Contents:-

1 Introduction

2 Telecom Sector in India

3 History of Indian Telecommunication

4 Telecom Service Available in India

5 Restraints on Telecom Sector

6 Conclusion

7 References
INTRODUCTION

The world is waiting at our doorsteps, waiting for

us to open the gates to an economy bubbling with opportunities. The
India growth story has already got the world to sit up and take a note
of the changing economic scenario. The Indian government is doing
everything that is possible to ensure that this story remains intact.
Factors, like the liberalization in the government stance and the daring
entrepreneurs of the Indian soils, have helped the sectors achieve the
highs like never before. And currently, the flavour of the month seems
to be the telecom industry.

TELECOM SECTOR IN INDIA

The telecom industry is one of the fastest growing

industries in India. India has nearly 200 million telephone lines
making it the third largest network in the world after China and USA,
with a growth rate of 45%. Indian telecom industry has the highest
growth rate in the world. A record 5.9 Million new mobile phone
subscribers were drawn by the Telecom sector in India in the month of
August 2006, according to the COAI (Cellular Operators Association
of India).

India, which is seeing over 8 million wireless

subscribers being added every month (8.62 million in May 2008), is
the fastest growing telephone market in the world. No wonder the
whole world has set its eyes on India, a glimpse of which can seen
from the recent acquisition of Hutch by Vodafone and consolidation
phase which has just begun. The government has reiterated the target
of 500 million telecom subscribers and 20 million broadband
connections by 2010. Undoubtedly, the Indian telecom industry is at an
inflexion point and everyone wants to have a slice of this lucrative
market, given the under-penetrated market and untapped potential.

From a monopolistic market in 1995 to more than

10 operators now… India has come a long way

The August of 1995 saw the launch of the first

mobile service in India, ‘Modi Telstra’ in Calcutta. However, the call
rate structure; with an outgoing call rate of Rs.16 a minute, incoming
call rate of Rs.8 a minute and cell phones costing around Rs.15,000
were the prime reasons why the cellular communication did not get the
desired popularity. The New Telecom Policy in 1999 introduced
several consumer-friendly initiatives. Only after the entry of private
operators like Bharti Airtel, Hutch, Reliance, Tata, BPL, Idea, etc.,
who created a competitive market which further reduced operational
costs, did the upward trend in the number of mobile subscribers
started. The tariffs have come down substantially with Indian Mobile
rates being the lowest in the world. The number of wireless subscribers
rose from 16 million in 2003 to 317 million at the end of May 2008.
With this, India has become one of the fastest growing mobile markets
in the world. Already, The Indian market leader, Bharti Airtel has
already crossed the 50 million customer mark to become one of the
world’s top 10 operators and has become the fastest private telecom
company in the world to achieve this milestone.
HISTORY OF INDIAN TELECOMMUNICATION
History of Indian Telecommunications started in
1851 when the first operational land lines were laid by the government
near Calcutta (seat of British power). Telephone services were
introduced in India in 1881. In 1883 telephone services were merged
with the postal system. Indian Radio Telegraph Company (IRT) was
formed in 1923. After independence in 1947, all the foreign
telecommunication companies were nationalized to form the Posts,
Telephone and Telegraph (PTT), a monopoly run by the government's
Ministry of Communications. Telecom sector was considered as a
strategic service and the government considered it best to bring under
state's control.

The first wind of reforms in telecommunications

sector began to flow in 1980s when the private sector was allowed in
telecommunications equipment manufacturing. In 1985, Department of
Telecommunications (DOT) was established. It was an exclusive
provider of domestic and long-distance service that would be its own
regulator (separate from the postal system). In 1986, two wholly
government-owned companies were created: the Videsh Sanchar
Nigam Limited (VSNL) for international telecommunications and
Mahanagar Telephone Nigam Limited (MTNL) for service in
metropolitan areas.

In 1990s, telecommunications sector benefited

from the general opening up of the economy. Also, examples of
telecom revolution in many other countries, which resulted in better
quality of service and lower tariffs, led Indian policy makers to initiate
a change process finally resulting in opening up of telecom services
sector for the private sector. National Telecom Policy (NTP) 1994 was
the first attempt to give a comprehensive roadmap for the Indian
telecommunications sector. In 1997, Telecom Regulatory Authority of
India (TRAI) was created. TRAI was formed to act as a regulator to
facilitate the growth of the telecom sector. New National Telecom
Policy was adopted in 1999 and cellular services were also launched in
the same year.

Indian Telecom Industry is one of the fastest

growing telecom markets in the world with the telecom subscriber
base standing at ~ 300.48 million as of 31st March 2008.
 TELECOM SERVICE AVAILABLE IN INDIA

The telecom services available in India include-

1. Basic Fixed Line Services

2. Mobile Services (GSM & CDMA)
3. Internet Services
4. International Long Distance Services
5. National Long Distance Service
6. Pager Services

The telecom subscriber base as of 31st March

2008 was 300.48 million compared to 6.4 million and 3.6 million at the
end of the March of 2002 and 2001 respectively.

Telecom subscriber as on 31st march 2008-

1. Wireline subs 39.42 mn

2. Wireless subs 261.07 mn

- GSM 192.7mn
- CDMA 68.37mn
 GSM vs. CDMA

GSM and CDMA are the two main competing network technologies
deployed by cellular service provider’s world over.

GSM (Global System for Mobile

Communications) originated in Europe in 1990. The GSM Association
is an international organization founded in 1987, dedicated to
developing, providing and overseeing the worldwide wireless standard
of GSM

While CDMA (Code Division Multiple Access)

is a proprietary standard designed by Qualcomm Inc in United States
and has been the dominant network standard for North America and
parts of Asia. It became an international standard in 1995.

However now, GSM networks have penetrated

the United States and the CDMA networks have spread in other parts
of the world. People of both the camps claim that their architecture is
superior to the other.

RESTRAINTS ON TELECOM SECTOR

 Sluggish pace of reform process

 Lack of infrastructure in semi-rural and rural areas, which makes

it difficult to make inroads into this market segment

 Limited Spectrum availability

CONCLUSION

India is huge market and none of service

providers can dare to ignore its potential. That’s why Indian mobile
service provider industry is growing leap and bounce for the last
decade. This journey of 1 million to 50 million will keep it pace until
each citizen in India will have his own mobile. Industry has many
phases in its growth. Now mobile doesn’t mean a only a medium of
communication. Services providers are now willing to provide varies
facilities like entertainment (music, video etc.) and even banking also.
We can say that business is transforming in e-commerce to m-
commerce (mobile-commerce). In short we can say drastic change has
came in the industry along with expanding its base in subscribers, they
are keeping eye not only to offer new facilities but also to be the first
to provide it.