Background DEL: SUPPLY AND DEMAND

40
The telecom industry is an important infrastructure
35
industry. It is highly capital intensive, and the payback

TOTAL DEMAND (million)

WAITING LIST,DEL AND
periods can be very long. An efficient telecom network 30

is a fundamental prequisite to the economic 25

development of a nation. 20

15

Highest ROI for the telecom sector in the world is 10

India. Investors flock here since the mature market and 5

the slow GDP growth in the developed countries don’t 0

provide enough returns. The Indian
Telecommunications network with 203 million YEAR ENDING MARC H 31

connections is the third largest in the world and the Total demand
second largest among the emerging economies of Asia. Waiting List
This sector has emerged as one of the key sectors for Del
the economic resurgence in India.

Today, it is the fastest growing market in the world.

The teledensity has risen rapidly and the telecom sector
one of the fastest growing industries in India, due to
lower tarrifs, stiff competition (from both public &
private companies), simplification of policy
environment.
This sector is moving towards maturity in the not-so-
distant future, which will lead to further consolidation
& the more profitable players in this segment will
survive.
Operators focusing on cell phone & broadband
penetration in semi-urban and rural areas. This will
better the economic conditions of such areas by
providing faster, reliable, and a more feasible mode of
communication for businesses and pricate use.
Telecom Industry effects on Indian GDP and other
Industires
 1% of India’s GDP; likely to double in 2-3 years
 30% of India’s total service tax revenue
 Direct employment to over 400,000 people
 Enabler of software, BPO & ITeS companies
 Lifeline of the rapidly growing E-commerce
space
 Spread benefits of booming Indian economy to
tier-2 cities like Mysore, Ahmedabad, Jaipur,
Mangalore, Kochi. Rise in income realized
away from metros.
Competition in the market

The growth momentum is sustained by maintaining a The telecom industry has 3 different types of
positive supply gap. technologies available to the masses for use:

 Wireline Service
Fixed Land-line
The use of these have been going down over the
last 8 years as more and more indivudials opt
for more portable (mobile) handsets, which have
been gaining popularity as they have more
features and with advancements in technology,
are getting cheaper by the day.

But the broadband growth promises to provide

stability in growth for Land-line phones.
 Wireless Service
GSM Mobile Phones
Advantages like changeable SIM cards,
International roaming, and follwed by most of
the world (Europe, Most of Asia, Africa and the
Americas).

CDMA Phones
Increased communications security, can transfer
numbers form one phone to the other since the
info is stored in the service provider’s server
database, access to the burgeoning American
market.

Major Players

3 types of players in telecom services:

 State owned BSNL & MTNL

 Private Indian companies (Reliance Infocomm,

TataTeleservices, Bharti Airtel)

 Foreign Invested companies (Vodafone, Idea

Cellular, Spice Mobile, BPL Mobile)