Cellular Industry in India

CELLULAR SERVICE MARKET

Introduction
 Cellular services launched in India during
1999
 Cellular services split into two, namely
 GSM
 CDMA
 23circles in India ,grouped under Metro, A,
B and C.
 Metro circle makes up to 20.7% of the total
cellular usage in India.

Highest minutes of usage
India has the
lowest call tariffs
in the world, and
thus, the highest
minutes of usage
as well.
GSM v/s CDMA
 GSM  CDMA

 GSM900 and 1800  CDMA uses 1800 MHz

spectrum frequency band
 GSM subscriber base  Better call quality and
crosses the 200mn surfing speed
mark in ‘07-’08  Call costs cheaper
 Better roaming 
accessibility



 COMPARISON
GSM AND CDMA SUBSCRIBERS
Apr ’08 (in May ’08 (in
GSM mns)
199.18 mns)
205.80
CDMA 65.25 71.58
Market Players
 Airtel
 Vodafone

 Idea Cellular

 Reliance

 Tata Indicom

 BSNL
Airtel
 Bharti Tele-Ventures Ltd. (BTVL) aka Bharti
Airtel
 Co provides telephone and internet access
over DSL in 14 circles.
 Submarine cable landing station at Chennai

 Airtel services include mobile services (GSM),

broadband and telephone services, long-
distance services and enterprise services.
 Vodafone and SingTel holding Airtel stakes

 Signed MoU with Nokia-Siemens for $9mn

expansion of mobile and fixed network.
Vodafone
 Vodafone Essar acquired 67%stake of Hutch
for US$11.1bn
 Voice Data Fone, providing voice and data
services over mobile phones
 Operates in 25 countries across 5 continents
and 40 partner networks with over 200 mn
customers worldwide
 Rapid increase in revenue by 50% with an
avg. of 1.5mn net additions per month
 Among the fastest growing cellular service
cos. of India
 Earned profits of about £6756mn as on March
‘09
Idea Cellular
 First cellular co to launch background tones,
group talk and a complete suite of mobile
email services
 Initially started as a merger of Tata Cellular
and Birla AT&T Communications in 1995
 The co had a split with the Tata taking an exit
from the co for Rs.44.06bn
 Launched 3 more circles, Rajasthan, Himachal
Pradesh and UP (East)
 Acquisition of Escotel in 2004 covered
Maharashtra, Goa, Gujarat, AP, MP,
Chattisgarh, UP (West), Haryana, Kerala and
Delhi.
Reliance
 Reliance Infocomm, Reliance Telecom and Flag
Telecom a part of Reliance Communications
Ventures (RCoVL)
 Reliance Infocomm uses CDMA2000
technology
 Reliance telecom-GSM services in 340 towns
within 8 circles
 CDMA services cover 19 states, almost 65% of
India
 Provides both wireless and wireline services as
well as convergent digital network

Tata Indicom
 Incorporated in 1995 and is the first one to
provide CDMA mobile services
 In 2002, acquired Hughes Telecom (I) Ltd and
launched Talk World plan in 2007
 With total investment of Rs. 19924 Cr.
Operates in 20 circles in India
 Partnership with Motorola, Ericsson, Lucent
and ECI Telecom for reliable and advanced
network
 Leader in fixed wireless telephony with 3.8mn
customer base
 Includes wireless desktop phones, public
phone booths, voice and data services
BSNL
 First one to provide 3G services
 India’s oldest and largest CSP and also largest
PSU, market value $100bn
 Provides services like wireline, CDMA mobile,
GSM mobile, internet, broadband, carrier
service, etc.
 World’s 7th largest Telecommunications Co
Market Share and Growth
 Major growth drivers – intl. and domestic long
distance telephony services
 According to Unified Licensing Policy 15% of
operator revenue goes to the govt.
 India’s cellular market has grown rapidly
since last few years and is poised to be the
2nd largest network globally by 2012
 Almost 80% of the cellular subscriber base
from pre-paid segment
 Avg. growth rate is about 85% p.a.


 MOST (Mobile Operators Shared Tower)
started infra-sharing in India with the
concept of multi-technology (GSM &
CDMA) and multi operators (upto 6
operators) sharing a single tower.
 Several Indian firms gaining a foothold in
the global market.





 Airtel 105177635

MARKET SHARE OF COMPANIES – JULY 2009



Vodafone 78680291
BSNL 50700367
Idea 48516824
Aircel 23101900
Reliance 12840939
MTNL 4332631
Loop 2350537
Total 325701124
Marketing Strategies
 Revenues used to reduce airtime tariffs, long
distance calling prices and handset prices.
 This reduction in airtime tariffs increases the
demand for cellular services.
 Cos focusing on rural areas for more
connections.
 Increasing VAS provided by different cellular
cos
 Other promotional strategies include –
celebrity endorsements, loyalty rewards,
creative ads, business solutions, talktime
schemes, etc.
 Target market of cellular cos being the youth
Value Added Services
 As per COAI, income from VAS was 10% of
total income of service providers in 06-07
 SMS 57%
 Caller line idntification6%
 Other VAS 19%
 Ring tones 7%
 Content download 6%
 GPRS5%
 VAS supplied by mobile network operators or
VASP/CP
 Many national and intl investors ready to
invest in this segment of telecom market.
3G SPECTRUM – THE LATEST
BUZZ
3G technology
 Supports diverse multimedia applications
 Enables triple play and broadband services

 Requires huge bandwidth (15-20 MHz)

 Providing high-speed internet, fast

downloading and video calling.
 More than 60 3G networks present across 25
countries.
 Transfers both voice data and non-voice data

 BSNL and MTNL spectrums allotted

immediately and private cos to get spectrum
allocations by 2009



 Main highlight – video calling
 Finance Ministry decided of reserve price to be
Rs. 4040cr. In ‘08 but it has been recently
brought down by DoT to Rs. 3500cr.
 Metro & Circle A Rs. 160cr.
 Circle B Rs. 80cr.
 Circle C Rs. 30cr.
 Govt. to earn about Rs. 30k-40k cr. for 4
spectrum blocks



Future Trends
 Location based services
 Mobile music will increase with better
bandwidth
 Migrattion to 3G will increase ARPU

 Mobile commerce might be developed further

 Mobile email will be driven by enterprises

 Stocks on mobile will see an uptake

TRAI
 TRAI’s mission is to create and nurture conditions
for growth of telecommunications in the country
in a manner and at a pace which will enable
India to play a leading role in emerging global
information society.


 Objective of TRAI - to provide a fair and

transparent policy environment. In pursuance of
above objective TRAI has issued from time to
time a large number of regulations, orders and
directives to deal with issues coming before it
and provided the required direction to the
evolution of Indian telecom market from a
Government owned monopoly to a multi-
operator multi-service open competitive market.
The directions, orders and regulations issued
cover a wide range of subjects including tariff,
interconnection and quality of service as well as
governance of the Authority.
COAI
 The Cellular Operators Association of India
(COAI) was constituted in 1995 as a
registered, non-profit, non-governmental
society dedicated to the advancement of
communication, particularly modern
communication through Cellular Mobile
Telephone Services. With a vision to
establish and sustain a world-class cellular
infrastructure and facilitate affordable
mobile communication services in India,
COAI's main objectives are to protect the
common & collective interests of its
members.