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CHAPTER- 1

Introduction to the Industry

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 INTRODUCTION TO THE INDUSTREY

THE TELECOM NETWORK IN INDIA IS THE FIFTH LARGEST NETWORK IN THE

WORLD MEETING UP WITH GLOBAL STANDARDS. PRESENTLY, THE INDIAN
TELECOM INDUSTRY IS CURRENTLY SLATEDTO AN ESTIMATED CONTRIBUTION
OF NEARLY 1% TO INDIA’S GDP.

The Indian Telecommunications network is the fifth largest in the world and the second
largest among the emerging economies of Asia. Today, it is the fastest growing market in
the world and represents unique Opportunities for U.S. companies in the stagnant global
scenario.

The country’s GSM telecom operators such as Bharti Airtel, Vodafone Essar and BSNL,
have together added 9.5 million subscribers in July, taking their total subscriber base to
325.7 million. According to the date released by the GSM representative body Cellular
Operators’ Association of India (COAI), the GSM operators have together added 9.5 million
users in July 2009, against 8.9 million users in June 2009.

Wireless technologies currently in use are Global System for Mobile Communications
(GSM) and Code Division Multiple Access (CDMA). There are primarily 9 GSM and 5CDMA
operators providing mobile services in 19 telecom circles and 4 metro cities, covering 2000
towns across the country. Wireless subscriber base increased from 427.28 million to 441.66
million, registering a growth of 3.36 percent, while wireless teledensity stood at 37.87.

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 Evolution of the industry-Important Milestones
Year Evolution of the industry-Important Milestones

1851 First operational land lines were laid by the government near
Calcutta (seat of British power)
1881 Telephone service introduced in India
1883 Merger with the postal system
1923 Formation of Indian Radio Telegraph Company (IRT)
1932 Merger of ETC and IRT into the Indian Radio and Cable
Communication Company (IRCC)

1985 Department of Telecommunications (DOT) established, an

exclusive provider of domestic and long-distance service that
would be its own regulator (separate from the postal system)

1986 Conversion of DOT into two wholly government-owned

companies: the Videsh Sanchar Nigam Limited (VSNL) for
international telecommunications. And Mahanagar Telephone
Nigam Limited (MTNL) for service in metropolitan areas.
1997 Telecom Regulatory Authority of India created.
1999 Cellular Services are launched in India. New National Telecom
Policy is adopted.

2000 DoT becomes a corporation, BSNL

CELLULAR TELEPHONY IN INDIA

1981 The Dot separated from the Post and Telegraph Department

1984 Manufacturing of subscriber terminal equipment opened to private sector.

1985 Telecom was constituted into a separate department with a separate board.

1986 VSNL and MTNL, two operational divisions of Dot, corporatized

1989 Telecom Commission formed.

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1991 Telecom equipment manufacturing opened to private sector. Major
international players like Alcatel, AT&T, Ericsson, Fujitsu, and Siemens
entered equipment manufacturing market.

1992 Telecommunication sector in India liberalized to bridge the gap through

government spending & to provide additional resources for the nation’s
telecom target. Private sector allowed participating

1992 First disinvestment of MTNL& BSNL

1994 September Broad guidelines for private operator entry into basic services
announced.

1994 November Licenses for cellular mobiles for four metros issued.

1995 August Kolkata became the first metro to have a cellular network telecom
circle), under a fixed license fee regime for 10 years.

1995 August Basic service tender bid opened; the bids caused lot of controversy. A
majority of bids were considered low.

1996 The Telecom Regulatory Authority of India (TRAI) formed by ordinance.

1997 March the TRAI Act passed in Parliament.

1997 Telecom Regulatory Authority of India is set up

1998 June Several VASs available through private operators. The first private basic
service becomes operational.

1999 March Announcement of National Telecom Policy1999.

1999 Oct DTS separated from Dot

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2000 January Amendment to the TRAI Act.
2000 August Announcement of Domestic Long Distance Competition Policy.

2001 January TRAI recommends that basic service providers be allowed to provide
limited mobility services within a local area, called Short Distance Charging
Area.

2001 March Dot issues guidelines on allocation of spectrum for limited mobility
services.

2001 April Government refers the limited mobility issue to a Group of Ministers on
telecom and IT Convergence, after COAI approaches the Prime Minister to
seek his intervention in the matter.

