The Indian telecom industry is the world’s fastest growing industry with 792 million mobile phone subscribers as of February 2011. It is also the second largest telecommunication network in the world in terms of number of wireless connections after China. The industry will reach around $80 billion in revenues by next year showing an astounding CAGR of over 25% and will employ a stupendous 1 crore employees making it one of the biggest value creators in India in recent times.However the telecom companies in India after enjoying a boom period in the early 2000s have faced a couple of tough years with hypercompetition leading to a price war in auction of 3G spectrum.This was followed by one of the most high profile corruption scandals in the country which resulted in the jailing of the former telecom minister in the 2nd auction of 2G spectrum.Most of the telecom companies have been found to be implicated in colluding with sleazy politicians/bureaucrats in looting the Indian taxpayers.India Real Estate Sector is one of the most corrupt in the country and after the 2G Scam,the telecom sector is giving it close competition for the No.1 spot in corruption
Despite these problems,India is set to see another spurt of growth as 3G in India has the potential to bring Internet to India’s massively under penetrated population which has phones but not computers.
Mobile Number Portability (MNP)
India is a fast growing in terms of mobile usage. A mobile phone has become a necessity in today’s lifestyle. As a result India has turned out to be a competing hub for many mobile companies. Mobile Number Portability (MNP) was launched in India in January 2011, which allows the user to retain the existing number while giving him an option to change the subscriber. India, the world’s second largest market for mobile phones is foretasted to become an even larger market with unit shipments of 209 million each year by 2016 at a compound annual growth rate of 12% from 2010 to 2016, according a market study. India’s mobile market has changed with local mobile companies drastically cutting into the market of the dominant companies like Nokia.The mobile entertainment industry in India is also witnessing significant growth and a latest research forecasts this market to reach $5 billion in 2015 from $1.2 billion in 2009, growing at a CAGR of 26%
Telecom Industry in India – Laggards Losing out Badly
Given below is a list of the telecom companies in India – some are State owned, some private & some formed in collaboration with other Foreign companies. However, in recent years, due immense competition in Indian telecom sector, the State owned MTNL has been losing revenue and market share heavily. On February 23, 2011, The Department of Telecommunications (DoT) said it wanted to revive a proposal for the merger of state-owned operators BSNL and MTNL, as they have complimentary operations and can combine their strengths for synergies.Note BSNL and MTNL have been affected by bad management,an apathetic government and private competitors who have undermined the interests of BSNL/MTNL by underhand means.BSNL which was the No.1 player with an impregnable position has become an also ran as its capacity expansion was dogged by motivated red tape.
Bharat Sanchar Nigam Ltd. – One of the largest & leading public sector units in India. It was formed in October, 2000, is World’s 7th largest Telecommunications Company providing comprehensive range of telecom services in India BSNL is the only service provider, making focused efforts and planned initiatives to bridge the Rural-Urban Digital Divide ICT sector. Its wide network is present across India except Delhi & Mumbai. BSNL cellular service, CellOne, has 55,140,282 2G cellular customers and 88,493 3Gcustomers as on November 2009. It has 35.1 million Basic Phone subscribersform . 85 per cent share of the subscriber base and 92 percent share in revenue terms. BSNL has more than 2.5 million Internet Customers who access Internet through various modes viz. Dial-up, Leased Line, DIAS, Account Less Internet(CLI). BSNL has been adjudged as the NUMBER ONE ISP in the country.
Mahanagar Telephone Nigam Ltd MTNL) – It is a state-owned telecommunications service provider in the metro cities of Mumbai and New Delhi in India. The company was a monopoly until 1992, when the telecom sector was opened to other service providers. MTNL provides fixed line telephones, cellular connection of both GSM & CDMA and internet services through dialup and DSL — Broadband internet. MTNL also provides other services such as VPN,Internet Telephony- VOIP and leased lines through BSNL and VSNL. MTNL has also unveiled very cost-effective Broadband Internet access plans (TriBand) targeted at homes and small businesses. MTNL has suffered even more than BSNL and just about survives in a pathetic condition.
