INTRODUCTION TO TELECOM INSUSTRY
OF INDIA
The Indian telecom sector can be broadly classified into Fixed Line
Telephony and mobile telephony. The major players of the telecom
sector are experiencing a fierce competition in both the segments.
The major players like BSNL, MTNL, VSNL in the fixed line and Airtel,
Hutch, Idea, Tata, Reliance in the mobile segment are coming up with
new tariffs and discount schemes to gain the competitive advantage.
The Public Players and the Private Players share the fixed line and
the mobile segments. Currently the Public Players have more than
60% of the market share.
Indian Telecom sector, like any other industrial sector in the country,
has gone through many phases of growth and diversification. Starting
from telegraphic and telephonic systems in the 19th century, the field
of telephonic communication has now expanded to make use of
advanced technologies like GSM, CDMA, and WLL to the great 3G
Technology in mobile phones.
Day by day, both the Public Players and the Private Players are
putting in their resources and efforts to improve the
telecommunication technology so as to give the maximum to their
customers.
India's total telecom subscriber base touched 429.72 million for the
quarter ending March taking the teledensity up to 36.98
This is against 384.79 million for the quarter ending December 2008,
11.68% increase. Wireless subscribers increased to 391.76 million
(346.89 million) while wire line subscribers increased to 37.96 million
(37.90 million).
Rural wire line subscribers decreased by 0.93% to 10.58 million
(10.68 million) while in contrast, rural wireless subscribers grew
17.77% to 109.71 million (93.15 million).
The number of Public Call Offices (PCOs) also increased by 3.68% to
6.20 million (5.98 million). In the GSM segment, the all India blended
ARPU per month decreased 6.82% from Rs 220 in December 2008
to Rs 205 in March 2009. ARPU for postpaid services declined 2.8%
to Rs 543 (Rs 559) and 6% for prepaid services to Rs 181 (Rs 192).
For CDMA, the all India monthly blended ARPU dropped to Rs 99 (Rs
111). The huge difference between postpaid and prepaid ARPU
noticed in the last quarter remains valid for the current quarter as well
in the CDMA market. Postpaid ARPU was 5 times that of prepaid
ARPU, which could be attributed to declining importance of
processing fee on recharge coupon/voucher purchased by prepaid
subscribers.
Internet subscribers grew 5.30% to 13.54 million (12.85 million)
while broadband subscribers (with a download speed of 256 Kbps or
more) grew 12.68% to
Evolution of the industry-Important
Milestones
History of Indian Telecommunications
Year
1851 First operational land lines were laid by the
government near Calcutta (seat of British power)
1881 Telephone service introduced in India
1883 Merger with the postal system
1923 Formation of Indian Radio Telegraph Company (IRT)
1932 Merger of ETC and IRT into the Indian Radio and Cable
Communication Company (IRCC)
1947 Nationalization of all foreign telecommunication
companies to form the Posts, Telephone and Telegraph
(PTT), a monopoly run by the government's Ministry of
Communications
1985 Department of Telecommunications (DOT) established,
an exclusive provider of domestic and long-distance service
that would be its own regulator (separate from the postal
system)
1986 Conversion of DOT into two wholly government-owned
companies: the Videsh Sanchar Nigam Limited (VSNL) for
international telecommunications and Mahanagar Telephone
Nigam Limited (MTNL) for service in metropolitan areas.
1997 Telecom Regulatory Authority of India created.
1999 Cellular Services are launched in India. New National
Telecom Policy is adopted.
2000 DoT becomes a corporation, BSNL
Major Players
There are three types of players in telecom services:
• -State owned companies (BSNL and MTNL)
• -Private Indian owned companies (Reliance Infocomm,
Tata Teleservices,)
• -Foreign invested companies (Hutchison-Essar, Bharti Tele-
Ventures, Escotel, Idea Cellular, BPL Mobile, Spice
Communications)
BSNL
On October 1, 2000 the Department of Telecom Operations,
Government of India became a corporation and was
renamed Bharat Sanchar Nigam Limited (BSNL).