2002 Feb Disinvestment of government's 25 per cent stake in VSNL to the Tata
Group

2002 December Supreme Court asks TDSAT to take a fresh look at its decision,
while keeping in mind the issue of the absence of a level playing field raised
by cellular operators. Refuses to stay the rollout of limited mobility services.

2002 December Reliance Infocomm launches its limited mobility services.

2003 March Talks between basic and cellular service providers to resolve their
differences over the limited mobility issue, initiated by the government, fail.

2003 October Group of Ministers on Telecom decides to restrict limited mobility

services to an SDCA as per the TDSAT ruling.

2003 October GoM on Telecom gives its nod to TRAI’s recommendation of a single
license for basic and cellular services.

2003 November Unified licenses issued to Reliance Infocomm, Tata Teleservices.

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2004 May TRAI releases consultation paper on unified licensing for basic and
cellular services.

2004 August TRAI issues draft recommendations on Unified Licensing Regime.

2005 January TRAI issues recommendations on Unified Licensing

Regime.

2006 In May 3G spectrum allocation and pricing related issue

Discusses and all stakeholder are invited.

2007 In March TRAI issued instruction for unified access service

Provider to carry out 100% verification.

2008 On 24th November recommendations on “Allocation and

Pricing of spectrum for 3G and BWA services.”

2009 “Telecommunication mobile number portability regulation.”

Government has also decided to auction carrier for 3G

2010 The Telecom Regulatory Authority of India (TRAI) has recommended that
spectrum for 3G services be auctioned, ended speculation it may be given
away free. The base price for regional licenses is Rs.79 crore ($17 million)
maximum and lower for regions expecting less business.

Five mobile service wireless providers in India are expected to receive preferential
treatment in granting of licenses. 3G licenses will be granted in the 450MHz, 800MHz
and 2.1GHz bands

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INDUSTRIAL ANALYSIS OF TELECOMMUNICATIONS

India Telecommunications policy

National Policy

In 1994 the Government of India issued its National Telecommunications Policy. The policy
was issued in recognition of the "urgent need" to provide universal access to basic
telecommunications services by 1997 and offers guidelines for entry of the private sector
into basic telecommunications services. To facilitate private-sector participation, licensing
procedures were established in the Department of Telecommunications in India, and equity
participation for companies registered in India (with 51 or more percent Indian ownership)
was anticipated. Private-sector licenses, however, were to be granted only for local (versus

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long-distance) telecommunications networks. An autonomous body, the
Telecommunications Authority of India, was established to regulate private-sector activity.

Telephone system in India

India's telephone system, like many other aspects of telecommunications, is in the

government sector, under the control of the Ministry of Information and Broadcasting. The
modernization of the telephone system in India has been underway since 1986 when
Mahanagar Telephone Nigam, a government corporation, was established to operate
systems in Bombay and New Delhi, and Videsh Sanchar Nigam, also government owned,
was set up as the overseas carrier. Progress was slow, however; the rest of the nation's
service continued as a civil-service-run operation under the Department of
Telecommunications until 1994 when basic telephone services were opened to private-
sector competition.

The number of telephone connections in India raised from 800,000 in FY 1968 to 8 million
in FY 1994. The system remains substandard by international standards, however, and
there is a waiting list for connections of 2.8 million people. Sometimes several years elapse
between application and installation of a telephone line. Close to 1 million new connections
a year are being established in the mid-1990s. Plans for increasing the capacity of the
system to handle more directly dialed calls were being implemented in the early 1990s, and
20 million lines should be in operation by FY 2000. This number is very low for a population
that by then will probably exceed 1 billion. Telephone line density was less than 0.7 per 100
persons in 1994, one of the lowest densities among the major nations of Asia.

There also are submarine telecommunications cables linking India with Malaysia and the
United Arab Emirates. Although the government is a major manufacturer of telephone
equipment, the private sector--especially foreign ventures--is becoming increasingly
involved in manufacturing in the mid-1990s and paging, cellular phone service, and
electronic mail are being introduced.

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Telecom Industry 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.

- Much of the growth in Asia Pacific Wireless Telecommunication Market is spurred by

the growth in demand in countries like India and China.
- India‘s mobile phone subscriber base is growing at a rate of 82.2%.
- China is the biggest market in Asia Pacific with a subscriber base of 48% of the
total subscribers in Asia Pacific. Compared to that India’s share in Asia Pacific Mobile.
Phone market is 6.4%. Considering the fact that India and China have almost
comparable populations, India’s low mobile penetration offers huge scope
For growth.

