An Information Report On Telecom Industry Mobile

Submitted to Joel Sarosh ON 4th Feb. 2012 In PGDM

Submitted By Sahil sherasiya Roll No. 1011113050 Section B

TELECOM INDUSTRY - INDIA 1. Executive Summary:

While the global economic downturn has adversely affected almost all the industry sectors, the Telecom Industry stands out as an exception. Large investments have been planned in the sector during the ensuing year on the back of rapid pace of subscriber additions, introduction of new technologies such as 3G, Wi-Max, Internet Protocol Television (IPTV) etc. and Re1gulator driven initiatives. All major players in the industry are banking with us and 88% of the exposure of the sector is in the CAG portfolio.

While the sector is on a growth trajectory, the declining Average Revenue per User (ARPUs), increasing Minutes of Usage (MoUs) and introduction of Mobile Number Portability (MNP) etc are expected to affect the Sector margins. The increasing competition, with the presence of 9-10 number of players in one circle (highest in the world), is bound to tigger new initiatives in the near future. However, the break even period for new players is expected to be around 6-7 years. While the outlook for the existing service providers will be positive, it is expected to be neutral for new service providers, in view of the stiff competition they would face from the established players. The outlook for the Telecom Equipment Manufacturers is expected to be neutral on account of increase in imports to meet the high demand as also sharing of network infrastructure. 2. Industry Overview: The Indian Telecom industry is one of the fastest growing sectors in the country. The Industry, unlike others, was not hit to a great extent by the recent slowdown in the economy. Telecom Service Providers are the main drivers of the Telecom Industry whereas equipment manufacturers witness uncertainties as the orders for transmission towers and other hardware are spread out unevenly over time. Large investments are being planned in infrastructure to enable rollout of services in hitherto uncovered areas and to enhance capacities. The number of telephone connections in the country (mobile and landline) crossed 429 million in March 2009, as against 300 million in March 2008,

registering a growth of 43%. The overall tele-density has reached 37% in March 2009 as against 26% in March 2008. The Industry has also witnessed the entry of global players such as Telenor, Swan, and NTT DoCoMo indicating that substantial growth potential exists, which is also evident from the fact that India has been adding more than 10 million subscribers every month.

3. Industry structure: The Telecom Industry consists of two segments; Telecom Service Providers

Telecom Equipment Manufacturers 4. Telecom Service Providers: Telecom Services can be divided into the following segments: i. Wireless Segment consisting of Global System for Mobile Communications (GSM) & Code Division Multiple Access (CDMA) (Mobile) Wireline Segment (Fixed Line) Internet and Broadband Segment

ii. iii.

For purposes of allocation of Spectrum, India is divided into 22 Circles

consisting of 4 Metropolitan areas and 18 Non-Metro areas. These areas have been classified into three categories A, B and C, on the basis of revenue generating potential with the Category-A Circle having the highest revenue potential.
Categories of Circles Metros Chennai, Delhi, Kolkata, Mumbai Category A Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Tamilnadu. Category B Haryana, Kerala, Madhya Pradesh, Punjab, Rajasthan, Uttar Pradesh (East) Category C Assam, Bihar, Himachal Pradesh, Jammu & Kashmir, North East, Orissa

India added 15.64 million mobile subscribers in March 2009, and set the global record for adding the maximum number of users in a single month.

According to the Telecom Regulatory Authority of India (TRAI), the Mobile Segment accounts for close to 92% of the countrys Telecom market. The total mobile base stood at 452.90 million by end May 2009. Major Players: Bharti-Airtel, Vodafone-Essar, Idea, Aircel, RCom, Tata Telecommunication, BSNL, MTNL, Swan, Telecor 4.1 Key Developments:
Department of Telecom (DoT) has initiated the process of imposing penalties on Telecom Operators for violating Subscriber Verification Norms. Operators have to pay a penalty of Rs.2,000 for each subscriber taken on without proper identification document.