BSNL is now India’s leading Telecommunications Company
and the largest public sector undertaking. It has a network
of over 45 million lines covering 5000 towns with over 35
million telephone connections.
The state-controlled BSNL operates basic, cellular (GSM and
CDMA) mobile, Internet and long distance services
throughout India (except Delhi and Mumbai). BSNL will be
expanding the network in line with the Tenth Five-Year Plan
(1992-97).
The aim is to provide a telephone density of 9.9 per
hundred by March 2007. BSNL, which became the third
operator of GSM mobile services in most circles, is now
planning to overtake Bharti to become the largest GSM
operator in the country. BSNL is also the largest operator in
the Internet market, with a share of 21 per cent of the
entire subscriber base
BHARTI
Established in 1985, Bharti has been a pioneering force in
the telecom sector with many firsts and innovations to its
credit, ranging from being the first mobile service in Delhi,
first private basic telephone service provider in the country,
first Indian company to provide comprehensive telecom
services outside India in Seychelles and first private sector
service provider to launch National Long Distance Services in
India. Bharti Tele-Ventures Limited was incorporated on July
7, 1995 for promoting investments in telecommunications
services. Its subsidiaries operate telecom services across
India. Bharti’s operations are broadly handled by two
companies: the Mobility group, which handles the mobile
services in 16 circles out of a total 23 circles across the
country; and the Infotel group, which handles the NLD, ILD,
fixed line, broadband, data, and satellite-based services.
Together they have so far deployed around 23,000 km of
optical fiber cables across the country, coupled with
approximately 1,500 nodes, and presence in around 200
locations. The group has a total customer base of 6.45
million, of which 5.86 million are mobile and 588,000 fixed
line customers, as of January 31, 2004. In mobile, Bharti’s
footprint extends across 15 circles.
Bharti Tele-Ventures' strategic objective is “to capitalize on
the growth opportunities the company believes are available
in the Indian telecommunications market and consolidate its
position to be the leading integrated telecommunications
services provider in key markets in India, with a focus on
providing mobile services”.
MTNL
MTNL was set up on 1st April 1986 by the Government of
India to upgrade the quality of telecom services, expand the
telecom network, and introduce new services and to raise
revenue for telecom development needs of India’s key
metros – Delhi, the political capital, and Mumbai, the
business capital. In the past 17 years, the company has
taken rapid strides to emerge as India’s leading and one of
Asia’s largest telecom operating companies. The company
has also been in the forefront of technology induction by
converting 100% of its telephone exchange network into the
state-of-the-art digital mode. The Govt. of India currently
holds 56.25% stake in the company. In the year 2003-04,
the company's focus would be not only consolidating the
gains but also to focus on new areas of enterprise such as
joint ventures for projects outside India, entering into
national long distance operation, widening the cellular and
CDMA-based WLL customer base, setting up internet and
allied services on an all India basis.
MTNL has over 5 million subscribers and 329,374 mobile
subscribers. While the market for fixed wire line phones is
stagnating, MTNL faces intense competition from the private
players—Bharti, Hutchison and Idea Cellular, Reliance
Infocomm—in mobile services. MTNL recorded sales of Rs.
60.2 billion ($1.38 billion) in the year
2002-03, a decline of 5.8 per cent over the previous year’s
annual turnover of Rs.
63.92 billion.
RELIANCE INFOCOMM
Reliance is a $16 billion integrated oil exploration to refinery
to power and textiles conglomerate. It is also an integrated
telecom service provider with licenses for mobile, fixed,
domestic long distance and international services.
Reliance Infocomm offers a complete range of telecom
Services, covering mobile and fixed line telephony including
broadband, national and International long distance
services, data services and a wide range of value added
Services and applications. Reliance India Mobile, the first of
Infocomm's initiatives was launched on December 28, 2002.
This marked the beginning of Reliance's vision of ushering in
a digital revolution in India by becoming a major catalyst in
improving quality of life and changing the face of India.