Private Indian owned Companies
Reliance Communications Ltd. – One of the major Indian telecommunication companys headquartered in Navi Mumbai, India. It is the 16th largest operator in the world with more than 128 million subscribers. It is India’s largest and only telecom operator offering nationwide CDMA, GSM and 3G mobile services. Anil Dhirubhai Ambani Group, an offshoot of the Reliance Group, 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 Communications was the first Indian company to make handsets so popular in India. It is present in almost the whole of country – Andhra Pradesh, Bihar, Chennai, Delhi, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Kerala, Kolkata, Madhya Pradesh, Maharashtra, Mumbai, Orissa, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh (E), Uttar Pradesh (W), West Bengal.(AUSPI). The Equity Shares of RCOM are listed on Bombay Stock Exchange Limited and National Stock Exchange Limited. Reliance Communications paid Rs.5864.29 crores for 3G spectrum in 13 circles. in 2010, RCom became the second private sector telecom company (fourth overall) to launch 3G services in India, with a 4 city launch in Chandigarh, Delhi, Kolkata and Mumbai.
TATA Teleservices Ltd. – is the pioneer of the CDMA 1x technology platform in India. It has embarked on a growth path since the acquisition of Hughes Tele.com (India) Ltd [renamed Tata Teleservices (Maharashtra) Limited] by the Tata Group in 2002. It launched mobile operations in January 2005 under the brand name Tata Indicom and today enjoys a pan-India presence through existing operations in all of India’s 22 telecom Circles – Assam, Andhra Pradesh, Bihar, Chennai, Delhi, Gujarat, Haryana, Himachal Pradesh, J & K, Karnataka, Kerala, Kolkata, Madhya Pradesh, Maharashtra, Mumbai, North East, Orissa, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh (E), Uttar Pradesh (W), West Bengal (AUSPI). The company is also the market leader in the fixed wireless telephony market. It is the first to pioneer the per-second tariff option—part of its ‘Pay for What You Use’ pricing paradigm. . Tata Teleservices Limited has also become the first Indian private telecom operator to launch 3G services in India under the brand name Tata DOCOMO, with its recent launch in all the nine telecom Circles where it bagged the 3G license.
Idea Cellular Ltd. – Initially a Birla-TATA-AT&T initiative, is now an Aditya Birla Group company. In 2005, AT&T sold its investment in Idea, and the year after Tatas also exited. Idea has its presence in Delhi (Metro), Andhra Pradesh, Gujarat, Haryana, Himachal Pradesh, Maharashtra, Kerala, Madhya Pradesh, Rajasthan, Uttar Pradesh (E), Uttar Pradesh (W) (COAI). The company is among the top four mobile telephony players in India with an 11 per cent all-India subscribers market share. Idea paid Rs.5768.59 crores for 3Gspectrum in 11 circles. Idea enjoys a market leadership position in many of its operational areas. It offers GPRS on all its operating networks for all categories of subscribers, and was the first company in India to commercially launch the next generation EDGE technology in Delhi in 2003.
Videocon Communications Ltd. – A Videocon group company which offers GSM mobile services GSM service.The company started its telecom services after the 2G Auction and operates in Tamil Nadu (including Chennai), Punjab, Haryana, Mumbai, Gujarat, Kerala, Madhya Pradesh, UP East, UP West, Himachal Pradesh.
Quadrant Televentures Ltd. – Formerly HFCL Infotel Limited, is a Unified Access Services Licensee in Punjab Telecom Circle. Commonly known by the name Connect, provides voice telephony In March 2010, it launched its GSM services in the Punjab Service Area. In April 2010, it acquired remaining interest in Infotel Tower Infrastructure Private Limited.