Cellular services

Cellular Service Overview

1. There are five private service operators in each area, and an incumbent state
operator. Almost 80% of the cellular subscriber base belongs to the pre-paid
segment.
2. The Dot has allowed cellular companies to buy rivals within the same operating
circle provided their combined market share did not exceed
3. 7 per cent. Previously, they were only allowed to buy companies outside their
circle.

Growth Drivers

Opening up of international and domestic long distance telephony services are

growth drivers in the industry. Cellular operators now get substantial revenue
from these services, and compensate them for reduction in tariffs on air time,
which along with rental was the main source of revenue. The reduction in tariffs

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 for airtime, national long distance, international long distance, and handset prices
has driven demand.

Telecom Services
 Basic telephone services
 Cellular Phones
 Cable T.V. services
 Calling card services
 Call collect services
 Cordless telephones
 Electronic push button telephones
 E-mailing & value-added services
 EPABX
 Facsimile machines
 FM-RDS Pagers
 Internet
 Leased lines
 One-number services
 Radio Paging services
 Toll free services
 Transceivers/Two-way radios
 Videotext services
 Video conferencing
 Voicemail
 VSATs - TDMA/DAMA and Bandwidth on Demand applications

Key players in the Telecom Market in India

There are three types of players in telecom services:
• -State owned companies (BSNL and MTNL)

• -Private Indian owned companies (Reliance Infocomm, Tata Teleservices,)

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• -Foreign invested companies (Vodafone, Bharti Tele-Ventures,
Escotel, Idea Cellular, BPL Mobile, Spice Communications.
Cellular Service provider:
1. BSNL
2. Airtel
3. Vodafone
4. Idea
5. Reliance
6. Tata indicom
7. Rainbow

Subscribers:
Wireless subscribers crosses 200 million mark, “Tele density reaches 21.20%”

The total number of telephone subscribers has reached 241.02 million at the end of August
2010 as compared to 232.87 million in July 2010. The overall teledensity has increased to
21.20% in August 2010 as compared to 20.52% in July 2010.
In the wireless segment, 8.31 million subscribers have been added in August 2010 while
8.06 million subscribers were added in July 2010. The total wireless subscribers (GSM,
CDMA & WLL (F)) base reaches 201.29 million at the end of August 2010.

The wire line segment subscriber base stood at 39.73 million with a decrease of 0.16 million
at the end of August 2010.

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Market Share of the Telecom Company in India

RCOM

Reliance is a $16 billion integrated oil exploration to refinery to power and textiles
conglomerate (Source: http://www.ril.com/newsitem2.html). It is also an integrated telecom

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service provider with licenses for mobile, fixed, domestic long distance and international
services. Reliance Infocomm offers a complete range of telecom services, covering mobile
and fixed line telephony including broadband, national and international long distance
services, data services and a wide range of value added services and applications.
Reliance India Mobile, the first of Infocomm's initiatives was launched on December 28,
2002. This marked the beginning of Reliance's vision of ushering in a digital revolution in
India by becoming a major catalyst in improving quality of life and changing the face of
India. Reliance Infocomm plans to extend its efforts beyond the traditional value chain to
develop and deploy telecom solutions for India's farmers, businesses, hospitals,
government and public sector organizations.
Until recently, Reliance was permitted to provide only “limited mobility” services through its
basic services license. However, it has now acquired a unified access license for 18 circles
that permits it to provide the full range of mobile services. It has rolled out its CDMA mobile
network and enrolled more than 6 million subscribers in one year to become the country’s
largest mobile operator. It now wants to increase its market share and has recently
launched pre-paid services. Having captured the voice market, it intends to attack the
broadband market.

BSNL

On October 1, 2000 the Department of Telecom Operations, Government of India became

a corporation and was renamed Bharat Sanchar Nigam Limited (BSNL).BSNL is now
India’s leading Telecommunications Company and the largest public sector undertaking. It
has a network of over 45 million lines covering 5000 towns with over 35 million telephone
connections.
The state-controlled BSNL operates basic, cellular (GSM and CDMA) mobile, Internet and
long distance services throughout India (except Delhi and Mumbai). BSNL will be
expanding the network in line with the Tenth Five-Year Plan (1992-97). The aim is to
provide a telephone density of 9.9 per hundred by March 2007. BSNL, which became the

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third operator of GSM mobile services in most circles, is now planning to overtake Bharti to
become the largest GSM operator in the country. BSNL is also the largest operator in the
Internet market, with a share of 21 per cent of the entire subscriber base.