Reliance Infocomm plans to extend its efforts beyond the
traditional value chain to develop and deploy telecom
solutions for India's farmers, businesses, hospitals,
government and public sector organizations.
Until recently, Reliance was permitted to provide only
“limited mobility” services through its basic services license.
However, it has now acquired a unified access license for 18
circles that permits it to provide the full range of mobile
services. It has rolled out its CDMA mobile network and
enrolled more than 6 million subscribers in one year to
become the country’s largest mobile operator.It now wants
to increase its market share and has recently launched pre-
paid services. Having captured the voice market, it intends
to attack the broadband market.
VODAFONE
Hutch’s presence in India dates back to late 1992, when
they worked with local partners to establish a company
licensed to provide mobile telecommunications services in
Mumbai. Commercial operations began in November 1995.
Between 2000 and March 2004, Hutch acquired further
operator equity interests or operating licenses. With the
completion of the acquisition of BPL Mobile Cellular Limited
in January 2006, it now provides mobile services in 16 of the
23 defined license areas cross the country.
Hutch India has benefited from rapid and profitable growth
in recent years. it had ver 17.5 million customers by the end
of June 2006.
IDEA
Indian regional operator IDEA Cellular Ltd. has a new
ownership structure and grand esigns to become a national
player, but in doing so is likely to become a thorn in he side
of Reliance Communications Ltd. IDEA operates in eight
telecom “circles,” or egions, in Western India, and has
received additional GSM licenses to expand its network
circles in Eastern India -- the first phase of a major
expansion lan that it intends to fund through an IPO,
according to parent company Aditya Birla
Group.
ABOUT RELIANCE COMMUNICATION
Reliance Communications is the flagship company of the Anil
Dhirubhai Ambani Group (ADAG) of companies. Listed on the
National Stock Exchange and the Bombay Stock Exchange, it is
India’s leading integrated telecommunication company with over 85
million customers.
Their business encompasses a complete range of telecom services
covering mobile and fixed line telephony. It includes broadband,
national and international long distance services and data services
along with an exhaustive range of value-added services and
applications. Our constant Endeavour is to achieve customer delight
by enhancing the productivity of the enterprises and individuals we
serve.
Reliance Mobile (formerly Reliance India Mobile), launched on 28
December 2002, coinciding with the joyous occasion of the late
Dhirubhai Ambani’s 70th birthday, was among the initial initiatives of
Reliance Communications. It marked the auspicious beginning of
Dhirubhai’s dream of ushering in a digital revolution in India. Today,
we can proudly claim that we were instrumental in harnessing the
true power of information and communication, by bestowing it in the
hands of the common man at affordable rates.
We Endeavour to further extend our efforts beyond the traditional
value chain by developing and deploying complete telecom solutions
for the entire spectrum of society.
Reliance Communications has a reliable, high-capacity, integrated
(both wireless and wire line) and convergent (voice, data and video)
digital network. It is capable of delivering a range of services
spanning the entire infocomm (information and communication) value
chain, including infrastructure and services — for enterprises as well
as individuals, applications, and consulting.
Today, Reliance Communications is revolutionizing the way India
communicates and networks, truly bringing about a new way of life.
COMPANY PROFILE OF RELIANCE
COMMUNICATION
Chairman’s profile
Reliance Communications Limited founded by the late Shri. Dhirubhai
H Ambani (1932-2002) is the flagship company of the Reliance Anil
Dhirubhai Ambani Group. It is India's foremost truly integrated
telecommunications service provider. With a customer base of over
36 million including close to one million individual overseas retail
customers, Reliance Communications ranks among the top ten Asian
Telecom companies. Its corporate clientele includes 600 Indian, 250
multinational corporations and over 200 global carriers and owns and
operates the world's largest next generation, IP enabled connectivity
infrastructure, comprising over 150,000 kilometers of fiber optic cable
systems in India, USA, Europe, Middle East and the Asia Pacific
region.
