INDIAN TELECOMMUNICATION SECTOR
[Its telephone ringing everywhere in India -The Tribune]
Submitted By: Gurpreet Singh Roll NO.:2010.mgb.01.429
Table of Contents
1 Telecommunication Sector of India..3 1.1Introduction.. 3 1.2Summary....3 1.3History....4 1.4Telecom services ..4 1.5Growth Avenues.....5 1.6Industry Revenue....6 1.7Subscriber Growth......7 1.8Major Players..8 1.9 Handset Manufacturers (Market share) 8 1.10 Major Investments in the sector......9 1.11 Exploring the rural telecom opportunity..9 1.12 Policy Initiatives ...9 2 TRAI.10 2.1 Mission...10 2.2 Function..10 3 The Road Ahead....11 3.1Acquiring New Subscribers through expansion in Rural India ..11 3.2Gradual Progression in Telecom Sector ......11 4 Key trends in telecom industry 4.1 Mobile Number portability (MNP)...11 4.3 IPTV .12 4.2 Wimax v/s 3G .......12 5 Industry Updates 5.1 Consolidation in Industry.....13 5.1.1 Idea Cellular Acquisition of Spice Telecom.....13 5.1.2 Vodafone entry to India........................................................................................................14 5.1.3 Telenor-Unitech Deal....14 5.1.4 TTSL-DOCOMO deal...14 5.2 FDI Investments in the Telecom Sector in India..............................................................................15 5.3 3G Auction ...15 6 Future Technology Trends15 6.1 High Speed Downlink Packet Access (HSDPA) ...15 6.2 4G....15 7 Conclusions...16
8 Bibliography..17
List of Tables 1. History...4 2. Revenue Data.7 3. List of top five country using Mobile phone..8 4. MNP data..12
List of Figure 1. Growth Avenue ..5 2. Revenue Chart.7
1 Telecommunication Sector of India
The Indian telecommunication industry is the world's fastest growing industry with 771 million mobile phone subscribers as of January 2011. It is also the second largest telecommunication network in the world in terms of number of wireless connections after China
1.1 Introduction
Telecommunication is the transmission of information, over significant distances, for the purpose of communication. In earlier times, telecommunications involved the use of visual signals, such as beacons, smoke, semaphore telegraphs, signal flags, and optical heliographs, or audio messages via coded drumbeats, lung-blown horns, or sent by loud whistles, for example. In the modern age of electricity and electronics, telecommunications now also includes the use of electrical devices such as telegraphs, telephones, and teletypes, the use of radio and microwave communications, as well as fiber optics and their associated electronics, plus the use of the orbiting satellites and the Internet A revolution in wireless telecommunications began in the first decade of the 20th century, with Guglielmo Marconi winning the Nobel Prize in Physics in 1909 for his pioneering developments in wireless radio communications. Other highly notable pioneering inventors and developers in the field of electrical and electronic telecommunications include Charles Wheatstone and Samuel Morse (telegraph), Alexander Graham Bell (telephone), Nikola Tesla, Edwin Armstrong, and Lee de Forest (radio), as well as John Logie Baird and Philo Farnsworth (television).
