Indian Telecom Sector
The Indian telecom industry has seen strong growth on the back of a significant rise in mobile subscribers. From a mere 0.3 million subscribers in 1997, the market has grown to over 375 million plus subscribers as at January 2009. India today has the world’s second largest subscriber base after China.
There are monthly additions of 9-10 Mill. plus subscribers, which is highest in the world. The projected growth till 2012 is 650 Mill. subscribers.
The Government has facilitated this by various policy measures. The Policy is governed by National Telecom Policy, 1994, which was amended during 1999 and NTP 99 announced. That was the opening of telecom services to private sector. The Government is represented by Department of Telecom, Ministry of Telecommunications and IT. This is headed by Secretary, Government of India commonly called Secretary, DOT. The Department has a technical wing called Telecom Engineering Center (TEC), which is responsible for laying down standards. This is headed by Senior Deputy Director General.
India has also set up a telecom regulator under the name and style of Telecom Regulatory Authority of India (TRAI). There is another authority called Telecom Dispute Settlement & Appellate Tribunal Authority (TDSAT), which hears the disputes on licensing matters as also inter operator’s disputes.
India having adopted a technology neutral policy, as on date has mix of technologies fixed line and wireless- CDMA, GSM. Presently there are two Public Sector Operators and around 10 existing operators. New Licenses has been given for 5-6 more operators. India permits FDI upto 74% in telecom services.
India has allowed Caller Party Pays (CPP), infrastructure sharing. Calling cards giving flexibility to choose Long Distance operator has also been approved.
The interesting part about India’s rapid growth in mobile telephony is the fact that this growth has come in a market where Average Revenue per User (ARPU) is amongst the lowest in the world and Minutes of Usage (MoU) among the highest.
Broadband penetration presently as at January, 2009 is about 4 Million and targeted to grow to 20 Mill by 2010. The target for the eleventh plan is to provide broadband connectivity to every secondary school, health centre, Gram Panchayat on demand by 2009.
The auction for 3G and BWA are likely to be held during first half of 2009. Policies expected in near future are relating to Mobile Number Portability, allowing net telephony, MVNO.
The All India PSU Telecom operator operating both fixed line and wireless is Bharat Sanchar Nigam Limited (BSNL) headed by a Chairman cum Managing Director and five whole time functional Directors. BSNL has deployed both CDMA as well GSM technologies. BSNL also has a quality assurance wing responsible for quality evaluations of all products called BSNL QA Circle. This is headed by Chief General Manager and located at Bangalore.
Another PSU Telecom operator is Mahanagar Telephone Nigam Limited (MT NL) which operates in two largest Metro Cities of Delhi and Mumbai. MTNL is a listed company headed by Chairman cum Managing director supported by three functional whole time Directors. MTNL also has deployed both CDMA and GSM technologies. Private Operators include GSM based all India operating Airtel (Bharti Group), Vodafone, Idea Cellular, Aircel. There are two CDMA all India operators namely Reliance and Tata. There is one CDMA operator namely HFCL Infotel for Punjab State. The promoters of this Group has equity stake in a new All India operator namely Datacom. There was another single State CDMA operator namely Shyam Telecom fo Rajasthan but that now stands merged with new All India Operator Systema. Another regional player Spice Telecom has merged with Idea Cellular.
To address the rural telephony demands, Government has set up a Universal Service Fund, which is headed by an Administrator. Rural telephony targets were also set under another developmental initiative called Bharat Nirman.
Government has initiated Public Private Partnership Model for Research and Development by establishment of Technical Centers of Excellence with R&D Institutes, Government and telecom operators.
Manufacturing Telecom equipments is also on high priority of Government. 100% FDI is permitted.