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Market Studies
India Telecom Series: Vol. 2
Cellular & Wireless Markets
Updated 2004 Edition

Release: February 1, 2004
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Overview | Table Of Contents

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Significant changes have taken place in the telecommunications policy and market in India in the last few years, and particularly in the last two years. Favorable government policies and lower costs have now created a platform for rapid growth. Teledensity, which was around 3% at the end of 1997, is about to touch 6%, and expected to reach 10% by 2006 - more than a 100 million telephone connections. As in other markets, this is being driven by dramatic growth in cellular phone usage. For instance in the month of October 2003, India added more than 2 million cellular (GSM+CDMA) users, making it one of the fastest growing telecom markets in the world. The following is a description of the changes that have been made to the original report. A revised table of contents is also included.

Changes on the policy front:
  • A new National Telecom Policy (1999) introduced.
  • New telecom regulatory framework
  • Privatization of government telecom companies
  • Completion of licensing process for cellular & basic telecom, and Internet services
  • Second round of licensing for cellular
  • Licenses issued to private companies in national long distance, ILD
  • Opening up of VoIP for ILD
  • Announcement of a new policy in November 2003, that allows for unified licensing for fixed and mobile telephony

|Market developments:

  • Growth in operations of service providers (both size and number of operators)
  • Increase in competition in the industry has led to a sharp fall in tariffs
  • M&A activity as a result of increased competition
  • Introduction of WLL and a consequent conflict between WLL and GSM

In light of the market developments, the updated report contains new and updated information and analysis on:

  • Liberalization in Telecommunications
  • The new telecom regulatory structure in place (including creation of a disputes settlement body - TDSAT)
  • List of current wireless service operators in the country
  • Details of the operations of all wireless service providers including subscribers, growth, market shares, strategies, etc., analyzed by circle. These include operators in cellular (GSM), WLL, paging, PMRTS and satellite communications
  • Comparisons of tariff structures of Indian wireless operators with each other and with wireless operators in Asia and other developing markets
  • Current market structure including competition and M&A activity, likely survivors, future outlook and structure
  • Analysis of data services offered
  • Impact of competition on tariffs and ARPU
  • Technology trends in wireless telecom in India
  • Total investment in the wireless telecom in India to date, analyzed by segment, source, etc.
  • Current wireless telecom infrastructure in the country, future outlook.
  • Conflict between WLL and cellular GSM operators, its likely resolution
  • Problems in Government policy, spectrum allocation and interconnection
  • The handset market in India - GSM and CDMA
  • Market for wireless telecom equipment, main vendors and their relationships with service providers
  • Profiles of major companies in the wireless sector (including equipment manufacturers)

Apart from this, existing sections have updated:

  • Sections on overall demographic, political and economic scenario (including economic reforms) have been updated.
  • Changes in the Government's foreign direct investment policy (FDI), particularly with respect to the telecom sector.

Table of Contents

Executive Summary

1.0 Country Background
1.1 Demographics
1.2 Regional Background
1.2.1 Northern Region
1.2.2 Southern Region
1.2.3 Western Region
1.2.4 Eastern Region
1.3 Population
1.4 Distribution of Wealth
1.5 Teledensity
1.6 Currency
1.7 Conducting Business in India
1.7.1 Indian Corporations
1.7.2 Partnerships
1.7.3 Foreign Companies Establishing Offices in India

2.Organization of Government and the Economic Sector
2.1 The Political System
2.2 The Executive Branch
2.3 The Legislature
2.3.1 State Governments
2.3.2 Union and State Jurisdictions
2.4 The Legal System (Judiciary)
2.5 The Political Situation
2.5.1 Background
2.5.2 Current Political Situation
2.6 The Economic System
2.6.1 The Banking and Financial System
2.7 Economic Reforms
2.7.1 Aims of Economic Reforms
2.7.2 Liberalized Foreign Investment Policy
2.7.3 Foreign Investment Promotion Board (FIPB)
2.7.4 Import Policies
2.8 Economic Outlook
2.8.1 Industrial Growth
2.8.2 Fiscal Debt and Government Spending
2.8.3 Exports, Earnings and Investment
2.8.4 Highlights of the Indian Economy

3.0 Organization of the telecommunications sector
3.1 Organizational Structure
3.1 Organizational Structure
3.2 Evolution of the Regulatory Framework
3.3 The Department of Telecommunications (DoT)
3.3.1 DoT Industrial and Economic Policies
3.4 Liberalization
3.4.1 History of Liberalization
3.4.2 New National Telecommunication Policy (NTP) 1994
3.4.3 New National Telecommunication Policy (NTP) 1999
3.4.4 Other changes in the regulatory regime
3.4.5 The Convergence Bill
3.5 Regulatory/ Policy Mechanisms
3.5.1 DoT in the liberalized era (Separation of DoT & BSNL)
3.5.2 Telecommunications Regulatory Authority of India (TRAI)
3.5.3 TDSAT
3.6 Basic Services
3.6.1 Basic Licenses Awarded/ Terms
3.6.2 WLL
3.6.2 International Long Distance Telephony
3.6.3 National Long Distance
3.7 Cellular Services
3.7.1 Cellular Service Licenses
3.7.2 Bidding Rounds I & II
3.7.3 Problems with Licensing policy
3.8 Internet
3.8.1 ISP Licensing Policy
3.8.2 Voice Over Internet Services
3.9 Conflict between WLL and GSM
3.10 Policies for VSAT
3.11 Interconnection

