Indian Telecommunications

An Overview

History

Telephone services in India begun in a small scale with the commissioning of a 50-line manual telephone exchange in 1882 in Kolkata. This was less than five years after the invention of the telephone by Alexander Graham Bell. India had approx. 82,000 telephone connections at the time of independence (1947) and by 1984 the number of connections had slowly risen to 3.05 million. India's telecom network was notoriously unreliable and only available to a small section of households along with the corporate sector. The telecom sector was a government monopoly until 1994 when liberalisation gradually took place. Cellular service was launched in November 1995 in Kolkata.

Expanding Network

The Indian telecom industry has grown rapidly during the last few years. India has the third largest (based on the total number of fixed/mobile subscriber lines) telecom network in the world and the second¹ largest mobile network with over 320² million subscribers at the end of Oct '08. The total number of telephone lines had increased to almost 354 million at the same time. While subscriber volumes continue to grow in the four metros (Mumbai, Delhi, Kolkata and Chennai) and other major cities, the real growth potential is in rural India comprising of over 600,000 villages. The number of phone subscribers in rural areas (rural population amounts to 70 % of India's over 1.1 billion inhabitants) was only 64 m at the end of Nov '07. An estimated base of 650 million subscribers is envisaged by 2012. Revenue from fixed and mobile services amounted to an estimated Rs 880 bn in fiscal year 2005. National long distance (NLD) and international long distance (ILD) service revenues grew to an estimated Rs 93 bn in the same year. While the number of mobile subscribers increased by 27.9 m in 2005, this figure skyrocketed to 83 m in 2007. Over 100 million mobile subscribers were added during the 12-month period ending July '08.

The government has set a target under the Bharat Nirman program, to connect all the remaining villages without telephone services, basically VPT's (Village Public Telephones), by the end of 2009.

¹ Based on Mar '08 statistics: China - 541 m, India - 261 m and USA - 258 m
² This figure includes GSM, CDMA and WLL-Fixed subscribers

Mobile

While anywhere between 7-9 million new mobile subscriber lines are being added every month (India is along with China the world's largest market for number of added new mobile subscribers), the number of landlines is gradually decreasing. Overall teledensity grew to almost 30 % by the end of August '08. This is a low figure in comparison to many other nations but nevertheless a quantum leap to what the percentage was even just a few years ago. Mumbai and Delhi (NCR) are one of the few metro areas globally to have over 13 m and 15 m mobile subscribers respectively. The FDI cap in the telecom sector is currently 74 %. UK's Vodafone Group recently acquired a 52 % stake in Hutchison Essar, India's fourth largest mobile service provider. Bharti Airtel is the first Indian operator to exceed a subscriber base of 50 million.

Mobile number portability (MNP) is expected to be available across India by Q3/09 starting with the four metros (Chennai, Delhi, Kolkata and Mumbai). 3G (third generation) mobile services would be available after the government's plans to auction radio spectrum to 4-5 operators/circle have been finalised by the end of 2008. BSNL and MTNL are expected to launch 3G services by mid-2009 as these public sector operators have already been allocated 3G spectrum. Private sector operators are expected to launch similar services later in 2009. The number of broadband connections is growing albeit at a slow pace.

Telecom Manufacturing

A growing number of telecom companies have set up manufacturing facilities for the production of mobile phones and other telecom equipment to cater to India's growing telecom market and exports too. Nokia's plant, located in a Special Economic Zone (SEZ) at Sriperumbudur near Chennai, manufactures mobile handsets and network infrastructure equipment incl. base stations. Nokia's plant produces ca 8 m handsets a month. A slew of other telecom equipment manufacturers already have or are in the process of setting up production facilities in the same zone. These include Aspocomp Group (HDI printed circuit boards), Perlos (handset mechanics/mouldings), Salcomp (mobile phone chargers), Motorola (mobile handsets), Foxconn (mobile phones), Flextronics (mobile handsets, base stations and other electronic items), Sanmina-SCI (network components), Jabil, Laird (antennas, battery packs and EMI shielding products) and Wintek. Elcoteq's telecom plant located near Bangalore manufactures handsets among others. Samsung Electronics' mobile handset plant is located in Gurgaon, near Delhi. Alcatel and Ericsson manufacture base station and mobile switching equipment at plants located in Rae Bareli and Jaipur respectively. BPL Telecom manufactures GSM phones and LG Electronics India produces GSM phones in a plant near Pune. Kolkata based Xenitis Group plans to set up a mobile phone manufacturing facility located near Kolkata.

Mobile handsets account for 26 % of the total telecom equipment industry in India. The lion's share was held by the carrier equipment business while the enterprise equipment segment accounted for the remaining 14 %. The market size of the telecom equipment industry grew to Rs 954 (ca USD 22 bn).