Private Companies with Majority Stake by Foreign Investors
Bharti Airtel Ltd. -It is the largest India mobile operator by subscriber base. Commonly known as Airtel, is an Indian telecommunications company that operates in 19 countries across South Asia, Africa and the Channel Islands. Airtel also offers fixed line services and broadband services. Airtel is the largest cellular service provider in India and fifth largest in the world present in Delhi (Metro), Mumbai (Metro), Kolkata (Metro), Chennai (Metro), Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Kerala, Karnataka, Madhya Pradesh, Maharashtra, North East, Orissa, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh (E), Uttar Pradesh (W), West Bengal (COAI). Airtel won 3G spectrum in 13 circles: Delhi, Mumbai, Andhra Pradesh, Karnataka, Tamil Nadu, Uttar Pradesh (West), Rajasthan, West Bengal, Himachal Pradesh, Bihar, Assam, North East, Jammu & Kashmir for Rs. 12,295 crores. Bharti Airtel wins broadband spectrum in four circles: Maharashtra, Karnataka, Punjab and Kolkata for Rs. 3314.36 crores.Airtel acquired Zain’s African operations for $10.7 billion to increase its base to more than 180 million globally.
Vodafone Ltd. – The world’s largest mobile telecommunications company measured by revenues and the world’s second-largest measured by subscribers. It operates networks in over 30 countries and has partner networks in over 40 additional countries. It owns 45% of Verizon Wireless, the largest mobile telecommunications company in the United States measured by subscribers. In India it is present in Andhra Pradesh, Chennai (Metro), Delhi (Metro), Gujarat, Haryana, Karnataka, Kolkata (Metro), Mumbai (Metro), Punjab, Rajasthan, Uttar Pradesh (W), Uttar Pradesh (E), West Bengal, Maharatshtra, Tamilnadu, Kerala, Jammu & Kashmir, Himachal Pradesh, Orissa, Bihar, Assam, North East, Madhya Pradesh (COAI). Its primary listing is on the London Stock Exchange and it is a constituent of the FTSE 100 Index. It has a secondary listing on NASDAQ.Note Vodafone entered India by acquiring the Hutchinson stake.
Aircel Group – a joint venture between Maxis Communications of Malaysia and Apollo Hospitalsof India. UTSB has a 74% stake in Aircel and the remaining 26% is with Apollo Hospitals. It is India’s Seventh largest GSM mobile service provider. It offers both prepaid and postpaid GSM cellular phone coverage throughout India.As on date, Aircel is present in all 23 telecom circles Assam, Bihar, Chennai, Himachal Pradesh, Jammu & Kashmir, North East, Orissa, Tamil Nadu, West Bengal, Kolkata, Delhi, Kerala, Karnataka, Andra Pradesh,UP(E), UP(w), Mumbai (COAI). Aircel has also obtained permission from Department of Telecommunications (DoT) to provide International Long Distance (ILD) and National Long Distance (NLD) telephony services. It also has the largest service in Tamil Nadu.
Aircel paid Rs.6499.46 crores for the 3G spectrum in 13 circles – the least cost per circle compared to other operators. The circles it will provide 3G in are Andhra Pradesh, Assam,Bihar, Jammu & Kashmir, Karnataka, Kerala, Kolkata,Madhya Pradesh, Chhattisgarh, North East, Orissa, Punjab, Tamil Nadu, Uttar Pradesh, Uttarakhand, West Bengal.Aircel paid Rs.3438crores for the broadband wireless access spectrum in 8 circles, the second highest wins overall – after Reliance Communications. The circles it has won spectrum are Andhra Pradesh, Assam, Bihar, Jammu & Kashmir, North East, Orissa, Tamil Nadu and West Bengal.
Loop Mobile Ltd. - In the year 2009, BPL Mobile rebranded itself as Loop Mobile and has been operating since then in Mumbai. BPL Mobile Communications Limited offers GSM wireless facilities in three states of India besides offering broadband facilities via wireless bplnet with an ADSL internet competence. It offers pre and post paid, data, and roaming services. The company has also started manufacturing handsets.