1.2 Summary
The rapid growth in Indian telecom industry has been contributing to Indias GDP at large. Telecom industry in India started to set up in a phased approach. Privatization was gradually introduced, first in value-added services, followed by cellular and basic services. Telecom Regulatory Authority of India (TRAI), was established to regulate and deal with competition (the service providers). This gradual and thoughtful reform process in India has favored industry growth. Upcoming services such as 3G and WiMax will help to further augment the growth rate. The Indian telecommunications industry is one of the fastest growing in the world and India is projected to become the second largest telecom market globally by 2010. This is evident from the facts of Telecom Industry for example, India added 113.26 million new customers in 2008, the largest globally. The countrys cellular base witnessed close to 50 per cent growth in 2008, with an average 9.5 million customers added every month. This would translate into 612 million mobile subscribers, accounting for a tele-density of around 51 per cent by 2012. It is projected that the industry will generate revenues worth US$ 43 billion in 2009-10. In this report we have tried to capture most of the areas of Telecom Industry. Major highlights of the report are History of Telecom Industry, Current Industry Analysis, Role of TRAI, Spectrum allocation, FDI Regulation, Competitive advantages, Outsourcing in Telecom, Emerging Technologies, Latest Innovation, and Growth Trends, Mergers and Acquisitions
1.3History
1851 1947 1980s: The Beginning Introduction of Telegraph services Foreign Telecom Companies nationalized to form PTT Tele-density in 1980-81: 0.3% Introduction of public pay phones Private Sector allowed DoT, MTNL and VSNL formed
Early to Mid 90s: A Messy affair
Telecom policy 1994 - Basic telephony service to private operators - 49% FDI - 8 licensees began operations in Aug 1995 Birth of a regulator: TRAI NTP 1999 (New Telecom Policy) CAGR of around 85% since 1999 FDI: 74% (2005 having the world's lowest call rates the fastest growth in the number of subscribers (45 million in 4 months), the fastest sale of million mobile phones (in a week), the world's cheapest mobile handset the world's most affordable colour phon
Late 90 2000+ 2007-2009
Table : 1 1.4 Telecom services
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 Trucking Services), Fixed Line and WLL. India has a prospering market specifically in GSM mobile service and the number of subscribers is growing very fast.
1.5 Growth Avenues
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Fig : 1 Managed services are another segment that is attracting telecom companies. On account of the rapidly growing subscriber base, service providers find it difficult to manage their infrastructure and network management operations. In such cases, they completely or partially outsource their infrastructure or network management operations. To reduce their network deployment costs, many service providers are considering infrastructure sharing offers the following advantages: Improved service quality Increased affordability for customers Faster roll out of services in rural and remote areas Significant reduction in initial set up costs Increased environmental aesthetics Lower operating costs for service providers
Enterprise Telecom Services includes key services, such as voice over Internet protocol (VoIP), dedicated telecom communication systems; IT infrastructure enabled unified communication services, etc. Telecom service providers are increasingly targeting enterprises by providing dedicated services and is expected to witness major developments in near future. Virtual Private Network is a private data network that provides connectivity within closed user 7
Groups via public telecommunication infrastructure. Competition is likely to heat up in the VPN Segment as DoT has relaxed the norms for private players. 3G the Indian government plans to auction the spectrum for 3G services by inviting bids from domestic as well as foreign players, and creating a competitive environment that offers better services to consumers. 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 3040 percent annual growth in ValueAdded Services. Cell phone manufacturers are striving to develop USD 100 priced 3G handsets for the Indian market.
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 expected to be a major factor in driving telecom services in India, especially wireless services. Thus, it will lead to the increased use of telecom services, Internet, value-added services and enterprise services. WiMAX is expected to accelerate economic growth and assist in providing better education, healthcare and entertainment services. 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 utilize the Opportunities offered by this domain
Value Added Services: The VAS industry was worth USD 632 million in 200607. The industry is Estimated to grow by 60 percent in 200708 and become an USD 1,011 million opportunity. The VAS industry is currently focussing on the entertainment sector, such as the Indian film industry and cricket; however, there is scope for growth in other avenues as utility-based services, such as location information and mobile transactions. Rural Telephony: As the government targets to increase rural teledensity from the current 2 percent to 25 percent by 2012, rural telephony will require major investments. This segment will boost the demand for telecom services, equipment, Internet services and other value-added services; thereby, offering great market opportunities for telecom players.
