Day 1 : Overview of Telecom Industry



The telecom industry has been divided into two major segments, that is, fixed and wireless cellular services for this report. Besides, internet services, VAS, PMRTS and VSAT also have been discussed in brief in the report.
In today’s information age, the telecommunication industry has a vital role to play. Considered as the backbone of industrial and economic development, the industry has been aiding delivery of voice and data services at rapidly increasing speeds, and thus, has been revolutionising human communication.
Although the Indian telecom industry is one of the fastest-growing industries in the world, the current teledensity or telecom penetration is extremely low when compared with global standards. India’s teledensity of 36.98% in FY09 is amongst the lowest in the world. Further, the urban teledensity is over 80%, while rural teledensity is less than 20%, and this gap is increasing. As majority of the population resides in rural areas, it is important that the government takes steps to improve rural teledensity. No doubt the government has taken certain policy initiatives, which include the creation of the Universal Service Obligation Fund, for improving rural telephony. These measures are expected to improve the rural tele-density and bridge the rural-urban gap in tele-density.

Evolution

Indian telecom sector is more than 165 years old. Telecommunications was first introduced in India in 1851 when the first operational land lines were laid by the government near Kolkata (then Calcutta), although telephone services were formally introduced in India much later in 1881. Further, in 1883, telephone services were merged with the postal system. In 1947, after India attained independence, all foreign telecommunication companies were nationalised to form the Posts, Telephone and Telegraph (PTT), a body that was governed by the Ministry of Communication. The Indian telecom sector was entirely under government ownership until 1984, when the private sector was allowed in telecommunication equipment manufacturing only. The government concretised its earlier efforts towards developing R&D in the sector by setting up an autonomous body – Centre for Development of Telematics (C-DOT) in 1984 to develop state-of-the-art telecommunication technology to meet the growing needs of the Indian telecommunication network. The actual evolution of the industry started after the Government separated the Department of Post and Telegraph in 1985 by setting up the Department of Posts and the Department of Telecommunications (DoT).
The entire evolution of the telecom industry can be classified into three distinct phases.

  • Phase I- Pre-Libralisation Era (1980-89)
  • Phase II- Post Libralisation Era (1990-99)
  • Phase III- Post 2000
Until the late 90s the Government of India held a monopoly on all types of communications – as a result of the Telegraph Act of 1885. As mentioned earlier in the chapter, until the industry was liberalised in the early nineties, it was a heavily government-controlled and small-sized market, Government policies have played a key role in shaping the structure and size of the Telecom industry in India. As a result, the Indian telecom market is one of the most liberalised market in the world with private participation in almost all of its segments. The New Telecom Policy (NTP-99) provided the much needed impetus to the growth of this industry and set the trend for libralisation in the industry.


Company Profile  ( BSNL )

Growth Drivers & Challenges

Currently, free fall in voice call charges has undoubtedly impacted the revenues. In the present scenario of the tariff war BSNL has no option but to match the market trend. However, we expect that there will be a surge in voice traffic due to reduced rates which will compensate the dip in revenue to some extent. As pricing of any service cannot ignore the basic underlying costs on a long run, we are of the opinion that sooner or later, tariffs will stabilise at some sustainable point.
Biggest revenue drivers for BSNL are Broadband, 3G and Value Added Services on Broadband and Mobile. At present, value added service contribute to approximately 8% of mobile revenues. With increased focus on mobile broadband and multimedia services on 3G, supported by Mobile Advertising and Mobile Banking & Commerce Services, BSNL’s revenue may get a boost. We have also started sharing our passive infrastructure with other operators as another revenue earning stream.