Regarded as one of the foremost corporate leaders of contemporary
India, Shri Anil D Ambani, 48, is the chairman of all listed companies
of the Reliance ADA Group, namely, Reliance Communications,
Reliance Capital, Reliance Energy and Reliance Natural Resources.
He is also the president of the Dhirubhai Ambani Institute of
Information and Communications Technology, Gandhinagar
An MBA from the Wharton School of the University of Pennsylvania,
Shri Ambani is credited with pioneering several financial innovations
in the Indian capital markets. He spearheaded the country’s first
forays into overseas capital markets with international public offerings
of global depositary receipts, convertibles and bonds.
Under his chairmanship, the constituent companies of the Reliance
ADA group have raised nearly US$ 3 billion from global financial
markets in a period of less than 15 months.
Shri Ambani has been associated with a number of prestigious
academic institutions in India and abroad.
He is currently a member of:
• Wharton Board of Overseers, The Wharton School, USA
• Board of Governors, Indian Institute of Management (IIM),
Ahmedabad
• Board of Governors, Indian Institute of Technology (IIT), Kanpur
• Executive Board, Indian School of Business (ISB), Hyderabad
CONCEPT OF RELIANCE COMMUNICATION
Anil Ambani: Telecom person of the year 2007
His marketing strategy has made millions of Indians happy, they got the
best mobile tariffs in the world-local call costs at 15 paisa/minute, and
STD call at 40 paisa/minute
NEW DELHI, INDIA: When the VOICE&DATA jury, comprising
eminent professionals from the telecom field, met in Delhi in June to
choose the Telecom Person of the Year 2007, the five-hour selection
process was steamy.
The reason was obvious: The telecom sector is growing faster than
any other segment and naturally their CEOs have a lot to crow about.
The jury had to select one from three CEOs, who had made it to the
final list through nominations from the industry and the initial scrutiny.
Among the three, one of the main contenders was a young CEO. The
jury decided that he should come back next year to try and win the
coveted award. The list now had two names-both CEOs of two well-
known companies. The pivotal difference between the two: one is an
entrepreneur and the other is not so popular, as his credit is shared
among a number of his big daddies.
Following a five-hour closely held, hotly debated discussion, the
name was announced: Anil Dhirubhai Ambani, chairman of Reliance
Communications. Anil Ambani joined Reliance Industries (currently
promoted by his brother Mukesh Ambani, following their split) in 1983
as co-chief executive officer. Forbes ranked him number 104 among
the World's Richest People in 2006. The Ambani family faced
criticism when it announced its ambitious plans to build a countrywide
telecom network, as its prior expertise lay in commodities-textiles and
petrochemicals-business only. Apart from that telecom needs a
service-oriented mindset, critics felt. What they did not remember was
how the family had served its millions of shareholders.
Policies in India are made in line with Ambani's vision, says an
industry expert. His business acumen and closeness to politicians
assisted him in making it to the Rajya Sabha in June 2004, as an
independent member. Ambani chose to resign voluntarily on March
25, 2006.
The same association with politicos gave him negative returns too
when the Mayawati Government in Uttar Pradesh put a spanner on
his ambitious plans to build a 1,200-acre SEZ.
Media sees his aggression when he announces financial results for
the Reliance ADA group of companies, and when he attends the
annual general meetings and faces questions from shareholders.
When he meets the press, he has answers to all their questions. He
also remembers to call select journalists by name.
To merchant bankers he, who has already contributed immensely to
the financial reforms of the country, is one of the financial wizards of
the world. May be because of his expertise, he gave up in the race to
grab Hutchison Essar stake, after indirectly jacking up the valuation.
His negotiations with the Qualcomm chief are also a folk theory now.
How did Ambani become the VOICE&DATA Telecom Person of the
Year 2007? What are his personal and organizational achievements
in the recent past?
.
