed a lot
but still has a considerable way to go. The paper also enforces that comparisons of India’s
telecommunication statistics with those of developed and other emerging economies show
that the country is still far behind its contemporaries.

Mr. Banka (2006) gives an overview of the mergers and acquisitions in the
telecommunication industry. According to him Governments decision to raise the foreign
investment limit to 74% is expected to spur fresh rounds of mergers and takeovers in India.
He foresees a sector that represents humongous opportunity waiting to be tapped by Indian
and foreign conglomerates.

Thomas (2007), in his article describes the contribution made by telecommunications in

India by the state and civil society to public service, this article aims to identify the state’s
initial reluctance to recognize telecommunications provision as a basic need as against the
robust tradition of public service aligned to the postal services and finds hope in the renewal
of public service telecommunications via the Right to Information movement. The article
follows the methodology of studying the history of telecommunications approach that is
conversant with the political economy tradition. It uses archival sources, personal
correspondence, and published information as its research material. The findings of the paper
suggests that public service in telecommunication is a relatively ‘‘new’’ concept in the annals
of Indian telecommunications and that a de-regulated environment along with the Right to
Information movement holds significant hope for making public service telecommunications
a real alternative. The article provides a reflexive, critical account of public service
telecommunications in India and suggests that it can be strengthened by learning gained from
the continual renewal of public service ideals and action by the postal services and a people-
based demand model linked to the Right to Information Movement. All studies done by the
researcher suggests that the right to information movement has contributed to the
revitalisation of participatory democracy in India and to a strengthening of public service
telecommunications.
Cygnus Business Consulting & Research Pvt. Ltd. (2008), in its “Quarterly Performance
Analysis of Companies (April-June 2008)” has analysed the Indian telecom industry in the
awake of recent global recession and its overall impact on the Indian economy. The analysis
is done in the background of wake of global recession and rising inflation. Cygnus estimates,
the Indian telecom industry is expected to maintain the growth trajectory in the next quarter
as well. With almost 5-6m subscribers are being added every month, and the country is
witnessing wild momentum in the telecom industry.

Maheshwari (July-September 2008), in her report analysed the Indian telecom industry and
ascertain that Indian telecommunications has been zooming up the growth curve at an
mounting pace, and India is has surpassed US to become the second largest wireless network
in the world. This growing subscriber base is basically created by tapping into rural India,
which is an emerging market for the industry. The estimate for the next five to ten years is
that the rural market will form 40 % of the subscriber base. The study has analysed the
human resource management process of the industry, and specially the latest trends of
recruitment of this massively growing industry.

Anderson (2008), in his single executive interview titled “Developing a route to market
strategy for mobile communications in rural India An interview with Gurdeep Singh,
Operations Director, Uttar Pradesh, Hutch India” suggests that managers need to go beyond
traditional approaches to serving the poor, and innovate by taking into account the unique
institutional context of developing markets. His practical implication says that the experience
of Hutchison Essar in India provides some important lessons for mobile network operators
(MNOs) and other firms in other developing markets who are hoping to serve the rural poor:
Hutchison has recognized the value of corporate and non-corporate partners. The company
has proactively established relationships with individual entrepreneurs, and has provided has
provided development support to other partners such as distributors. The company has
recognized the value of leveraging existing local institutions, and has seen gaps in local
infrastructure or missing services as potential opportunities rather than barriers to growth.
The company has seen the rural market as an opportunity – not just an obligation to be served
because of universal service obligations. Also this article demonstrates that MNOs can
deliver availability and affordability to achieve increased individual or household penetration
through business model innovation.