The Defence Services have demanded that a portion of 3G spectrum should be reserved for their communication needs. DoT has decided to have an exclusive band for the Defence Services with commercial users allowed access to the civilian band only. DoT has modified the rollout obligations for new Telecom Operators. The new entrants need to roll out services within one year from the date of allotment of Spectrum, as against within a year of getting the licence. The amount of penalty for delay has also been reduced. New Entrants would earlier have had to pay a total of over Rs.51 crs. in penalties by April, 2009. However, with the modified obligation the penalty would now be Rs.2.6 crs. payable by July 2009. DoT is partnering with Private Telecom Operators to set up wireless broadband infrastructure in rural areas. Companies

selected through the competitive bidding route will get financial support from the Universal Service Obligation (USO) Fund. 4.2Regulatory Initiatives and Policies TRAI, facilitates rollout of new technologies and applications, keeps check on tariffs, allocates spectrum and recommends improvement to the Government and Industry alike. The Cabinet Committee on Economic Affairs (CCEA) has adopted new guidelines for computation of foreign equity holding in Indian companies. The new norm is expected to allow companies to raise the level of foreign investment and which will benefit all such companies that have touched their Foreign Direct Investment (FDI) ceiling. FDI is permitted to the extent of 100% through the automatic route in Telecom Equipment Manufacturing while the ceiling in Telecom Services has been raised to 74 %. Unified Access Licensing is being introduced for telecom services on a pan-India basis. DoT has proposed an additional one-time charge for spectrum held beyond 6.2 MHz (for GSM Operators) and 5 MHz (for CDMA Operators), which would impact negatively on GSM Operators but would be neutral for CDMA Operators. The Government is implementing a program for connecting 66,822 hitherto uncovered villages under the Bharat Nirman Programme. The Government also intends to invest Rs.10,000 crs. in setting up 1.12 lakh Community Service Centres in rural India to provide broadband connectivity. DoT has allowed passive infrastructure sharing among operators, which includes sharing of physical sites, buildings, shelters, towers, power supply and battery backup. They have also allowed sharing of active infrastructure which presently has been limited to Antenna, Feeder Cable, Node B, Radio Access Network and Transmission systems. Sharing of spectrum has not been permitted. TRAI has slashed the termination fee paid by operators by 33%, which will help Telecom companies reduce their Local as well as National Long Distance (NLD) tariffs by upto 20%.

 4.4 3G Services India will shortly join the list of more than 100 countries that offer fullfledged 3G services. 3G is expected to facilitate the implementation of important e-initiatives such as e-governance, e-education, and telemedicine to name a few. 3G will also be instrumental in alleviating the severe spectrum crunch being faced by many operators, especially in the metros and big cities, where there is not enough 2G spectrum to fuel aggressive growth. 3G could also facilitate the delivery of far more costeffective voice services because of its higher voice capacity.
In India, 3G handset proliferation would be the single biggest driver of 3G services, at least in the preliminary phase, as it would widen the target base for 3G service providers. Currently, 2-3% of the total handsets in the market are capable of accessing 3G services and approximately 8% of incremental handsets sold every month are 3G enabled. The reserve price for an all India licence for 3G is expected to be around Rs.4,000 crs At this price, the Government could garner at least Rs.30,000 crs. from their auctions. The Industry would also require substantial level of investments for driving their 3G allocation programme.

The nine-member Empowered Group of Ministers (EGoM) headed by the Finance Minister is slated to take a final call on the various outstanding and unresolved issues (Reserve Price, Number of Blocks to be auctioned). 3G spectrum auctions is now expected to take place in Oct/Nov 09 at the earliest. The 3G subscriber base is expected to reach 90 million by 2013 with revenues touching Rs.80,000 crs, and would account for 46% of the total wireless revenues. Furthermore, 3G availability would help in solving the problem of low broadband penetration in India.
MTNL (in Delhi and Mumbai under the brand Jadoo) and BSNL has

already launched 3G services and are tying up with Internet Protocol TV (IPTV)providers to provide content for 3G services. MTNL is looking to tap its 15,000 IPTV subscribers in Delhi and Mumbai for 3G services.

