Telecom Industry In India

A Benchmark For Others

Presented by:-
ANIKET SETHI (109115)
AANCHAL TANEJA (109101)
 Industry Overview
 One of the fastest growing cellular markets in the world in terms
of number of subscriber additions – 17.98 million in 1 month
(June 2010)
 Total Telephone subscriber base reaches 671.69million on 30th
June,2010 (i.e., more than one phone for every household)
 o Wireless subscription reaches 635.51 Million
 o Wireline subscription declines to 36.18
 Annual growth rate of the telecom subscribers – 48.7 percent
(June 2009 to June 2010)
 More GSM subscribers than fixed-line subscribers
 Tele density – 56.83 percent (June 2010)
 Broadband subscription is 9.45 million (June 2010)
 ARPU for GSM – `131 per month (as 31st march 2010)
 Telecom equipment market – USD 17,100 million (2006–07)
 Handset market – USD 4,750 million (2006–07)
Investing In India
 World’s largest democracy
 Independent judiciary
 Skilled and competitive labour force
 Fifth largest telecom network in the world; second largest
among the emerging economies after China
 On an average, about 6–7 million new users added per
month, making India the world’s fastest growing wireless
services market
 Liberal Foreign Investment Regime–FDI limit increased
from 49 percent to 74 percent; the rural telecom
equipment market is also open to large investments
 Among the countries offering the highest rates of return on
investment
 The large untapped potential in India’s rural markets–25
percent teledensity in rural markets as compared to the
national level of 57 percent
 India’s Competitive Advantage
Racing Ahead
 Increasing mobile subscriber numbers and low level of
teledensity offers large opportunities to Indian companies.

Large number of Low teledensity (depicting Telecom

additions in telecom large untapped potential) Advantage
subscribers

 Expected to become the second largest telecom market by

2010
 Telecom investment set to peak at $40 bn this year,
Telecom Equipment and Services Export Promotion Council
has said.
 Mobile Number Portability will implement from 31 st October
2010.
 The much hyped 3G Auctions is finally concluded in India.
Government was able to earn double their expectations at
around Rs.70,000 Crores.
Emerging technologies – 3G and WiMax to assist in penetration of
telecom services in India

 The Indian government was able to earn double their expectations at around
Rs.70,000 Crores from 3G services auction. Therefore, the 3G spectrum is
among the major investment opportunities and growth drivers of the telecom
industry.
The immense potential for 3G is reflected by the 30–40 percent annual growth in
Value-Added Services.
Cell phone manufacturers are striving to develop USD 100 priced 3G handsets
for the Indian market.
India expects to replicate its 2G growth in 3G services.
 WiMAX has been one of the most significant
developments in wireless communication in the recent
past. Since this mode of communication provides network
access in inaccessible locations at a speed of more than 4
Mbps.
It is estimated that India will have 13 million WiMAX
subscribers by 2012.
Aircel is the pioneer in WiMAX technology in India.

The state-owned player, BSNL, aims to connect 74,000

villages through WiMAX.
Bharti, Reliance and VSNL have acquired licenses in the
3.3GHz range to utilise the opportunities offered by this
domain.
 FDI
The Indian telecom industry has a 74 percent FDI limit in the telecom services segment.

The GoI has permitted 100 percent FDI in manufacturing of telecom equipment in India.

680
700
521
FDI (USD million)
500

300
116 129
100
2003–04 2004–05 2005–06 2006–07

The Indian telecom industry has always attracted foreign investors. In fact, the cumulative
FDI inflow, during the August 1991 to March 2007 period, in the telecommunication sector
amounted to USD 3,892 million. It is the third largest sector to attract FDI in India in the post-
liberalisation era.
FDI calculation takes into account radio paging, cellular mobile and basic telephone services
in the telecommunication sector.
 Major trends in the telecom sector is increasing M&A activity, de-
regulation of telecom policies and growing interest of international
investors.

Recent Deals in Telecom Sector

•Reliance Communications Ltd (RCom), the Vodafone purchased stake in Hutch

from Hong Kong's Hutchison
country’s second largest mobile telephony Telecom International for USD

company by subscribers, will likely get 11.08 billion.

Rs16,000-18,000 crore in cash following Reliance Communications Limited has sold a five percent
the equity share capital of its subsidiary Reliance Telecom
Infrastructure Limited to international investors across the
merger of its telecom tower assets with US, Europe and Asia. The deal was worth USD 337.5
million.
that of GTL
Infrastructure Ltd
Telekom Malaysia acquired a 49
percent stake in Spice

•In March 2010, Bharti Airtel bought the Communications for USD 179
million.

African operations of Kuwait-based

Zain Telecom for US$ 10.7 billion, Maxis Communications acquired a
74 percent stake in Aircel for USD
driving the Indian player into the 1.08 billion.

league of top ten telecom players

globally. Ericsson to design, plan, deploy and
manage Bharti Airtel network and
facilitate their expansion in the rural
areas, under a USD 2 billion
contract.
Trends in Telephone subscribers
and Teledensity in India
Category-wise Growth Rate in
Access Service
Trends in Internet/Broadband
subscription
Composition of Telephone
Subscribers
Major Players in different segments of Indian telecom industry

Basic Services Operators

MOBILE SERVICES GSM Services Operators
BSNL
Airtel
MTNL

Vodafone
Reliance

Idea
TTSL

Reliance

BSNL
Internet Services Operators

BSNL
CDMA Services Operators

MTNL Reliance

Reliance
TTSL
TTSL
BSNL

Airtel

MTNL – Mahanagar Telecom Nigam Ltd. TTSL – Tata Teleservices Ltd.

BSNL – Bharat Sanchar Nigam Ltd.
 Wireless Segment:-
Service Provider wise Market
Share as on 30-6-2010
 Wireline Segment:-
Service Provider wise Market
Share as on 30-6-2010
Data as on 31 March 2010
st
 Summary
 The Indian Telecommunications industry is one of
the fastest growing economy in the world and An
Ideal Destination for Investments in
Telecom Sector.

 India is projected to become the second largest

telecom market globally by 2010.
Thank
You