BHARTI Airtel

Established in 1985, Bharti has been a pioneering force in the telecom sector with many
firsts and innovations to its credit, ranging from being the first mobile service in Delhi, first
private basic telephone service provider in the country, first Indian company to provide
comprehensive telecom services outside India in Seychelles & first private sector service
provider to launch National Long Distance Services in India. Bharti Tele-Ventures Limited
was incorporated on July 7, 1995 for promoting investments in telecommunications
services. Its subsidiaries operate telecom services across India. Bharti’s operations are
broadly handled by two companies: the Mobility group, which handles the mobile services
in 16 circles out of a total 23 circles across the country; and the Infotel group, which
handles the NLD, ILD, fixed line, broadband, data, and satellite-based services. Together
they have so far deployed around 23,000 km of optical fiber cables across the country,
coupled with approximately 1,500 nodes, and presence in around 200 locations. Bharti
Tele-Ventures' strategic objective is “to capitalize on the growth opportunities’ the company
believes are available in the Indian telecommunications market and consolidate its position
to be the leading integrated telecommunications services provider in key markets in India,
with a focus on providing mobile services”.

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MTNL

MTNL was set up on 1st April 1986 by the Government of India to upgrade the quality of
telecom services, expand the telecom network, and introduce new services and to raise
revenue for telecom development needs of India’s key metros – Delhi, the political capital,
and Mumbai, the business capital. In the past 17 years, the company has taken rapid
strides to emerge as India’s leading and one of Asia’s largest telecom operating companies.

TATA TELESERVICES

Tata Teleservices is a part of the $12 billion Tata Group, which has 93 companies, over
200,000 employees and more than 2.3 million shareholders. Tata Teleservices provides
basic (fixed line services), using CDMA technology in six circles: Maharashtra (including
Mumbai), New Delhi, Andhra Pradesh, Tamil Nadu, Gujarat, and Karnataka. It has over
800,000 subscribers. It has now migrated to unified access licenses, by paying a Rs. 5.45
billion ($120 million) fee, which enables it to provide fully mobile services as well.
The company is also expanding its footprint, and has paid Rs. 4.17 billion ($90 million) to
Dot for 11 new licenses under the IUC (interconnect usage charges) regime. The new
licenses, coupled with the six circles in which it already operates, virtually gives the CDMA
mobile operator a national footprint that is almost on par with BSNL and Reliance
Infocomm.

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VSNL
On April 1, 1986, the Videsh Sanchar Nigam Limited (VSNL) - a wholly Government owned
corporation - was born as successor to OCS. The company operates a network of earth
stations, switches, submarine cable systems, and value added service nodes to provide a
range of basic and value added services and has a dedicated work force
of about 2000 employees. VSNL's main gateway centers are located at Mumbai, New
Delhi, Kolkata and Chennai. The international telecommunication circuits are derived via
Intelsat and Inmost satellites and wide band submarine cable systems e.g. FLAG, SEA-ME-
WE-2 and SEA-ME-WE-3. The company's ADRs are listed on the New York Stock
Exchange and its shares are listed on major Stock Exchanges in India. The Indian
Government owns approximately 26 per cent equity, M/s Pantone Finevest Limited as
investing vehicle of Tata Group owns 45 per cent equity and the overseas holding (inclusive
of FIIs, ADRs, and Foreign Banks) is approximately 13 per cent and the rest is owned by
Indian Institutions and the public.

VODAFONE

Hutch, country’s fourth-largest mobile service provider will be renamed Vodafone on Friday
20th Sep 2007. Vodafone is spending somewhere in the region of Rs 250 crore on this high-
profile transition. Vodafone is a British mobile network operator with its headquarters in
Newbury, Berkshire, England, UK.

It is the largest mobile telecommunications network company in the world by turnover and
has a market value of about £75 billion (August 2008). Vodafone currently has operations in
25 countries and partner networks in a further 42 countries. The name Vodafone comes
from Voice data phone, chosen by the company to "reflect the provision of voice and data
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services over mobile phones”. As of 2009 Vodafone had an estimated 303 million
customers in 25 markets across 5 continents.]On this measure, it is the second largest
mobile telecom group in the world behind China Mobile.