4.0 Investment in India's Wireless sector
4.1 Investment in the Indian Wireless sector
4.2 Public vs. Private sector investment
4.3 Domestic vs. Foreign Investment
4.4 Analysis of major individual investments
4.5 Analysis of investment
4.6 Future investment needs and outlook

5.0 Cellular (GSM)
5.1 Introduction
5.2 Licensing & Liberalization of the sector
5.2.1 The Licensing Process
5.2.2 Cellular Service Categories
5.2.3 Winners & Losers
5.2.4 Problems with Licensing policy
5.3 Market Shares and Growth
5.3.1 Analysis by circle (growth rates, subscriber nos., market shares for each circle)
5.3.2 All India Analysis
5.3.3 The Entry of BSNL and its Impact on the market
5.3.4 Analysis of Strategies of Major Players
5.3.5 Future Outlook and Growth
5.4 Tariffs and Rates
5.4.1 The impact of competition
5.4.2 Comparison of tariffs across India
5.4.3 Comparison of tariffs across Asia
5.4.4 Comparison of tariffs with other major developing country markets
5.4.5 Outlook for Tariffs
5.5 Value-Added Services
5.5.1 The growth of SMS
5.5.2 Data services
5.5.3 Factors influencing demand for value-added services
5.6 ARPU Analysis
5.6.1 Impact of Competition on Tariffs and ARPUs
5.6.2 Factors influencing demand for services and revenues
5.7 Roaming
5.8 Frequency Clearances
5.9 Interconnection
5.10 Revenue Sharing
5.11 Technology Trends and Path

6.0 Wireless Local Loop(WLL)
6.1 Background
6.2 WLL Licenses
6.2.1 The WLL vs GSM controversy
6.2.2 Regulatory Evolution
6.2.2 Interconnect Problems
6.3 Market Shares and Growth
6.3.1 Analysis by circle (growth rates, subscriber nos., market shares for each circle)
6.3.2 All India Analysis
6.3.3 WLL vs CDMA Market Shares
6.3.3 The Entry of Reliance and its Impact on the market
6.3.4 Analysis of Strategies of Major Players
6.3.5 Future Outlook and Growth
6.4 Tariffs and Rates
6.4.1 The impact of competition
6.4.2 Comparison of tariffs across India
6.4.3 Comparison of tariffs across Asia
6.4.4 Comparison of tariffs with other major developing country markets
6.4.5 Outlook for Tariffs
6.5 Value-Added Services
6.5.1 Data services
6.5.2 Factors influencing demand for value-added services
6.6 ARPU Analysis
6.6.1 Impact of Competition on Tariffs and ARPUs
6.6.2 Factors influencing demand for services and revenues
6.7 Roaming
6.8 Interconnect
6.9 Revenue Sharing
6.10 Technology Trends and Path

7.0 Industry Consolidation
7.1 Background
7.2 The impact of new licenses
7.3 Fragmentation of the Market
7.4 M&A Activity
7.4.1 Major deals
7.4.2 Buyers and Sellers (analysis of who might sell/buy, and why)
7.4.3 Snapshot of the industry in 2008 (Survivors)
7.5 Regulatory Obstacles to Consolidation

8.0 Equipment and Handset Markets
8.1 The Market for Handsets
8.1.1 Handset prices
8.1.2 Handset subsidies
8.1.3 Market for handsets - GSM
8.1.4 Market for handsets - CDMA
8.1.5 Market shares of major handset manufacturers
8.1.6 Major Handset brands/models available in India
8.1.6 The "Grey" Market for Handsets
8.2 The Market for Equipment
8.3 Major Players
8.3.1 Samsung
8.3.2 Motorola
8.3.3 Etc., etc.
8.4 Analysis of Vendor Relationships

9.0 Satellite Communications
9.1 Growth of Satellite Communications in India
9.2 Satellite Earth Stations
9.3 Global Mobile Personal Communications Systems (GMPCS)
9.4 Very Small Aperture Terminals (VSAT)
9.4.1 VSAT Operators
9.4.2 Factors Influencing Growth
9.4.3 Problems Facing the Industry
9.4.4 Current State of the Industry
9.4.5 Future Outlook

10.0 Profiles of major players
12.1 Service Providers
12.1.1 BSNL
12.1.2 MTNL
12.1.3 Birla Tata AT&T (Idea)
12.1.4 etc.

11.0 Equipment Vendors (Indian)
12.2.1 ITI
12.2.2 HFCL
12.2.3 etc., etc.
12.3 Equipment Vendors (Foreign)
12.3.1 Alcatel
12.3.2 Motorola
12.3.3 etc., etc.

12.0 List of Contacts