1.6 Industry Revenue
As the fastest growing telecommunications industry in the world, it is projected that India will have 1.159 billion mobile subscribers by 2013. Furthermore, projections by several leading global consultancies indicate that the total number of subscribers in India will exceed the total subscriber count in the China by 2013.The industry is expected to reach a size of 344,921 crore (US$76.57 billion) by 2012 at a growtrate of over 26 per cent, and generate employment opportunities for about 10 million people during the same period. According to analysts, the sector would create direct employment for 2.8 million people and for 7 8
million indirectly. In 2008-09 the overall telecom equipment revenue in India stood at 136,833 crore (US$30.38 billion) during the fiscal, as against 115,382 crore (US$25.61 billion) a year before Table:2 Year 2005-06 2006-07 2007-08 2008-09 2009-10 2011-12(expected)
80 70 60 50 40 30 20 10 0 2005-06 2006-07 2007-08 2008-09 2009-10 2011-12
Revenue($ billion) 11 15 25.61 30.38 35.69 78
R evenue($ billion)
Fig:2
1.7 Subscriber Growth
A large population, low telephony penetration levels, and a rise in consumer spending power has helped make India the fastest-growing telecom market in the world. The market's first operator was the stateowned Bharat Sanchar Nigam Limited (BSNL), created by corporatization of the Indian Telecommunication Service, a government unit formerly responsible for provision of telephony services. Subsequently, after the telecommunication policies were revised to allow private operators, companies such as Bharti Airtel, Reliance Communications, Tata Indicom, Idea Cellular, Aircel and Loop Mobile have entered the market (Bharti Airtel currently being the largest telecom company in India). In the fiscal year 2008-09, rural India outpaced urban India in mobile growth rate.
The total number of telephones in the country crossed the 806.13 million mark, while the overall tele-density has increased to 64.74 as of 62.31% in October 31, 2010. Mobile telephony experiences growths at rates such as 18.98 million subscribers a month, which were added in October 2010
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List of countries by number of mobile phones in use (Top 5) Rank 1 2 3 4 5 Country or region China India United States Russia Brazil Number of phones 863,000,000 771,181,357 302,947,098 213,900,000 207,500,000 Table: 3 Population 1,341,000,000 1,210,193,422 310,866,000 142,905,200 190,732,694 % of population 64.53 64.74 96 147.3 106.91
1.8 Major Players
Bharti-Airtel leads the wireless market with 24% market share. The company recently achieved the magic figure of 100 million subscribers. However, Bharti-Airtel expects a bloodbath in the Indian telecom market in the near future, and is looking to spread its risks by entering new geographies (Bharti-MTN deal is discussed in Industry Update Section). With 12-13 players present in the market there would be a severe pressure on margins. Be it an Aircel or Etisalat, the new operators would not remain fringe players in the Indian market, but would try and rock the applecart of existing operators. The growth in Indian market could start tapering off very soon. According to an industry expert the subscriber base will not expand beyond 800 million in coming years from current number 400 million. Also, ARPUs in India have steadily falling ($5-$6). There have been talks about 3G and IPTV pushing growth, but it all seems farfetched. The third generation of mobile services (3G) will be used by telcos to gain more spectrums. Besides, the services will be used only in urban areas.
1.9 Handset Manufacturers (Market share)
India's telecom equipment manufacturing sector is set to become one of the largest globally by 2010. Mobile phone production is estimated to grow at a CAGR of 28.3%, totaling 107 million handsets by 2010. Nokia Leads the market with whopping 60% share. Korean giant Samsung currently at number there is looking forward increase its market share to 20% through aggressive marketing
1.10 Major Investments in the sector
The booming domestic telecom market has been attracting huge amounts of investment which is likely to accelerate with the entry of new players and launch of new services. Buoyed by the rapid surge in the subscriber base, huge investments are being made into this industry. 10
The Russian government is likely to pick up equity amounting to US$ 670 million-US$ 700 million in Sistema Shyam TeleServices Ltd (SSTL), a joint venture between Russia-based telecom major Sistema and Shyam Group in India, by the end of this financial year. SSTL is also planning to invest US$ 5.5 billion over the next 5 years in India. Norway-based telecom operator Telenor has bought a 60 per cent stake in Unitech Wireless for US$ 1.23 billion. And they emerge as UNINOR Japanese telecom major NTT DoCoMo acquired a 27.31 per cent equity capital of Tata Teleservices for about US$ 2.6 billion in November 2008. Bahrain's Batelco has signed a deal to buy 49 per cent in Chennai-based S-Tel, a GSM service Provider, for US$ 225 million. BSNL, India's leading telecom company in revenue terms, will put in about US$ 1.16 billion in its WiMax project. Vodafone Essar will invest US$ 6 billion over the next three years in a bid to increase its mobile Subscriber base from 40 million at present to over 100 million. Telecom operator Aircel, which launched GSM mobile services in Bangalore in February 2009, Plans to invest US$ 220.58 million over the next year to set up base stations across the state
1.11 Exploring the rural telecom opportunity
It is believed that of the next 250 million people expected to go mobile; at least 100 million will come from rural areas. Though the rural mobile penetration is highest in Punjab (20.69 per cent), followed by Himachal Pradesh (17.09 per cent), Kerala (10.63 per cent) and Haryana (10.20 per cent), most companies are now sweating it out by hard selling their products and services in the rural areas of the region. As a result, the geographical coverage of mobile telephony in India has gone up from 13 percent, a couple of years ago, to 39 percent now.