Mr. K Goyal
Chairperson and Managing Director
About the Company
Bharat Sanchar Nigam Ltd (BSNL) was established in the year 2000 by the GoI. The company provides a wide range of telecom services in India. It has telecom training institutes which have been accredited with ISO 9000 quality certification. The company has also received National Energy Conservation Award in 2008-09 for the 2nd time in a row from Bureau of Energy Efficiency. BSNL has been one of the first service providers in India to launch 3G services across 284 cities as on November 30th, 2009. The company currently serves more than 55% of the broadband services market in India.
Areas of Operation
BSNL provides a wide range of services including landine, cellular (GSM and CDMA), Managed Services Network, MPLS VPN, VSAT, VoIP, VAS, audio, video and web conferencing, internet and broadband services among others. The company provides Internet services, under the brand name Sancharnet, through various modes that include Wi-Fi, Broadband, Direct Internet Access (DIAS), ISDN and PSTN dial-up services. The company also carries on activities of planning, installing, network integration and maintenance of switching and transmission networks.
The company operates through 26 circles all over India except Mumbai and Delhi. With services in around 0.55 mn village, 7330 cities/towns and 602 districts, BSNL has a major presence in rural areas. The company has in-house production units in Mumbai, Jabalpur, Richhai, Bhilai, Kolkata, Gopalpur and Kharagpur engaged in the production of GSM tower, SIM cards, Pay Phones, Mini Pillar, MPJ box, CT boxes, Line Jack units, Drop-wire units etc. The National Internet Backbone (NIB) of the company has 432 points of presence and provides Internet service to approximately 1 mn dial-up customers including about 3.5 mn customers on CLI (caller line identity) basis. This network helps the company transport IP traffic to every corner of the country.
Connections; Capacity and Subscriber Base Equipped Capacity
  • Presence – 26 circles
  • Fixed line – 54.1 mn
  • Cellular – 51.5 mn
Working Connections / Subscribers
  • Fixed Telephone + WLL – (28.2 mn+5.6mn) 33.8 mn
  • Cellular mobile Connections – 55.2 mn
  • Broadband Connections – 4.5 mn
  • Internet Connections – 3.9 mn
  • Total number of 2G Connections - 55 mn (as on
    November 30th, 2009)
  • Total number of 3G Connections - 0.08 mn (as on November 30th, 2009)
Transmission System (as on September 30th, 2008)
  • Microwave transmission - 50,430 Route kms
  • Optical fiber - 5,60,086 Route kms
As on November 30th, 2009 the total number of villages and cities covered by mobile services stood at 346,878 and 23,924 respectively.
Ongoing Projects
  • BSNL has already covered around 95% inhabited villages in the country as per Census 2001. For increasing the penetration in rural market, BSNL is working on various schemes.
  • Under Bharat Nirman Programme of Government of India, BSNL has to provide 66,822 Village Public Telephones (VPT). Currently it has covered 60,208 villages and aims to cover the remaining villages during the current financial year (FY10).
  • BSNL has entered into an agreement with Universal Service Obligation Fund (USOF) for providing VPT facility in 62,443 uncovered inhabited villages. 55% work has been completed in this regard. The remaining work is scheduled to be completed progressively during the next 15 months. BSNL also entered into an agreement with USOF to provide rural phones in 1,267 specified areas (SDCAs). 21.51 lakh rural phones have already been provided under this agreement and efforts are being made to provide more.
  • BSNL launched the wireless broadband services using WiMAX e-enabled technology, in Pisangan, Ajmer (Rajasthan) on 13th December 2009. This unique technology has been deployed for the first time in India.
In the first phase BSNL plans to cover 1000 Block Headquarters across the country out of which 32 Block Headquarters in Rajasthan will be covered. This will provide high speed wireless broadband connectivity to 11,500 Common Service Centers in respective Blocks. Through this technology, BSNL has planned to cover the remaining Block Headquarters for connecting 50,000 Common Service Centers in next Phase. This project is being supported by Department of Information Technology, Govt. of India.
Future Plans
  • Connect villages having 1,000 and above population
  • During the next 2 years (2010 – 2012), BSNL plans to provide large number of phone connections and Broadband connections on ADSL as well as Wireless technology. It also plans to increase its existing Optical Fibre Cable network and TAX capacity.
  • Aggressive marketing to tap the demand for the 3G technology to enable high speed data transfer applications.
  • Extending the coverage of 3G and WiMAX.
  • Introduce new value added services such as Mobile TV, E-Banking, Mobile Broadband, MMS etc using new technology such as WiMAX.
  • Introduction of new services like FTTH, VOIP etc.
  • Upgradation of existing network to NGN
  • Providing end to end total telecom solutions.
  • Infrastructure sharing.
  • Extensive Enterprise Solution Expansion Plan.
Source :https://www.dnb.co.in/


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