4.4Mobile Number Portability: The implementation of Mobile Number Portability (MNP) would give subscribers the liberty to switch operators while retaining the same call number. DoT has awarded licences to Syniverse and Telecordia, for the launch of this service which will be done in a phased manner, starting with the metros and a few category 'A' circles during the third quarter of 2009-10. The large mobile operators will be more susceptible to competition in the implementation of MNP as compared to the relatively new players. Large players will witness a 1.5-2.0% increase in their churn rates, resulting in a contraction in operating margins on a pan-India level by about 250-300 basis points (bps). On the other hand, a new entrant managing to garner 10% of this subscriber churn by weaning them away from incumbent operators could achieve an EBITDA break-even in 6-7 years as compared to earlier estimates of 8-9 years. 4.5Competition:
The industry is witnessing stiff competition with the entry of new players and with each Circle comprising of more than 10 players which is one of the highest concentrations anywhere in the world. The industry is also likely to witness a variety of marketing and product service strategies as new entrants try to gain a foothold by launching value added services to take on the strength of the established players. As stated earlier the implementation of Mobile Number Portability (MNP) will give new licencees an opportunity to attract subscribers of other operator networks, provided they are able to deliver Quality of Service (QoS) and content.

DoT and TRAI have enforced a three-year lock-in period, whereby new entrants cannot sell equity. This would help to prevent the entry of not so serious Operators into the Telecom Industry. Of the 9 companies that were issued 121 licenses, the 6 new entrants are Unitech Wireless, Swan Telecom, S Tel, Loop Telecom, Datacom and Shyam Telelink. These companies have been allotted spectrum in most of the Circles and are now in the process of entering into alliances with either Foreign or Domestic players.

Operator

Unitech Wireless Swan Telecom Datacom Loop Telecom Shyam Telelink

S Tel

Operators Snapshots Promoter(s) No. Licensed Circles Unitech 22 Dynamix Balwas 13 Group Videocon 22 Essar Group, BPL 21 Mobile Shyam Group, 22 (Russia Based Sistema) Skycity Foundations, 6 Telecom Investments

of Start up Spectrum (No. of Circles) 21 13 17 13 22

More particulars about the new operators are furnished in Annexure I 4.6Value Added Services (VAS) Venture Capitalist firms such as Canaan Partners, Draper Fisher Juvertson, Helion, and Nexus India are looking to fund innovation in services such as mobile payment options, advertising, voice-based SMS and Satellite Video Streaming. Mobile Value Added Services (VAS) is estimated to be a Rs.3,500 crs. market with a 20% y-o-y growth and which is likely to touch Rs.15,000 crs. by 2012. VAS were valued at Rs.5,700 crs. in June 2008, and is expected to grow rapidly at a CAGR of 70% to touch Rs. 9,400 crs. by June 2009. Currently, VAS in India accounts for about 10% of the operator's revenue which is expected to reach 18% by 2010. 4.7 Growth Drivers: Growth in mobile services has been driven by a sharp fall in subscription costs and rising incomes which have increased the affordability of mobile services. The following are the major factors which are expected to drive the growth of the industry:
Decreasing Cost of Subscription: The cost of life-time prepaid cards has fallen from Rs.999 to Rs. 99. The availability of low denomination pre-paid vouchers, bundled offerings and other product innovations have made mobile services affordable in semi-urban and rural markets. Moreover, with increasing competition in the mobile handset manufacturing segment, the cost of an entry level handset has fallen considerably.