1.12 Policy Initiatives
The government has taken many proactive initiatives to facilitate the rapid growth of the Indian telecom industry. 100% foreign direct investment (FDI) is permitted through the automatic route in telecom equipment manufacturing FDI ceiling in telecom services has been raised to 74% Introduction of a unified access licensing regime for telecom services on a pan-India basis 11
Plan to introduce mobile number portability in a phased manner The government is implementing a program of connecting 66,822 uncovered villages under the Bharat Nirman programme. The government will invest US$ 2 billion to set up 112,000 community service centers in rural India to provide broadband connectivity in 2008-09. The Department of Telecommunications (DoT) has stated that foreign telecom companies can bid for 3G spectrum without partnering with Indian companies. Only after winning a bid, would they need to apply for unified access service license (UASL) and partner with an Indian company in accordance with the FDI regulations.
2 Telecom Regulatory Authority of India (TRAI) 2.1 Mission
To ensure that the interests of consumers are protected and at the same time to nurture conditions for growth of telecommunications, broadcasting and cable services in a manner and at a pace which will enable India to play a leading role in the emerging global information society. The entry of private service providers brought with it the inevitable need for independent regulation. The Telecom Regulatory Authority of India (TRAI) was, thus, established with effect from 20th February 1997 by an Act of Parliament, called the Telecom Regulatory Authority of India Act, 1997, to regulate telecom services, including fixation/revision of tariffs for telecom services which were earlier vested in the Central Government
2.2 Functions
Need and timing for introduction of new service provider Terms and conditions of license to a service provider Revocation of license for non-compliance of terms and conditions of license Measures to facilitate competition and promote efficiency in the operation to facilitate growth in industry Technological improvement in services by service providers Measures for Technological development Ensure compliance of terms and conditions of license Fix the terms and conditions of their inter connectivity between service providers
3 The Road Ahead
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The target for the 11th Plan period (2007-12) is 600 million phone connections with an investment of US$ 73 billion. Apart from the basic telephone service, there is an enormous potential for various valueadded services. In fact, the real potential for telecom service growth is still lying untapped. According to the CII Ernst & Young report titled 'India 2012: Telecom growth continues', revenue from India's telecom services industry is projected to reach US$ 78 billion in 2012, as against US$ 31 billion in 2008.
3.1 Gradual Progression in Telecom Sector
The progression chart below depicts the major regulations and events driving the extra ordinary growth of Telecom sector from year 1999 to 2008. In order to capitalize this opportunity of meeting the consumer needs in highly competitive market the operators have reduced the tariffs to attract consumers with low purchasing power primarily in semi urban and rural India. In fact lucrative offers like being paid for incoming calls have transformed the scenario completely. Through these changing regulations and events, the Industry players are aiming to achieve the following Acquiring new subscribers by expanding in Semi Urban and Rural India
Selling more services to existing subscribers The recent TRAI recommendation permitting PC-to-phone calls where ISPs can offer cheaper STD calls and even free local calls. This would result in further reduction of voice tariffs. This would lead to increased focus on MVAS by mobile operators.
