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Industry Analysis of Telecom Industry

The telecom industry in India has undergone significant liberalization and growth since the 1990s. It is now one of the most competitive telecom markets in the world. The industry provides important services but faces challenges like excessive competition, infrastructure gaps in rural areas, and fluctuating duties. The government regulates the industry through policies aimed at development while protecting consumers. The industry contributes significantly to India's economy and is expected to keep growing.

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608 views11 pages

Industry Analysis of Telecom Industry

The telecom industry in India has undergone significant liberalization and growth since the 1990s. It is now one of the most competitive telecom markets in the world. The industry provides important services but faces challenges like excessive competition, infrastructure gaps in rural areas, and fluctuating duties. The government regulates the industry through policies aimed at development while protecting consumers. The industry contributes significantly to India's economy and is expected to keep growing.

Uploaded by

Leetika Sharma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Industry

Analysis
Of
Telecom
Industry analysis OF
TELECOM INDUSTRY
Industry
(IN CONTEXT TO INDIA )

(in context to
India)
Industry Name :Telecom Industry
Meaning of telecom:
The science and technology of communication at a distance by transmission
 of electrical impulses, electromagnetic waves, or optical pulses, as by teleph
one, radio, television, or computer.

Historical background of the industry:


The telecom sector in India started in 1851 when the first operation
landlines were laid by the government nearby Calcutta. In 1881 telephone
services were introduced in India and telephone services were merged with
the postal system in 1883.
Early days of the telecom sector in India had 2 wholly-owned government
companies – Videsh Sanchar Nigam Limited (VNSL) for international
telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for
metropolitan areas in 1986.
Post-independence scenario witnessed around 9 System for Mobile
Communications (GSM) and Code Division Multiple Access
(CDMA).operators providing mobile services in 10 telecommunication
circles and 4 metro cities, covering more than 2000 towns in India.
 Nature of product provided by industry: service
product is provided along with material products and
related services.

 Raw material: steel tower / antenna , power supply ,


base tower station shelter , battery bank , switches , base
tower station, transceivers for signal processing and
transmission, etc.

 Market (users): In telecommunications, a user is a


person, organization, or other entity that employs the
services provided by a telecommunication system, or by
an information processing system, for transfer of
information. A user may also be the subscriber, i.e.
the customer paying for the service.
 Market segmentation: The telecom market can be split into
three segments – wireless, wire line and internet services.
Total subscriber base in the country stood at 1,163.67 million
as of May 31, 2020. The wireless market segment accounted
for 98.28% of the total subscriber base as of March 2020.
Rural subscribers comprised 44.27% of the total telephone
subscribers as of March 2020.

 Demand scenario: India is also the world’s second-largest


telecommunications market. It’s total telephone subscriber
base and telephone-density (The number of telephone
connections for every hundred individuals living within an
area) reached 1,177.97 million and 87.37%, respectively, in
FY20. Given the low tariff environment and relatively low
rural and semi urban penetration levels, demand will
continue to remain higher in the foreseeable future across all
the segments
 
 Policy of government: The regulatory and policy framework
encompassing the communications sector in India comprises a
number of statutes, rules, regulations, guidelines, etc, laid down by
the government of India. The primary statutes regulating the sector
include:

 the Indian Wireless Telegraphy Act 1933 (the Wireless Act);

 the telecoms policy amended from time to time, the latest being the
National Digital Communications Policy 2018 (the NDCP 2018),
which was approved in September 2018;

 the Broadband Policy 2004; and

 The Information Technology Act 2000 (the IT Act).


Two important policies:

The Indian Telegraph Act 1885 (the Telegraph Act); The Telegraph
Act is the primary legislation underlying the telecommunications
regulatory framework for India and prescribing various powers of the
government to operate and regulate telecoms services in the country

The Telecom Regulatory Authority of India (TRAI) Act 1997 (the


TRAI Act); TRAI has played catalytic role in the development of the
telecom, broadcasting and cable services. It has been its Endeavour to
provide an environment, which is fair and transparent, encourages
competition, promotes a level-playing field for all service providers,
protects the interest of consumers and enables technological benefits
to one and all. A number of recommendations on various telecom
issues were made by TRAI during 2017-18.TRAI's mission is to create
and nurture conditions for the growth of telecommunications in India
to enable the country to have a leading role in the emerging global
information society.
Problems of industry:

 Excessive competition
  India has very little penetration of fixed-line in its network
whereas most of the developed countries have a very high
penetration of fixed lines.
 Huge fluctuations in the duties on Telecom Equipment which
contribute to connecting the whole system from the central
server to the consumer.
 Timeframe of policy execution: Government have withdrawn a
lot of things to benefit telecom sector but by the time it gets
executed to the market, it becomes too late.
 Lack of Telecom Infrastructure in Semi-rural and Rural
areas: Service providers have to incur huge initial fixed cost to
enter semi-rural and rural areas
Competition:
The post-independence era (the late 90s – 2000s) witnessed a number
of players entering the market after the government established
various norms and regulations that are vital to run the sector.

 State-owned companies – BSNL & MTNL


 Privately owned Indian companies – Reliance Infocomm & Tata
Teleservices.
 Foreign companies like –BPL Mobile, Bharti Tele-Ventures, Idea
Cellular, Escotel Spice Communications, Aircel, MTS, Videocon, S-
Tel and many more.
From not many sellers in the market, India was flooded with a large
range of options to choose from. Before Reliance Infocomm
disrupted the market, the telecom sector in India was a monopolistic
competition. New entrants had basically low barriers, all they had to
do was to be a deep-pocketed brand and come up with an offering
loaded with offers, discounts, and affordable tariffs and everything
else would follow.
 Gross revenue of the telecom:
sector stood at Rs 185,291 crore (US$ 26.51 billion) in FY20
(April-December 2019).Over the next five years, rise in
mobile-phone penetration and decline in data costs will add
500 million new internet users in India, creating
opportunities for new businesses.

 Cost comparison :
prices offered by BSNL 4G Combo Unlimited Plans is the best
in present mobile internet market with affordable rates at
lowest or cheapest prices which are to be the most
comfortable for a common man for subscription of the 4G
services when compared BSNL Vs JIO, Airtel and Idea
Vodafone.
CONCLUSION:
 Indian telecom industry underwent a high pace of market
liberalization and growth since the 1990s and now has become
the world's most competitive and one of the fastest growing
telecom markets. Telecommunication has supported the
socioeconomic development of India and has played a
significant role to narrow down the rural-urban digital divide to
some extent. It also has helped to increase the transparency of
governance with the introduction of e-governance in India. The
government has pragmatically used modern
telecommunication facilities to deliver mass education
programmers’ for the rural folk of India.
 According to London-based telecom trade body GSMA, the
telecom sector accounted for 6.5% of India's GDP in 2015, or
about ₹9 lakh crore (US$130 billion), and supported direct
employment for 2.2 million people in the country. GSMA
estimates that the Indian telecom sector will contribute ₹14.5
lakh crore (US$200 billion) to the economy and support 3
million direct jobs and 2 million indirect jobs by 2020.

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