Achiever's Pride
• Undertook financial restructuring of Reliance communications
• To spend Rs 16,000 crore to expand and strengthen network
coverage
• After expansion, Reliance Communications will have the single
largest wireless network in the world
• Launched the lowest-cost classic brand handset at Rs 777
• Subscriber base grew to over 28 mn during last fiscal,
registering 60% growth
• Total Revenue shot up to Rs 14,468 crore, an increase of 34%
• Net Profit rises to Rs 3,163 crore, an increase of over 600%
• Revenues of the wireless business increased by 46% to Rs
10,728 crore
• Broadband achieved revenue growth of 123% to Rs 1,144 crore
• Market capitalization crossed Rs 100,000 crore
• Will add 23,000 more towers
• Telecom services will be available in over 23,000 towns and
600,000 villages
• Next generation DTH network will be launched before end of
the year
Reliance Communications' wireless subscriber base grew to over 28
mn last fiscal, registering a 60% growth. This makes it one of the top
two wireless operators in India.
"Economic growth in the future will be indexed to connectivity of
millions of enterprise and individual customers. Over the next few
years, we will have over 100 million customers, making us one of the
top 5 telecom players in the world. In four years, we put up a total of
14,000 towers across the country. This year alone we will add 23,000
more towers. Our wireless network is currently available in 10,000
towns. By the end of this year, it will be available in over 23,000
towns and 600,000 villages,"
Anil Ambani said at the first annual general meeting of Reliance
Communications since the re-organization of the Reliance Group in
June 2005.
"In four years of operations, we invested around Rs 32,000 crore.
This year alone we will invest over Rs 20,000 crore. At the end of this
year, we will have covered over 90% of our population. If Version 1.0
of the Indian telecom story was all about affordability, Version 2.0 will
be about reach. Our Network expansion will give us the power to
drive the market and stay ahead of the curve," Ambani adds.
According to Ambani, the financial restructuring of Reliance
Communications is the biggest turnaround story in the history of
corporate India. The inherited ownership structure of Reliance
Communications was complex. The reorganization has yielded a
simple, fair, and transparent ownership structure, and given Reliance
Communications 100% ownership of all operational and associate
companies.
Reliance Communications is now among the three most valuable
private sector companies in India, and the five most valuable telecom
companies in Asia. In the current
Fiscal, Reliance Communications will spend Rs 16,000 crore to
further expand and strengthen its network coverage across India and
the rest of the world.
In addition to organic growth, Reliance Communications will leverage
the advantages derived from this impressive financial platform to
explore and pursue any significant opportunities available in the
telecommunications sector. "We are currently evaluating a number of
inorganic opportunities in select international markets to further
expand our footprint," Ambani said.
Reliance Communication’s One India, One Tariff plan allowed millions
to connect across India at just one rupee a minute. The company was
the first one to break the Rs 1,000 entry-barrier with the launch of the
lowest-cost classic brand handset at Rs 777.
As per its expansion plan, Reliance Communications will have the
single largest wireless network in the world, covering over 900 mn
Indians or more than 15% of the global population. It will cover
23,000 towns or every single Indian habitation with a population of
over 1,000. Reliance Communications will cover almost 100% of all
rail routes, providing seamless voice, video, radio, and Internet
connectivity to 14 mn commuters every day. It will also cover almost
100% of all national highways, and 84% of all state highways, giving
millions of users the power to talk, text, surf, play, chat or simply stay
in touch across nearly the entire length of India's 2,00,000-km-long
road network.
Having achieved tremendous growth, the main challenge for Reliance
Communications is to improve quality of service and ARPU. Its
enterprise business is also not in a position to compete with the
global majors. Stock market valuations may boost the fortunes of an
entrepreneur, but Ambani needs to address the issues faced by the
growing mobile customer base, especially in India, where
bureaucracy takes pride in checking the businessman.
ORGANIZATIONAL SET UP
CHAIRMAN
PRESIDENT PRESIDENT
PRESIDENT
(PRESONAL (ENTERPRISES
(HOME
BUSINESS) BUSINESS)
BUSINESS)
SENIOUR
V.P
V.P
GM
DGM
AGM
SENIOUR
MANAGER
MANAGER
DUPTY
MANAGER
ASST.
MANAGER
MANAGEMENT
TRAINING