3.2 Acquiring New Subscribers through expansion in Rural India
Acquiring customers have always been a great challenge for companies. Given the current level of saturation in Metros and Urban Market and cut throat competition among operators , increasing subscriber base in urban market would be all the more challenging. Therefore a lot of operators with adequate support from Government are eyeing the rural market for future growth. Big operators like Airtel have claimed that soon mobile connections and recharge vouchers etc will be available at all such places from where people buy match boxes. This certainly explains the future penetration of these services in remotest of villages.
4 Key trends in telecom industry 4.1 Mobile Number portability (MNP)
One of the most frequent definitions that prevail in the telecom circles for number portability is: "Number portability is a circuit-switch telecommunications network feature that enables end users to retain their telephone numbers when changing service providers, service types, and or locations." Why mobile number portability (MNP)? When fully implemented nationwide by both wire line and wireless providers, portability will remove one of the most significant deterrents to changing service, providing unprecedented convenience for consumers and encouraging unrestrained competition in the telecommunications industry. In short, this is the best method to increase the efficiency of the service provider by increasing the competition, thereby ensuring better services in all respects. From the subscribers perspective, this is a deceptively simple and very welcome change, because they Can change wireless service providers without worrying about notifying friends, family and business 13
Contacts that their wireless number is changing. In addition, being able to port a number from one Provider to another eliminates the hassle and expenses of changing business cards, stationery, invoices And other materials for businesses
MNP Data
Operator Vodafone Idea Aircel Airtel BSNL Port-In 94747 74978 36650 77240 13522 Port-Out 44041 43011 14574 60970 61315 Table: 4 Net Gain/Loss 50706 31967 22076 16270 -47793 Port-In to Out ratio 2.15 1.74 2.51 1.27 0.22
4.2 Wimax v/s 3G
The WiMAX vs. 3G cellular showdown is poised to become one of the next great market battles in the telecom industry. Fortunes will be made and lost in this battle, and the user experience of the Internet will be irreversibly changed in the process. 3G scores for voice; Wimax may lead to increased broadband penetration. With the Department of Telecommunications gearing up for simultaneous release of 3G and WiMax spectrum, analysts expect the two emerging wireless technologies to battle it out for supremacy. WiMax or Worldwide Interoperability for Microwave Access is a telecom technology that enables wireless transmission of data. The technology is available as IEEE 802.16D (fixed) and IEEE 802.16E (mobile). It offers downloads of up to 70 Mbps as compared to the 15 Mbps that 3G provides. Mobile WiMax offers download speeds of around 20 Mbps. In India, companies like Tata Communications Internet Services, Intel, Bharat Sanchar Nigam Ltd, Bharti Airtel and Reliance Communications are the proponents of WiMax. Most of the companies have had beta-runs of the technology. According to a top official with a service provider, telecom service providers are in various stages of WiMax implementation. Some companies have commercially launched fixed WiMax services in certain cities.
4.3 IPTV
IPTV (Internet Protocol Television) delivers television programming to households via a broadband connection using Internet protocols. It requires a subscription and IPTV set-top box, and offers key advantages over existing TV cable and satellite technologies. IPTV is typically bundled with other services like Video on Demand (VOD), voice over IP (VOIP) or digital phone, and Web access, collectively referred to as Triple Play. Because IPTV arrives over telephone lines, telephone companies are in a prime position to offer IPTV services initially, but it is expected that other carriers will offer the technology in the future. IPTV promises more efficient streaming than present technologies, and therefore theoretically reduced prices to operators and subscribers alike. However, it also adds many advantages that may play into market pricing. 14
One of the advantages of IPTV is the ability for digital video recorders (DVRs) to record multiple broadcasts at once. According to Alcatel, one leading provider, it will also be easier to find favorite programs by using "custom view guides." IPTV even allows for picture-in-picture viewing without the need for multiple tuners. You can watch one show, while using picture-in-picture to channel surf! IPTV viewers will have full control over functionality such as rewind, fast-forward, pause, and so on. Using a cell phone or PDA, a subscriber might even utilize remote programming for IPTV. For example, if a dinner function runs longer than expected, you don't have to miss your favorite program. Just call home and remotely set the IPTV box to record it.