Spice Communications Ltd. - Now a subsidiary of Idea Cellular Ltd.which owns more than 80% equity in the company. The Aditya Birla Group took over the ownership of Spice Telecom for over Rs 2,700 crore. The company’s areas of operation are Karnataka & Punjab. The prepaid users(which form majority in India) had problems getting their phones recharged with prepaid balance when in roaming. Hence, Spice could not regain the market share inspite of its low tariffs.
S Tel Ltd.- is a joint venture between Siva Group (formerly Sterling Infotech Group) and Bahrain Telecommunications Company (Batelco). S Tel has acquired Unified Access Services Licenses (UASL) and spectrum to operate in six Category C circles – Orissa, Bihar, Himachal Pradesh, North East, Assam and Jammu & Kashmir. These licenses will enable the company to provide Unified Mobile service, wireless broadband and other innovative Value Added Services.
Unitech Wireless Ltd. – Unitech Group (32.75%) in joint venture with Norway’s telecom major Telenor (67.25%) had started its service in telecom business under the name of Uninor. It offers mobile telephony services in India. The company was incorporated in 2008 and is based in Gurgaon, India. The company holds a pan-India UAS licence to offer telecommunications services in each of India’s 22 circles & has also received spectrum for six circles. Unitech has sold out a majority stake in its telecom arm, making Unitech Wireless one of the few telecom companies controlled by foriegn telcos. The company benefited the most in the 2G spectrum allocation scam. Its promoters gained Rs 2,342 crores and now the company is under direct investigation by the Supreme Court over corruption charges.
Etisalat DB Telecom Pvt. Ltd – is a joint venture between Etisalat and Dynamix Balwas Group.Another telecom company which has now come under the Supreme Court Scanner with Balwa in jail. In 2009he Board of Etisalat DB, today announced the ‘change of name’ of the erstwhile Swan Telecom, a joint venture between Etisalat and DB Realty. The company has officially been re-named as Etisalat DB Telecom India Pvt. Ltd.Etisalat DB and its subsidiary has the Unified Services Access License in 15 circles including Andhra Pradesh, Delhi, Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Mumbai, Punjab, Rajasthan, Tamil Nadu (including Chennai), Uttar Pradesh (East), Uttar Pradesh (West), Madhya Pradesh and Bihar.
Sistema Shyam teleservices (SSTL) – Mobile TeleSystems OJSC (“MTS”) is the leading telecommunications group in Russia, Eastern Europe and Central Asia, offering mobile and fixed voice, broadband, pay TV as well as content and entertainment services. In December 2008, MTS extended its brand outside the CIS borders. MTS and Shyam Telelink Limited, JSFC Sistema’s telecommunications subsidiary in India, announced the agreement to allow Shyam Telelink to use MTS brand in India.In 2008, Vodafone announced a partnership deal with MTS, whereby Vodafone services will be available to MTS subscribers and both companies have noted the potential for more efficient purchasing. MTS s present in Andhra Pradesh, Kerala, Rajasthan, Tamil Nadu (Incl.Chennai), Kolkatta, West Bengal, Bihar, Delhi, Mumbai, Haryana, Maharashtra, UP (E), UP (W), Madhya Pradesh, Gujarat, Punjab (AUSPI). MTS has been listed on the New York Stock Exchange since July 2000 and trades under the ticker MBT. The Company’s shares have been listed locally on Moscow Interbank Currency Exchange (MICEX) since November 2003.
Telecom Scam in India
India’s Telecom Scam has been extensively covered in Greenworldinvestor.Read it from the following articles
- Indian Government puts Hurdles in 2G Telecom Case Fails as Supreme Court orders Daily Hearings from April 13,Second Chargesheet on April 24
- Has the Tata Group reputation of honesty been tarnished after the Telecom Scam
- CBI 2G Telecom Scandal – Criminal Conspiracy,Cheating Charge against Essar,Reliance Communications;Will SC throw top executives in Jail like Raja
- Telecom Lobby and Lower Cost overcomes Security Concerns as Huawei,ZTE bag Indian 3G Equipment Orders
Group Company wise Subscriber details is given below (source Indian telecom associations)
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