Favourable Regulatory Environment: The Governments Telecom Policy initiatives have been growth-oriented and forward looking. Various incentives such as increase in foreign investment limits to 74%, implementation of the Unified Access Licensing Regime (UASL), availability of the Universal Service Obligation (USO) fund for enabling expansion in rural areas and introduction of MNP have led to the proliferation of mobile services in the country.
IPTV and DTH Direct-to-Home (DTH) industry revenues are expected to be around Rs.12,500 crs by 2013. In the near future, consolidation of DTH services would take place along with increased interest in Internet Protocol Television (IPTV), Streaming Video on Demand, Interactive Games etc.

Low Penetration Levels: The Indian wireless industry, with a 33% penetration, is only second to China in terms of number of subscribers. Most of this growth has come from urban India where penetration is close to 60%, while it is less than 15% in rural markets. This does present the industry with an opportunity for growth. (Exhibit 1)

Exhibit 1: Telecom Subscriber Base: Growth Estimations

4.8 Rural Telephony: With over 50% of net additions emanating from rural markets, this has become a focus point for the industry. As ARPUs (Average Revenue per User) when compared to global levels are lowest in India, volume growth is the main revenue driver for the industry. The Universal Service Obligation (USO) Subsidy Support Scheme would enable sharing of wireless infrastructure in rural areas with around 18,000 towers slated to come up by 2010. However, increasing penetration in rural markets, may not see commensurate growth in revenue. A higher-than-expected decline in ARPU and MoU could also hit margins. 4.9Average Revenue per user (ARPU): With the rapid pace of subscriber additions, the industry is also characterised by declining ARPU (Exhibit 2). Industry wide GSM and CDMA ARPUs have declined (since 2004) at an annual rate of 12% and 20%, respectively. The decline can be attributed to customer friendly policy initiatives by the Regulators, intensifying competition, reduction in Local and NLD call charges, a rising share of pre-paid subscribers and a majority of new additions being from the low income groups.

(Exhibit 2)

4.10 Minutes of Usage (MoUs): MoUs have increased from 442 in FY07 to 508 in FY09 but are expected to fall to 469 in FY10 and stablise at that level as more low usage customers come on board, (Exhibit 3).
(Exhibit 3)

With the consistent fall in ARPUs, Telecom Operators have shifted their focus to increasing the Minutes of Usage (MoU) and stabilising the Average Revenue Per Minute (ARPM) (Exhibit 4).
(Exhibit 4)

4.11

Industry Financials (Major Players):

For the quarter ending March 2009

Income Sales PBDIT PAT PBDIT/Income PAT/Income Company Rs. Crs. G% Rs. Crs. G% Rs. Crs. G% Rs. Crs. G% Mar 08 % Mar 09 % Mar 08 % Mar 09 % Bharti Airtel 9049.7 21.5 9016.8 21.6 3569.6 24.5 2075 15.8 38.5 39.4 24.1 22.9 Reliance communication 3753.6 8.6 3172.7 -8.2 1676.4 30.9 982.8 102.6 37 44.7 14 26.2 Idea Cellular 2832.5 42.7 2832.5 42.7 763.4 13.1 304.3 9.4 34 27 14 10.7 MTNL 1287.2 -11.2 1085.2 -7.5 126 -74.1 -83.3 33.5 9.8 12 -6.5 Tata Communication 1273.2 43.1 886.9 3.7 564.3 204.1 302.4 429.7 20.9 44.3 6.4 23.7 Tata Teleservices 508.2 10.6 536.4 17.7 120.2 1.4 -39.2 25.8 23.7 -11.4 -7.7 GTL 422.9 13.6 412 10.7 75.5 26.7 26.7 -0.9 16 17.9 7.2 6.3