Mobile Network Statistics

India's Largest Cellular Operators as at Jan 31 2008 (* June '08)
Operator	Subscriber Base (millions)
Bharti Airtel	69.4*
Reliance Infocomm Ltd.	50.8*
Vodafone Essar	49.2*
Bharat Sanchar Nigam Ltd.	33.7
Tata Teleservices Ltd.	22.5
Idea Cellular Ltd.	22.0

Mobile Subscribers (in millions) in the Four Metros as at April 30, 2008¹
City	GSM	CDMA²	Total	Operators
Delhi	10.72	5.79	16.5	Bharti Airtel, Vodafone Essar, MTNL, Idea Cellular, Reliance and Tata Tele
Mumbai	9.08	4.68	13.8	BPL Mobile, Vodafone Essar, MTNL, Bharti Airtel, Reliance and Tata Tele
Kolkata	5.25	2.72	8.0	Bharti Airtel, Vodafone Essar, BSNL, Reliable Internet, Reliance and Tata Tele
Chennai	5.82	1.43	7.3	Aircel Cellular, Bharti Airtel, Vodafone Essar, BSNL, Reliance and Tata Tele

¹ Source: COAI and AUSPI
² Excl. Wireless Fixed Subscribers

SOME FACTS & FIGURES ON INDIAN TELECOM

Number of telecom (mobile and landlines) subscribers: ca 354 million (as on 30.9.08)
Number of fixed line subscribers: 38.4 m (as on 30.9.08)
Number of cellular (GSM, CDMA and WLL-Fixed) subscribers: 315.3 m (as on 30.9.08)
Number of broadband subscribers: 4.9 m (as on 30.9.08)
Number of GSM cellular subscribers: 241 m (as on 31.10.08)
Number of CDMA cellular subscribers: 73.8 m (as on 31.8.08)
Overall teledensity: ca 306/1000 inhabitants (as on 30.9.08)
Number of PCO's (Public Call Offices): 2.27 m (as on 31.12.07)
Number of VPT's (Village Public Telephones): 0.55 m (as on 31.3.06)
More telecom at the Department of Telecommunications network status page.
Total revenues of telecom service providers (2005-06): Rs. 880 bn
Telecom equipment production (2007-08): Rs. 954 bn
Mobile handset market (2006-07): ca Rs. 214 bn

Currency: 1 USD equals approx. 50 Indian Rupees (Rs)

Govt. Telecom Links

DOT - Department of Telecommunications
BSNL Telecom Network Statistics
BSNL - Bharat Sanchar Nigam Ltd.
TRAI - Telecom Regulatory Authority of India
VSNL - India's public sector overseas telecommunications provider

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TELECOM NEWS

Indian Bandwidth
VOICE & DATA (India)

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FIXED LINE OPERATORS

Public Operators

BSNL Units
Calcutta Telephones (under BSNL)
Chennai Telephones (under BSNL)
MTNL - Mumbai and Delhi
MTNL Mumbai
MTNL Delhi

Private Operators

Tata Teleservices: Operates in Andhra Pradesh, Delhi, Gujarat, Karnataka and Tamil Nadu,Maharashtra
Bharti Tele-Ventures Ltd: Operates in Delhi, Haryana, Madhya Pradesh, Tamil Nadu and Karnataka.
Reliance Infocomm: India's largest CDMA mobile operator with some 10 million subscribers
HFCL Infotel: HFCL Infotel operates in Punjab and Chandigarh

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WIRELESS (GSM/CDMA) SERVICE PROVIDERS

GSM Network Coverage >>

Reliance Communications
BSNL - Bharat Sanchar Nigam Ltd.
MTNL: Provides cellular service in Delhi and Mumbai.
IDEA Cellular: Operates in Gujarat, Maharashtra, Goa, Andhra Pradesh, Madhya Pradesh, Haryana, Kerala, Chhattisgarh, Himachal Pradesh, Uttaranchal, Uttar Pradesh (West) and Delhi.
Aircel Ltd.: Operates in Assam, North Eastern states, Orissa, West Bengal, Jammu & Kashmir, Tamil Nadu (incl. Chennai) and Puducheri.
Bharti Airtel: Provides mobile phone service in all the 23 circles of India.
BPL Mobile Communications: BPL Mobile's cellular network coverage include Mumbai.
Vodafone Essar: Provides mobile phone service in 16 circles.
Spice Telecom: Provides mobile phone services in Karnataka and Punjab.
Aircell Digilink: Operates in Uttar Pradesh (East), Haryana and Rajasthan.