RAINBOW

Sistema Shyam TeleServices Limited is a joint venture company between Sistema (LSE:
SSA) of Russia and Shyam Group of India. Sistema (LSE: SSA) has a controlling 73.71%
stake in the venture. Sistema Shyam TeleServices Limited has licenses and

Shyam Telecom enables reliable mobile communication for GSM, CDMA, iDEN®, UMTS,
TETRA™, and Public Safety. We design and manufacture innovative coverage solutions for
mobile operators, real-estate developers, neutral-host providers, businesses, and
residences. Our experiences from operating CDMA and GSM mobile networks have
allowed us to design solutions which seamlessly integrate with macro-networks of the
mobile operators. We are at the fore-front of in-building wireless, shaping the realm of
infinite possibilities.

Today, Shyam Telecom focuses on providing wireless coverage solutions for various
entrenched and evolving technologies globally. The affordability and reliability of 2nd
Generation wireless technologies has caused a Paradigm Shift in the perception of mobile
technologies. This Paradigm Shift has given new meaning to “mobility” and given birth to
concepts of “seamless mobility.” At Shyam Telecom, we provide infrastructure that enables
reliable and affordable wireless communication.

Recognized by the Government of India, the Department of Science & Technology awarded
Shyam Telecom the 1997 award of excellence in Research & Development. Today,
leveraging our experience in Cable TV, Radio, and Mobile Communications, we continue to
develop new and innovative solutions for our customers; solutions that assist our customers
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in realizing seamless mobility.

Catering to the global markets, Shyam Telecom is present in most countries either through
its subsidiaries or through its business partners.

1. Fixed phones

Get connected with rainbow and communicate with your family and friends. State-of-
the-art technology gives you crystal clear voice quality. Add to this customized tariff
plans to meet your specific requirements and you have better value for money.
Internet-ready telephone connections let you easily exploring the world.

Rainbow provides 24x7 customer care services for every user. Our customer care is
geared up to meet your requirements. We are just a call away from you.

2 Landline phones
Graham Bell created it, scientists evolved it and people have used it for over a
century the wire line telephone is one of the simplest devices you have in your
house. You could still use an antique phone from the 1920's, even though the
technology is continuously being improvised.

IDEA

IDEA Cellular is a publicly listed company, having listed on the Bombay Stock Exchange
(BSE) and the National Stock Exchange (NSE) in March 2007.IDEA Cellular is a leading
GSM mobile service operator with pan India licenses. With a customer base of over 47
million in 17 service areas, operations are soon expected to start in Kolkata & West Bengal,
North East & Assam, and J&K A frontrunner in introducing revolutionary tariff plans, IDEA
Cellular has the distinction of offering the most customer friendly and competitive Pre Paid

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offerings, for the first time in India, in an increasingly segmented market. From basic voice
& Short Message Service (SMS) services to high-end value added services such as Mobile
TV, Games etc - IDEA is seen as an innovative, customer focused brand. IDEA welcomes
all businesses and individuals interested in partnering to enhance and strengthen the IDEA
products & services portfolio. On mobile Asia Pacific Ltd, Kodiak Ltd, Bharti Teleport, Atos
Origin etc.

INDIA JAN 2010 TELECOM OPERATORS

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 CHAPTER 2

Introduction to the Organization

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 “RELIANCE COMMUNICATIONS”

INTRODUCTION

A DREAM COME TRUE

Thursday, August 09, 2007
Anil Ambani: Telecom person of the year 2007

The Late Dhirubhai Ambani dreamt of a digital India — an India where the common man

would have access to affordable means of information and communication. Dhirubhai, who

single-handedly built India’s largest private sector company virtually from scratch, had

stated as early as 1999: “Make the tools of information and communication available to

people at an affordable cost. They will overcome the handicaps of illiteracy and lack of

mobility.”

It was with this belief in mind that Reliance Communications (formerly Reliance Infocomm)

started laying 60,000 route kilometers of a pan-India fiber optic backbone. This backbone

was commissioned on 28 December 2002, the auspicious occasion of Dhirubhai’s 70th

birthday, though sadly after his unexpected demise on 6 July 2002.

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Reliance Communications has a reliable, high-capacity, integrated (both wireless and wire

line) and convergent (voice, data and video) digital network. It is capable of delivering a

range of services spanning the entire infocomm (information and communication) value

chain, including infrastructure and services — for enterprises as well as individuals,

applications, and consulting.

Today, Reliance Communications is revolutionizing the way India communicates and

networks, truly bringing about a new way of life.