(Source: CMIE) Bharti Airtel, the largest Telecom Operator accounting for nearly 50% of the total industry sales, increased sales by 22% during the quarter ended March 2009. A dip in other expenses aided the faster 24% growth in PBDIT. The Company reported a robust 16% PAT growth. While, the companys PBDIT margin expanded by 90 basis points, its PAT margin contracted by 120 basis points during the quarter.
Reliance Communications total income increased by 9% despite showing a 8% drop in sales. Other Income increased by Rs.564 crs. by way of finance charges with increase in PAT by 102% to Rs.983 crs. over the same period. Idea Cellulars sales grew by a 43%. Subscriber acquisition and servicing expenditure increased by 25%, with network costs more than doubling to Rs.704 crs and Regulatory Charges increasing by almost 50 % to Rs.811 crs. This has resulted in a muted 13.1% PBDIT growth at Rs.763.4 crs. A sharp 45% increase in depreciation expenses restrained PAT growth to 9%.

Detailed Players profile is furnished in Annexure II 4.12 Key Concern Areas:

Spectrum allocation: Spectrum is a scarce resource and is critical for the rapidly increasing the subscriber base of Telecom Operators. Additional spectrum is always required by the both existing and new players for maintaining the service quality and catering to the increasing subscriber base. Delay in allocation or non availability of spectrum would result in poor quality of service and become a major constraint to expansion.

Price wars: The decrease in rates for voice calls directly affect the profitability of the Sector leading to declining ARPUs. A move by one or

more operators to increase subscriber base by reducing tariffs would result in price wars across the Sector. License fee: Indian Telecom Operators have to apportion a substantial part of their revenues to meet taxes levied by the Regulatory Authority. The Regulators are presently looking to increasing the charge on spectrum beyond 6.2 MHz. This increase is bound to adversely affect the margins of Operators. 4.13 Investments Outlay: Unitech Wireless backed by Telenor Norway has announced a Telecom Infrastructure Project with an investment Rs.10,000 crs. spread over 3 years. The Company plans to initially roll out in eight circles.
Idea Cellular has announced an infrastructure development project in Orissa, involving a cost of Rs.1,000 crs. The Company had also announced a Rs.1,000 crs. GSM Expansion Project in Tamil Nadu.

Tata Teleservices intends to go in for a Rs.1,000 crs. GSM expansion project. MTNL is adding 150 additional towers to its existing network of 600 towers in Mumbai and another 90 towers in the satellite township of Navi Mumbai by March 2010. Bharat Sanchar Nigam Ltd. (BSNL) announced a Rs.650 crs. 3G Mobile Services & Telecom project to be launched in Bangalore. The company also announced a project to launch Wimax, IPTV and 3G services in Kerala. Bharti Airtel announced a multi-state Transceiver Station Project for setting up 1,00,000 base transceiver stations across India by December 2009. This investment in infrastructure will support the Companys plan to roll out value added services such as high speed internet and mobile e-commerce in rural areas. 4.14 Outlook: With 10 million subscriber additions a month, the Telecom Sector continues to maintain its growth momentum. With the launch of 3G and Wi-max services the industry is expected to reach new levels in coming future.

The Telecom User base is expected to touch 700 million by 2013 as Operators cover the untapped rural areas. The mobile subscriber base is expected to grow at a CAGR of 18% from 2007 to 2013, reaching a penetration rate of 53% by end-2013. In India, 3G service revenues will amount to over Rs.75,000 crs by 2013, accounting for 46% of the total wireless service revenue. 3G mobile subscribers in India are expected to number over 90 million by 2013, forming 12% of the overall wireless base. 3G devices are expected to bring in revenues of Rs.53,000 crs. with the high price handsets segment contributing to 59% of annual sales revenue. New entrants will be weighed down by challenges relating to brand building; as they do not have the mindshare that industry heavyweights such as Bharti Airtel and Vodafone have served. They also face distribution, spectrum availability and other operational challenges which would make it harder for them to compete with the established operators. Nevertheless, new entrants are pressing ahead and are looking to invest about Rs.10,000 crs. in the second and third quarter of FY10. Going forward, the industry will witness consolidation and acquisition. Idea Cellular acquired Spice Telecom in July 2008 and Bharti Airtel is in talks with MTN South Africa with a view to becoming a Multi-National Telecom conglomerate. Companies in the process of shifting focus to rural areas would have to provide quality services at lower costs and offer better value added services to sustain growth.