Mani (2008) addresses a number of issues arising from the growth of telecom services in
India since the mid-1990s. It also discusses a number of spillover effects for the rest of the
economy and one of the more important effects is the potential to develop a major
manufacturing hub in the country for telecom equipment and for downstream industries such
as semiconductor devices. The telecom industry in India could slowly become an example of
the service sector acting as a fillip to the growth of the manufacturing sector. A beginning
towards this has been made. The formation of a Telecom Equipment Export Forum and the
announcement of the Indian Semiconductor Policy 2007 are steps in this direction. Success
crucially depends on the response of the private sector to these incentives. Given the
importance that a regulatory agency can play in this crafting, no effort should be lost in
strengthening the powers of the TRAI. The benefits to the Indian economy from having both
a strong services and manufacturing segments in the telecom sector cannot be undermined.

Narayana (2008) estimates the contribution of telecommunication (or telecom) services to

aggregate economic growth in India. Estimated contribution is distinguished between public
and private sectors to highlight the impact of telecom privatization on economic growth.
Knowledge of policy determinants of demand of telecom services is shown to be essential to
enhance growth contribution of telecom services. Using a recent sample survey data from
Karnataka State in South India, price and income determinants of demand for telecom
services are estimated by capacity of telephone exchanges. Estimation results offer evidence
for significant negative own price elasticity and positive income elasticity of demand for
telecom services.

Sharma (2009) deals with the major challenges faced by India’s telecom equipment
manufacturing sector, which lags behind telecom services. Only 35% of the total demand for
telecom equipment in the country is met by domestic production. This is not favourable to
long-term sustained growth of the telecom sector. The country is also far behind in R&D
spending when compared to other leading countries. India needs to see an increase in R&D
investment, industry-academia-government partnership, better quality doctoral education and
incentives to entrepreneurs for start-ups in telecom equipment manufacturing. In 2006-07,
65% of the total consumption of equipment was met through imports. This trend has far-
reaching implications for the economy and should not be allowed to continue for long. In a
country like India which has a problem of massive unemployment, the manufacturing sector
should be promoted to create more employment opportunities.

Shah (February, 2009), has analysed Indian telecom industry and studied the sector keeping
in mind three companies; namely Bharti, R.Comm and idea in the background of recent
global meltdown. The study suggests that though there is no sign of slowdown in this sector,
but surely a strong turmoil is going on in the industry. The study states that the sector is fairly
immune from the current economic downturn & does provide a good defensive bet in
medium term. With the help of newer technologies, wireless penetration is expected to
increase in the near future, which is basically fuelling the growth of the sector. While the 3G /
Broadband adoption would ensure long term growth momentum, the article has thoroughly
investigated about the intense competitive scenario, pricing pressure, high capital intensity &
substantial regulatory uncertainties currently faced by the industry. The article has also
described the cause of being relatively safe of this industry. The causes described by Shah are
increasing rural coverage, rising affordability, declining handset/subscription costs,
substantially low tariffs & established brand/distribution. However, the study also cautions
the telecom industry that a steeper economic slowdown could start impacting the subscriber
usage patterns as well as operator capital investments & thereby could substantially restrict
revenue growth rates going forward.
OBJECTIVES

.TO COMPARE PRIVATE AND PUBLIC TELECOM SECTOR ON THE

BASIS OF RELIANCE TELECOM AND MTNL

.TO ANALYSE THE TELECOM SECTOR

.TO COMPARE THE RELIANCE TELECOM AND MTNL ON

FOLLOWING ASPECTS
-MARKETING
-FINANCE
-RESEARCH AND DEVELOPMENT
-HR MANAGEMENT
-TECHNOLOGY

Research Methodology
This section deals with the research design used and data collection method used.

a). Research design:-

In case of my research “Comparative analysis of Indian private and Public

sectors with special reference to RELIANCE TELECOM and MTNL” the
descriptive research is found to be more appropriate.
 Descriptive research studies are those studies, which are concerned with
describing the characteristics of a particular individual, or a group. This study is
concerned with specific prediction, narration of facts and characteristics concerning
individual, group of situation are all examples of descriptive research studies.

b). Data collection method:-

According to my topic of research I found that the use of secondary data is the
only right choice. For that I mainly used Internet and collective various data from
government and private websites.

I visited to the library and went through various books and journals for collection
of the relevant data for the research.