5 Industry Updates 5.1 Consolidation in Industry.
Telecom players are looking to tap into global funds to finance their aggressive growth plans. This will result in partnerships joint ventures and equity sellout to foreign players. New license holders will continue to look to sell their stake at a premium. New policies will seek to curb this license arbitrage. Smaller players with operations in only a few circles will find in difficult to compete with the nationwide players. The industry may see consolidation with these smaller operators being acquired by the larger ones. Unbundling of the corporation will continue as companies will seek f or economies of scale and lower startup cost by infrastructure sharing. 3G and WiMax license will spur M&A and partnership activity
5.1.1 Idea Cellulars Acquisition of Spice Telecom
There were three transactions as part of this acquisition; acquisition of shares of Spice, a non-compete fee and a capital infusion of about Rs 7300 crores received from TM International Bhd (TMI). With respect to shares, Idea acquired 40.8% stake of Spice Communications at Rs 77.30 a share for Rs 2,716 crore. There was a share swap in which Spice shareholders got 49 Idea shares for every 100 Spice shares held. An additional Rs 544 crore was paid to the promoters of Spice group as 'non-compete fee'. The deal was strategically important for Idea Cellular as it was looking forward to transfer itself into a pan-India telecom service provider. The spectrum auctioned by GoI is a scarce resource nowadays and cost a premium. Also theres restriction by TRAI with respect to number of operators per telecom circle. So it makes sense to acquire a small telecom operator. Small players like Spice Telecom operating at only a few circles(Karnataka and Punjab) will find difficult to compete with the nationwide players in the long run. So it was a win-win deal for both companies
5.1.2 Vodafones entry into India
Vodafone paid a discounted price of $10.9 billion in cash for acquiring the 52% stake held by Hutchison Telecom International (HTIL) in Indian mobile firm Hutch-Essar. HTIL declared a special dividend of 6.75 HK dollars per share following the completion of the formalities. The final price was a reduction of $180 million from the originally agreed price of $11.08 billion. Vodafone is the largest mobile telecommunications network company in the world. The deal gave them 15
access to one of the fastest growing mobile markets in the world
5.1.3 Telenor-Unitech Deal
Norwegian Telecom major Telenor is in the process of acquiring controlling stake of 67.25% in Unitech wireless via equity infusion. The enterprise valuation of Unitech Wirelsss is about Rs 10,900 crore. As per the deal, Telenor will infuse cash in four stages and at each phase, by increasing its stake in Unitech Wireless. In the first phase, they got 33.5% ownership in Unitech Wireless. In the second phase they completed the acquisition for a 49 per cent stake in Unitech Wireless by paying Rs 1,130 crore for a further 15.5 per cent stake in the company. The acquisition is expected to be completed by end of this quarter
5.1.4 TTSL DoCoMo Deal.
Japanese carrier NTT DoCoMo acquired 26 per cent stake in Tata Teleservices (TTSL). The Tata DoCoMo-branded GSM service has already started in Southern India and gradually will be expanded nationwide. DoCoMos international expansion plans have not always proven successful, with the firm historically preferring to take small stakes in firms and then try to influence their strategy. It has been less prepared to take majority stakes and impose its will, as other leading carriers have chosen to do. The difficulties faced by the firm in spreading its domestically successful i-mode service internationally typify the obstacles it has faced overseas. With Tata, DoCoMo had said participating proactively in TTSLs management by providing human resources and technical assistance to help realise improved network quality and the possible introduction of leading-edge, value-added services.