The outlook for the year 2009-2010 is positive for the established and existing players while remaining neutral for new entrants due to challenges and risks perceived. However, investment will continue come in, even as other sectors of the economy continue to be adversely affected by the slowdown. 6. Telecom Equipment Manufacturers
India, being the world's fastest-growing telecom market, is also making steady progress in telecom equipment manufacturing. Continuous capacity additions by the existing players and network rollouts by new players have made India a telecom destination for global telecom vendors.

Network sharing has taken many forms, ranging from passive sharing of cell sites and towers to sharing of Radio Access Networks (RANs) and other active elements. Passive infrastructure sharing however, is most common due to the relative technical and commercial simplicity. There has also been a surge in demand for equipment such as batteries, towers, shelters and cables. However, the active infrastructure equipment industry has not grown at same pace. Companies such as Motorola, Nokia Siemens Networks (NSN) and Ericsson have been importing components in bulk to meet demand. Tower sharing has come under focus in recent times, which process has given rise to bilateral barter arrangements. However, this has further evolved into a system whereby independent tower companies are jointly owned by telecom operators. Tower sharing, has led to significant reduction in costs. However, synergies that were expected from tower sharing are yet to be realised with the average number of operators per tower presently at 1.3 as against the target of 1.8 (the ratio in the US is 2.5) 5.1 Outlook:
Passive infrastructure sharing will be an attractive option for operators as there is need to garner resources to face imminent 3G auctions.

Rentals and number of tenants are likely to decrease further emphasising the need for higher occupancy ratios. Tower companies will have to resort to repositioning themselves as integrated service providers in order to remain competitive. Industry is expected to see investments of about Rs.5,200 crs. in tower infrastructure through 2012. The number of towers expected to rise by 60% with 350,000 towers in place by 2012 having a tenancy ratio of 1.8-1.9 operators per tower. In the above scenario of falling income, increased competition and subdued capital expenditure, the outlook for the segment would be neutral.

Annexure I

Swan Telecom:
Swan Telecom was the first of the new licensees to divest a part of its stake to a strategic foreign telecom player. Emirates Telecommunications Corporation (Etisalat), had bought a 45% stake in Swan for US$900 million. The remaining 55% is held by Dynamix Balwas Group, a Mumbai based Real Estate and Hospitality business group. Swan has approval to offer both National and International Long Distance (NLD and ILD) services, as also to operate as an Internet Service Provider. The Company offers the complete array of Telecom Services- from mobile to fixed line, carry voice, data and internet services.

Swan has entered into strategic alliance with BSNL to utilise the laters network to roll out its own services. The tie-up includes Swan using BSNLs leased lines and its fibre optic backbone; routing NLD traffic through the state owned operators network; intra- and intercircle roaming arrangements and cooperation in planning infrastructure expansion. The company holds spectrum for 13 circles and plans to roll out usuage by July-August 2009. Unitech Wireless: Unitech Wireless has also offloaded a 60% stake to Norways Telenor for US$1.2 billion. Unitech has received spectrum to operate in 21 out of 22 Circles. The Company is setting in motion the first phase offering services in 13 Circles by mid 2009. The Company is planning to invest Rs. 15,000-20,000 crs. in the next three years. Datacom: The Company was allotted the spectrum early but could not utilise the advantage due to controversy between the promoter Videocon and Mahendra Natha Group. The Company has downsized its Orissa operations and hopes to launch the services in other Circles by end of 2009.