INDIA ’S LEADING INTEGRATED TELECOM COMPANY

Reliance Communications is the flagship company of the Anil Dhirubhai Ambani Group

(ADAG) of companies. Listed on the National Stock Exchange and the Bombay Stock

Exchange, it is India’s leading integrated telecommunication company with over 80 million

customers.

Our business encompasses a complete range of telecom services covering mobile and

fixed line telephony. It includes broadband, national and international long distance services

and data services along with an exhaustive range of value-added services and applications.

Our constant Endeavour is to achieve customer delight by enhancing the productivity of the

enterprises and individuals we serve.

Reliance Mobile (formerly Reliance India Mobile), launched on 28 December 2002,

coinciding with the joyous occasion of the late Dhirubhai Ambani’s 70th birthday, was

among the initial initiatives of Reliance Communications. It marked the auspicious

beginning of Dhirubhai’s dream of ushering in a digital revolution in India. Today, we can

proudly claim that we were instrumental in harnessing the true power of information and

communication, by bestowing it in the hands of the common man at affordable rates.

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We Endeavour to further extend our efforts beyond the traditional value chain by developing

and deploying complete telecom solutions for the entire spectrum of society.

LOOKING BACK, LOOKING FORWARD

Reliance – Anil Dhirubhai Ambani Group, an offshoot of the Reliance Group founded by

Shri Dhirubhai H Ambani (1932-2002), ranks among India’s top three private sector

business houses in terms of net worth. The group has business interests that range from

telecommunications (Reliance Communications Limited) to financial services (Reliance

Capital Ltd) and the generation and distribution of power (Reliance Infrastructure Limited).

Reliance – ADA Group’s flagship company, Reliance Communications, is India's largest

private sector information and Communications Company, with over 80 million subscribers.

It has established a pan-India, high-capacity, integrated (wireless and wire line), convergent

(voice, data and video) digital network, to offer services spanning the entire infocomm value

chain.

Other major group companies — Reliance Capital and Reliance Infrastructure — are widely

acknowledged as the market leaders in their respective areas of operation.

ABOUT SH. DHIRUBHAI AMBANI

Few men in history have made as dramatic a contribution to their country’s economic

fortunes as did the founder of Reliance, Sh. Dhirubhai H Ambani. Fewer still have left

behind a legacy that is more enduring and timeless.

As with all great pioneers, there is more than one unique way of describing the true genius

of Dhirubhai: The corporate visionary, the unmatched strategist, the proud patriot, the

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leader of men, the architect of India’s capital markets, and the champion of shareholder

interest.

But the role Dhirubhai cherished most was perhaps that of India’s greatest wealth creator.

In one lifetime, he built, starting from the proverbial scratch, India’s largest private sector

enterprise.

When Dhirubhai embarked on his first business venture, he had a seed capital of barely

US$ 300 (around Rs 14,000). Over the next three and a half decades, he converted this

fledgling enterprise into an Rs 60,000 crore colossus—an achievement which earned

Reliance a place on the global Fortune 500 list, the first ever Indian private company to do

so.

Dhirubhai is widely regarded as the father of India’s capital markets. In 1977, when

Reliance Textile Industries Limited first went public, the Indian stock market was a place

patronized by a small club of elite investors which dabbled in a handful of stocks.

Undaunted, Dhirubhai managed to convince a large number of first-time retail investors to

participate in the unfolding Reliance story and put their hard-earned money in the Reliance

Textile IPO, promising them, in exchange for their trust, substantial return on their

investments. It was to be the start of one of great stories of mutual respect and reciprocal

gain in the Indian markets.

Under Dhirubhai’s extraordinary vision and leadership, Reliance scripted one of the

greatest growth stories in corporate history anywhere in the world, and went on to become

India’s largest private sector enterprise.

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Through out this amazing journey, Dhirubhai always kept the interests of the ordinary

shareholder uppermost in mind, in the process making millionaires out of many of the initial

investors in the Reliance stock, and creating one of the world’s largest shareholder families.

