The history of Indian Telecommunications dates back to 1851 when the first operational land lines were laid by the authorities near Calcutta. In 1883, telephone services were merged with the postal system. In 1947, while India got its independency, the state had about 82,000 telephone connexions, which bit by bit rose up to 3.05 million by the twelvemonth 1984.

Telecommunication sector was considered as a strategic service and the authorities considered it best to retain control of the sector. The first alterations in telecommunications sector began to flux in 1980s when the private sector was allowed in telecommunications equipment fabrication. In 1985, Department of Telecommunications ( DOT ) was established. It was sole supplier of domestic and long-distance service that would be its ain regulator.

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In 1986, two government-owned companies were created:

Videsh Sanchar Nigam Limited ( VSNL ) for international telecommunications

Mahanagar Telephone Nigam Limited ( MTNL ) for service in metropolitan countries.

In 1990s, telecom sector benefited from general opening up of the economic system ( the LPG reforms of 1991 ) . Some cardinal developments in the sector include:

National Telecom Policy ( NTP ) 1994 was the first effort to give comprehensive roadmap for the Indian telecom sector.

In 1997, Telecom Regulatory Authority of India ( TRAI ) was created. TRAI was formed to move as a regulator to prolong the growing of the telecom sector.

New National Telecom Policy was adopted in 1999 and cellular services were besides established in the same twelvemonth.


The Indian Telecommunications is the 3rd largest in the universe and the 2nd largest among the Asiatic states. Today, it is the fastest turning market in the universe. As per Telecom Regulatory Authority of India ( TRAI ) information, the entire telecom endorsers in India ( GSM + CDMA + Wire-line ) at the terminal of August, 2012 rose to 960.9 million as compared to 926.53 million in December, 2011.

Indian telecommunication sector has underwent a major procedure of transmutation through important policy reforms, get downing with the proclamation of NTP ( National Telecom Policy ) 1994 and was later re-emphasized and continued under NTP ( New Telecom Policy ) 1999. Get downing from telegraphic and telephonic systems in the nineteenth century, the field of telephonic communicating has now expanded to do usage of advanced engineerings like GSM, CDMA, and WLL to the great 3G Technology in nomadic phones. It has achieved great growing during the last few old ages and is maintained to take a large spring in the hereafter besides.


In 1985, ( DOT ) Department of Telecommunications was established. It was sole supplier of domestic and long-distance service that would be its ain regulator.

The Telecom Regulatory Authority of India ( TRAI ) was established with consequence from 20th February 1997 by an Act of Parliament, called the Telecom Regulatory Authority of India Act, 1997, to modulate telecom services, including fixation/revision of duties for telecom services which were earlier vested in the Cardinal Government.

The Telecom Regulatory AuthorityA of India Act, 1997 was amended by the Telecom Regulatory Authority of India Act, 2000.A The amendments were brought approximately to take certain troubles that had arisen in execution of the Act.A The coveted aims of conveying about functional lucidity, beef uping the regulative model and the differences colony mechanism were attained by conveying about a clear differentiation between the recommendatory and regulative maps ofA Telecom Regulatory Authority of India ( TRAI ) by doing it compulsory for Government to seek recommendations of TRAI in regard of specified affairs and by the puting up of a separate difference colony mechanism.

Role of TRAI

The chief aim of TRAI is to supply a transparent policy environment which playing field and facilitates just competition. For this nonsubjective TRAI has issued from clip to clip a big figure of ordinances, orders and directives to cover with issues coming before it. The waies, orders and ordinances issued cover a broad scope of topics including duty, interconnectedness and every bit good as administration of the Authority.

The mission of Telecom Regulatory Authority of India ( TRAI ) is to guarantee that the involvements of consumers are protected and at the same clip to foster conditions for growing of telecommunications, broadcast medium and overseas telegram services in a mode and at a gait which will enable India to play a prima function in the emerging planetary information society.

The maps of TRAI can be loosely divided into two parts

Compulsory maps

Duty policies

Interconnection policies

Quality of Service

Ensure execution of footings and conditions of licence

Recommendatory maps

New licence policies

Spectrum policies

Opening of sector

Role of the Government

The authorities has taken many enterprises proactively to ease the rapid growing of the Indian telecom industry.

FDI in telecom services has been raised to 74 % .

Introduction of incorporate entree licensing for telecom services on a pan-India footing.

Under the Bharat Nirman programme, a plan of linking 66,822 exposed small towns is being implemented by authorities. The authorities will put US $ 2 billion to get down 112,000 community service Centres in rural India to supply broadband connectivity in 2008-09

The Department of Telecommunications ( DoT ) has stated that foreign telecom companies can offer for 3G spectrum without partnering with Indian companies. They need to use for incorporate entree service license ( UASL ) after winning a command and spouse with an Indian company in conformity with the FDI ordinances.

TRAI ‘s function is to supervise the telecom sector suppliers and to look into if they are following the policies and ordinances issued by DoT.