Loop Telecom: Loop Telecom have obtained licences for providing mobile services in 21 Circles and has received the start-up spectrum in 13 circles. The company is under debate related to Essars direct stake of 9.9%, However, the Company is in process of establishing network to roll services at an investment of US$2-2.5 billion, to be raised through various options including debt and equity. Shyam Telelink: Shyam Telelink has the licence to launch the services across the country and has successfully launched CDMA mobile services in Rajasthan. The Company will follow up with the launch of services, South India, followed by the North and the East. It is planning to invest US$1.5 billion in 2009 for network rollouts. S Tell: S Tell is a Chennai based Telecom company promoted by Skycity Foundations and Mauritius based Telecom Investments. The company has spectrum for 6 Circles.
Annexure II

Bharat Sanchar Nigam Ltd Bharat Sanchar Nigam Ltd (BSNL) is a public sector undertaking, whollyowned by the Government of India. It was formed in October 2000 through the corporatisation of DoT. BSNL provides telecom services throughout the country, except Delhi and Mumbai. The services provided by the company include Fixed Line, GSM mobile, CDMA mobile, National Long Distance, International Long Distance, Internet, MPLS-based virtual private network (VPN) services, ISDN, Leased Lines, Intelligent Network, Telex/Telegraph and Electronic Private Automatic Branch Exchange (EPABX) services.
At the end of March 2009, BSNL had a total of 29.35 million subscribers for its fixed services, representing about 78 per cent of the total fixed services subscriber base in the country. However, it is facing stiff competition from private mobile as well as fixed players, which has hampered its fixed services subscriber growth. At the end of March 2009, BSNL had 46.7 million GSM mobile subscribers across 20 circles having risen from 36.2 million in March 2008. 3G Mobile Services were commercially launched by BSNL in February

2009, in 11 cities namely Agra, Ambala, Jalandhar, Jaipur, Dehradoon, Shimla, Lucknow, Ranchi, Durgapur, Haldia and Patna. The initial subscription cost to avail the 3G services offered by the Company was Rs 300.

Mahanagar Telephone Nigam Ltd

Mahanagar Telephone Nigam Ltd (MTNL) was set up by the Government in 1986 to provide telecom services in Delhi and Mumbai. Telecom services in these two cities, the highest revenue-generating service areas in the country, were previously under the purview of the Department of Telecommunications. The government holds a 56.2% stake in the company. MTNL provides basic telephone services, post paid GSM cellular services under the Dolphin brand, pre paid GSM cellular services under the Trump brand, CDMA mobile services under the Garuda brand and Internet services. The other services provided by the company are Digital Network Service, Intelligent Network Service, Leased Line Service and Telex Service.In December 2008, MTNL announced the launch of its 3G services in the Delhi Circle and later in the Mumbai Circle with prepaid plans ranging from Rs. 250 to Rs. 2500.

Bharti Airtel Limited Bharti Airtel Limited is an integrated telecom service provider, providing all types of services namely fixed, mobile, ILD NLD, VSAT, Internet and network solutions. The company was incorporated in July 1995, is Indias largest telecom service provider with presence in all the 22 circles of the country and a market share of 24.5% of total wireless market. Airtel has an st aggregate subscriber base of more than 100 million customers as on 31 May, 2009 of which 99.5 million are for GSM services.
The company was the first one to launch lifetime validity scheme in the prepaid segment, with one-time charge of Rs. 999. The company then pioneered the lifetime validity scheme by slashing one time charges to Rs 495 and then to Rs. 199. In anticipation of increasing competition, Bharti Airtel further slashed the lifetime prepaid rates to Rs. 99 w.e.f January, 2009.

Airtel has initiated merger talks with MTN, one of the major telecom operators in South Africa.