Achiever's Pride

• Undertook financial restructuring of Reliance communications

• To spend Rs 16,000 crore to expand and strengthen network coverage
• After expansion, Reliance Communications will have the single largest
wireless network in the world Launched the lowest-cost classic brand handset
at Rs 777
• Subscriber base grew to over 28 mn during last fiscal, registering 60% growth
• Total Revenue shot up to Rs 14,468 crore, an increase of 34%
• Net Profit rises to Rs 3,163 crore, an increase of over 600%
• Revenues of the wireless business increased by 46% to Rs 10,728 crore
• Broadband achieved revenue growth of 123% to Rs 1,144 crore
• Market capitalization crossed Rs 100,000 crore
• Will add 23,000 more towers
• Telecom services will be available in over 23,000 towns and 600,000 villages
• Next generation DTH network will be launched before end of the year

Reliance Communications' wireless subscriber base grew to over 28 mn last fiscal,

registering a 60% growth. This makes it one of the top two wireless operators in India.
"Economic growth in the future will be indexed to connectivity of millions of enterprise and
individual customers. Over the next few years, we will have over 100 million customers,
making us one of the top 5 telecom players in the world. In four years, we put up a total of
14,000 towers across the country. This year alone we will add 23,000 more towers. Our
wireless network is currently available in 10,000 towns. By the end of this year, it will be
available in over 23,000 towns and 600,000 villages," Anil Ambani said at the first annual
general meeting of Reliance Communications since the re-organization of the Reliance
Group in June 2005.
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"In four years of operations, we invested around Rs 32,000 crore. This year alone we will
invest over Rs 20,000 crore. At the end of this year, we will have covered over 90% of our
population. If Version 1.0 of the Indian telecom story was all about affordability, Version 2.0
will be about reach.

Our Network expansion will give us the power to drive the market and stay ahead of the
curve," Ambani adds.

According to Ambani, the financial restructuring of Reliance Communications is the biggest

turnaround story in the history of corporate India. The inherited ownership structure of
Reliance Communications was complex. The reorganization has yielded a simple, fair, and
transparent ownership structure, and given Reliance Communications 100% ownership of
all operational and associate companies.

Reliance Communications is now among the three most valuable private sector companies
in India, and the five most valuable telecom companies in Asia. In the current
Fiscal, Reliance Communications will spend Rs 16,000 crore to further expand and
strengthen its network coverage across India and the rest of the world.

In addition to organic growth, Reliance Communications will leverage the advantages

derived from this impressive financial platform to explore and pursue any significant

Opportunities available in the telecommunications sector. "We are currently

evaluating a number of inorganic opportunities in select international markets to further
expand our footprint," Ambani said.

Reliance Communication’s One India, One Tariff plan allowed millions to connect across
India at just one rupee a minute. The company was the first one to break the Rs 1,000
entry-barrier with the launch of the lowest-cost classic brand handset at Rs 777.

As per its expansion plan, Reliance Communications will have the single largest wireless
network in the world, covering over 900 mn Indians or more than 15% of the global
population. It will cover 23,000 towns or every single Indian habitation with a population of
over 1,000. Reliance Communications will cover almost 100% of all rail routes, providing
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seamless voice, video, radio, and Internet connectivity to 14 mn commuters every day. It
will also cover almost 100% of all national highways, and 84% of all state highways, giving
millions of users the power to talk, text, surf, play, chat or simply stay in touch across nearly
the entire length of India's 2,00,000-km-long road network.

Having achieved tremendous growth, the main challenge for Reliance Communications is
to improve quality of service and ARPU. Its enterprise business is also not in a position to
compete with the global majors. Stock market valuations may boost the fortunes of an
entrepreneur, but Ambani needs to address the issues faced by the growing mobile
customer base, especially in India, where bureaucracy takes pride in checking the
businessman.

Overview

The Late Dhirubhai Ambani dreamt of a digital India — an India where the common man
would have access to affordable means of information and communication. Dhirubhai, who
single-handedly built India’s largest private sector company virtually from scratch, had
stated as early as 1999: “Make the tools of information and communication available to
people at an affordable cost. They will overcome the handicaps of illiteracy and lack of
mobility.”

It was with this belief in mind that Reliance Communications (formerly Reliance Infocomm)
started laying 60,000 route kilometers of a pan-India fiber optic backbone. This backbone
was commissioned on 28 December 2002, the auspicious occasion of Dhirubhai’s 70th
birthday, though sadly after his unexpected demise on 6 July 2002.

Reliance Communications has a reliable, high-capacity, integrated (both wireless and wire
line) and convergent (voice, data and video) digital network. It is capable of delivering a

27
range of services spanning the entire infocomm (information and communication) value
chain, including infrastructure and services — for enterprises as well as individuals,
applications, and consulting.

Today, Reliance Communications is revolutionizing the way India communicates and

networks, truly bringing about a new way of life.