5.2 FDI Investments in the Telecom Sector in India:
The Indian telecom industry has always allured foreign investors. In fact, the cumulative FDI inflow, from August 1991 to March 2007, in the telecommunication sector amounted to US$ 7,513.22 million. This makes telecommunication the third-largest sector to attract FDI in India in the post liberalization era. The investment was majorly in handset manufacturing and telecom service provider With stable macroeconomic impetus and numerous other advantages, India has the potential to become the electronics manufacturing hub of the world. Excited by the record-breaking industry growth, investors have outlaid US$ 1.5 billion in the past two and a half years in the Indian telecom sector. India will receive an additional US$ 2 billion investment in the next one year. With the world now recognising Indias
manufacturing potential, the Indian telecom handset manufacturing market is likely
touch US$ 7 billion by 2010. An example is Nokia. The company has already produced 25 million handsets in its Chennai facility. It will pump in an additional US$ 150 million to this set up. The company exports around 20 per cent of its volume to South-east Asia, the Middle East and Africa. Local manufacturing allows companies to avoid 4 per cent countervailing duties on imported handsets, thereby further reducing the cost.
5.3 3G Auction
After 34 days and 183 rounds of bidding, Indias 3G spectrum auction is over. The results are provisional, and subject to government approval. The Indian government has managed to raise Rs. 67,718.95 crores from the auction, with Rs. 50,968.37 crores from private telecom operators, and Rs. 16,750.58 crores 16
from the state owned telecom operators BSNL and MTNL. The two circles of Delhi and Mumbai together account for 39.19% of the total money raised, while the top five circles Delhi, Mumbai, Karnataka, Tamil Nadu and Andhra Pradesh account for 65.56% of the bids.
6 Future Technology Trends 6.1 High Speed Downlink Packet Access (HSDPA)
High Speed Downlink Packet Access (HSDPA) is a packet based technology for W-CDMA downlink with data transmission rates of 4 to 5 times that of current generation 3G networks (UMTS) and 15 times faster than GPRS. The latest release boosts downlink speeds from the current end-user rate of 384 kbps (up to 2 Mbps according to standards) to a maximum value according to standards of 14.4 Mbps. Real life end-user speeds will be in the range of 2 to 3 Mbps. HSDPA provides a smooth evolutionary path for Universal Mobile Telecommunications System (UMTS) networks to higher data rates and higher capacities, in the same way as Enhanced Data rates for GSM Evolution (EDGE) does in the Global System for Mobile communication (GSM) world. The introduction of shared channels for different users will guarantee that channel resources are used efficiently in the packet domain, and will be less expensive for users than dedicated channels.
6.2 4G or Fourth Generation Networks
4G or Fourth Generation is future technology for mobile and wireless comunications. It will be the successor for the 3Rd Generation (3G) network technology. Currently 3G networks are under deployement. Approximatly 4G deployments are expected to be seen around 2010 to 2015. The basic voice was the driver for second-generation mobile and has been a considerable success. Currently , video and TV services are driving forward third generation (3G) deployment. And in the future, low cost, high speed data will drive forward the fourth generation (4G) as short-range communication emerges. Service and application ubiquity, with a high degree of personalization and synchronization between various user appliances, will be another driver. At the same time, it is probable that the radio access network will evolve from a centralized architecture to a distributed one.
7 Conclusion
The Indian Telecom Service provider industry is gearing for a revolution. The customer is driving this revolution and will see more unique and sophisticated offerings coming his way. The 3G which will pave the way for 3.5G, 3.75G and the next big thing-4G and the VAS services will keep the customer asking for more. The rural areas which have remained untapped will see an insurgence of services. Also the 17
easing of the regulations by TRAI, the ease of spectrum licensing, the FDI influx will make the telecom space in India a must watch in the coming years.
8 Bibliography
1. Internet 18
1.1 www.trai.gov.in/Default.asp 1.2 www.wikipedia.org 1.3 http://www.indiastat.com/telecommunication 2. Newspaper 2.1 The Tribune of 5th March 2011 2.2 Economic Times of 12th Jan 2011
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