Vodafone-Essar group Vodafone-Essar group, earlier Hutchison-Essar group, provides GSMbased mobile services in 16 circles of the Country and is the third largest player in the industry. The company went through a major transformation phase, where Vodafone Limited, a leading UK-based telecommunications services provider, acquired a controlling stake of 67% in the HutchisonEssar group for an enterprise value of US$18.8 in February 2007. The remaining stake is held by the other partner, Essar Ltd. At the end of March 2009, the Vodafone-Essar group had 68.77 million subscribers, with a market share of 17.6%. Idea Cellular Ltd Idea Cellular's antecedents date back to 1995, when the Aditya Birla Group and AT&T (through Birla AT&T - Maharashtra, Gujarat) and the Tata Group (through Tata Cellular- Andhra Pradesh) came together to set up cellular networks. The company then called Birla AT&T Communications Ltd, started offering cellular services in the Gujarat Circle in January 1997 and in the Maharashtra Circle in March 1997. In 2000, the company decided to merge with Tata Cellular and subsequently acquired RPG Cellcom, the cellular operator in Madhya Pradesh. The merged entity of Birla AT&T and Tata Cellular was renamed Birla Tata AT&T Communication Ltd in May 2001. In May 2002, the name of the company was again changed to Idea Cellular Ltd. After the group acquired the 48% holdings from the Tata group, the Tatas completely exited from the company. Aditya Birla Nuvo Ltd and its subsidiaries acquired 15% of the 48% holdings while Birla TMT Holdings Pvt. Ltd acquired the balance. With this the combined holdings of the Aditya Birla Group companies increased to 98.3%. In July 2008, Idea Cellular acquired a 40.8% stake in Spice Communications at a price of Rs.2,176 crs. This will help the company gain a foothold in the Punjab and Karnataka circles, where Spice has a combined subscriber base of around 4.5 million. The current market share of the company is 11.5% as on April 2009.

Reliance Communications Ltd Reliance Communications Limited (RCom) is an integrated pan Indian telecom operator and a part of Anil Dhirubhai Ambani Group (ADAG). It offers fixed wireless services based on CDMA technology, CDMA and GSM mobile services, Wireline, ILD, NLD, Internet, and Data services. The company became the first CDMA operator to offer International roaming facility to its subscribers. The company provides mobile services in all 23 circles across the country, where it provides CDMA based mobile services in 21 circles (expect Assam and North East) and GSM based mobile services in eight circles. The company also provides fixed services, in 21 circles across the country
RCom has the second largest subscriber base with a market share of around 19%. The company launched the GSM services in January 2009 and added a record number of subscriber in the first month of its GSM launch.

Tata Teleservices Ltd. (TTSL) TTSL provides a whole bouquet of services under the Tata Indicom brand. Its services include Basic Telephone, Internet (broadband as well as dialup) and NLD services. The Telephone services include common wireline as also fixed wireless telephones and CDMA mobile services. As of March 2009 the company had 381,610 fixed line subscribers as compared to 322,618 in March 2008. While the total mobile subscriber base stood at 28.2 million, having risen from 19.7 million as of March 2008. They have a of 7% market share at the end of March 2009.

Aircel The Aircel Group, providing GSM based mobile services, is a joint venture between Maxis Communications Berhad of Malaysia and Apollo Hospital Enterprise Ltd of India, with Maxis Communications holding a majority stake of 74%. Aircel commenced operations in 1999 and is the leading player in Tamil Nadu. Aircel bagged the pan India licences and launched its services in various circles in 2008.
The company launched operations in Kerala, Karnataka, Delhi, Uttar Pradesh (E), Uttar Pradesh (W) and the Andhra Pradesh Circles in 2008-09. Aircel also launched its operations in the Mumbai circle in April 2009. With this launch, Aircel Cellular is now present in 16 circles across the country.

The companys total mobile subscriber base stood at 18.5 million subscribers in March 2009 having risen from 10.6 million subscribers at the end of the previous year with a market share of 4.7%.

Market Share of Major Mobile operators as of April 2009 (%)

Vodafone 19% Others 5% Airtel 25%

Tata 9%

BSNL 12%

Idea 11% R Com 19%

20 Telecom Industry: India 2009

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