Vision

“We will leverage our strengths to execute complex global-scale projects to facilitate

leading-edge information and communication services affordable to all individual

consumers and businesses in India.

We will offer unparalleled value to create customer delight and enhance business

productivity.

We will also generate value for our capabilities beyond Indian borders and enable millions

of India's knowledge workers to deliver their services globally.”

Reliance Communications is now among the three most valuable private sector companies

in India, and the five most valuable telecom companies in Asia. In the current

Fiscal, Reliance Communications will spend Rs 16,000 crore to further expand and

strengthen its network coverage across India and the rest of the world.

In addition to organic growth, Reliance Communications will leverage the advantages

derived from this impressive financial platform to explore and pursue any significant

28
Opportunities available in the telecommunications sector. "We are currently evaluating a

number of inorganic opportunities in select international markets to further expand our

footprint," Ambani said.

Reliance Communication’s One India, One Tariff plan allowed millions to connect across

India at just one rupee a minute. The company was the first one to break the Rs 1,000

entry-barrier with the launch of the lowest-cost classic brand handset at Rs 777.

As per its expansion plan, Reliance Communications will have the single largest wireless

network in the world, covering over 900 mn Indians or more than 15% of the global

population. It will cover 23,000 towns or every single Indian habitation with a population of

over 1,000. Reliance Communications will cover almost 100% of all rail routes, providing

seamless voice, video, radio, and Internet connectivity to 14 mn commuters every day. It

will also cover almost 100% of all national highways, and 84% of all state highways, giving

millions of users the power to talk, text, surf, play, chat or simply stay in touch across nearly

the entire length of India's 2,00,000-km-long road network.

Having achieved tremendous growth, the main challenge for Reliance Communications is

to improve quality of service and ARPU. Its enterprise business is also not in a position to

compete with the global majors. Stock market valuations may boost the fortunes of an

entrepreneur, but Ambani needs to address the issues faced by the growing mobile

customer base, especially in India, where bureaucracy takes pride in checking the

businessman.

29
Chairman’s Profile

Anil D. ambani

Regarded as one of the foremost corporate leaders of contemporary India,Shri Anil D

Ambani, 48, is the chairman of all listed companies of the Reliance ADA Group, namely,

Reliance Communications, Reliance Capital, Reliance Energy and Reliance Natural

Resources limited.

He is also Chairman of the Board of Governors of Dhirubhai Ambani Institute of Information

and Communication Technology, Gandhi Nagar, Gujarat.

Till recently, he also held the post of Vice Chairman and Managing Director of Reliance

Industries Limited (RIL), India’s largest private sector enterprise.

Anil D Ambani joined Reliance in 1983 as Co-Chief Executive Officer, and was centrally

involved in every aspect of the company’s management over the next 22 years.

30
 He is credited with having pioneered a number of path-breaking financial innovations in the

Indian capital markets. He spearheaded the country’s first forays into the overseas capital

markets with international public offerings of global depositary receipts, convertibles and

bonds. Starting in 1991, he directed Reliance Industries in its efforts to rise over US$ 2

billion. He also steered the 100-year Yankee bond issue for the company in January 1997.

He is a member of:
• Wharton Board of Overseers, The Wharton School, USA
• Central Advisory Committee, Central Electricity Regulatory Commission
• Board of Governors, Indian Institute of Management, Ahmadabad
• Board of Governors Indian Institute of Technology, Kanpur

In June 2004, he was elected for a six-year term as an independent member of

the Rajya Sabha, Upper House of India’s Parliament a position he chose to resign
voluntarily on March 25, 2006.

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Awards and Achievements:

• Conferred the ‘CEO of the Year 2004’ in the Platt’s Global Energy Awards
• Rated as one of ‘India’s Most Admired CEOs’ for the sixth consecutive year in the
Business Barons – TNS Mode opinion poll, 2004

Particular Percentage

TV advertisements 33%

Print Media 25%

Service provider 32%

Other Source 10%

• Conferred ‘The Entrepreneur of the Decade Award’ by the Bombay Management

Association, October 2002
• Awarded the First Wharton Indian Alumni Award by the Wharton India Economic
Forum (WIEF) in recognition of his contribution to the establishment of Reliance
as a global leader in many of its business areas, December 2001.

Board of director

From Annual Report – FY 2010

Shri Anil D. Ambani – Chairman

25%

40% DATA
MOBILE TV
VIDEO CALLING
OTHER
25% 32
10%
33