New Technologies

1. 3G ( Third coevals engineering ) : The Indian authorities programs create a competitory environment to offer better services to clients. It is traveling to make this by auctioning the spectrum for 3G services by ask foring commands from foreign every bit good as domestic participants. Therefore, the 3G spectrum is one of the major growing drivers and investing chances of the telecom industry.

The huge potency for 3G is reflected by the 30-40 per centum one-year growing in Value- Added Services.

Cell phone makers are endeavoring to develop 3G French telephones for the Indian market priced at USD 100..

2. WiMAX ( World-wide Interoperability for micro-wave Access ) : WiMax is been one of the most of import developments in wireless communicating in the recent yesteryear. This manner of communicating gives web entree even in unaccessible locations at a velocity of more than 4 Mbps, hence it is a major factor in driving telecom services in India, particularly wireless services. It will besides take to the increased usage of telecom services, value-added services, cyberspace and endeavor services. WiMAX is traveling to speed up economic growing and aid in supplying better amusement, health care and instruction services.

aˆ? It is estimated that India will hold 13 million WiMAX endorsers by 2012.

aˆ? Aircel is the innovator in WiMAX engineering in India.

aˆ? BSNL, aims to link 74,000 small towns through WiMAX.

3. Mobile figure portability: It is a criterion where a client want to port his/her figure is required to reach the Donor to obtain a Port Authorisation Code ( PAC ) which he/she so has to give to the Recipient.

4. Infrastructure sharing: To cut down their web deployment costs, many service suppliers are looking into substructure sharing. It offers the undermentioned advantages:

aˆ? Better service quality

aˆ? More affordability for clients

aˆ? Quicker axial rotation out of services in rural and distant countries

aˆ? Significant lowering in initial set up costs

aˆ? Reduction in operating costs for service suppliers

aˆ? Increased environmental aesthetics

5. Value Added Services ( VAS ) : In 2006-07, the VAS industry was deserving USD 632 million. The industry is estimated to turn by 60 % in 2007-08. The VAS industry in India is presently concentrating largely on the amusement sector, like the Indian movie industry and cricket. However, there is range for growing in many other countries of utility-based services, such as nomadic minutess and location information.



Large client base in the radio section: As on 31st August 2012, the following information was obtained about Telecom subscription:

The figure of telephone endorsers in India increased from 861.48 Million in July, 2011 to 951.34 Million at the terminal of August, 2012.

There were 91.02 Million new add-ons in the radio section

Growth rate is 1.04 %

Decline in Duties: There has been a significant diminution in duties over the old ages ( a comparing between monetary values in 1999 and present monetary values ) :

Local call duty for Mobile which used to be @ Rs 15.00 in 1999 is now less than Re 1.00 ( most of the instances 1p/sec )

One minute STD call between Delhi and Mumbai at the rate of Rs.37.00 now cost merely Re 1.00 ( or even every bit low as 1.2/sec with particular duties )

ISD call to American continent which was @ Rs. 75.00 now costs less than Rs 5.00

The ground service suppliers have been able to cut down duties well is because of the acceptance of new engineering.

Considerable take downing down of the costs and easiness for the clients in the nomadic figure portability engineering.


Weak Infrastructure – Service suppliers have to incur immense initial fixed costs to put up the needed substructure.

Limited spectrum handiness: The demand for spectrum has increased with the figure of private enterprises increasing in telecom and broadcast service proviso. Digital engineering has created new countries of service proviso and provided more range of applications. Cell phones and wireless Internet are illustrations of such services. Despite technological alterations that increased the demand for spectrum, handiness of spectrum is still a restraint. Regulative bureaus frequently use auctions in order to apportion spectrum amongst viing service suppliers. Spectrum auctions guarantee efficient use from the regulative and policy position as auctions allocate it to those entities that value it most, while bring forthing grosss for authoritiess at the same clip. But auctions sometimes lead to unexpected results. For illustration, auctions may be ill designed or when regulative bureaus have deficient market information, there may non be a lucifer between expected and existent bidder behavior. The cardinal challenge for regulative bureaus is to plan auctions in such a manner as to run into the aim of the furthering competition while guaranting that bidders can efficaciously utilize the spectrum for their concern at the same clip.

Indian companies do non hold the expertness in running multi-country operations


Emerging Technologies such as 3G, WiMax give a immense range for betterment and investing

Rural telephone: Harmonizing to estimations, out of the following 250 million people expected to travel mobile ; at least 100 million will come from rural countries. The nomadic incursion in rural countries is highest in Punjab ( 20.69 per cent ) , followed by Himachal Pradesh ( 17.09 per cent ) , Kerala ( 10.63 per cent ) and Haryana ( 10.20 per cent ) .

World ‘s largest untapped nomadic market: Although the telecom sector in India is turning strong compared to other sectors, from a world-wide position India is the largest untapped Mobile market.

Enormous potency in VAS: There is a batch of growing potency in the value added services ( VAS ) . The incursion of GPRS enabled French telephones are close to 26 % in India as against 99 % in South Korea and 76 % in Japan. Consumers today use more of text based services than the web based applications. Hence, for MVAS to be able to make its full potency the French telephone makers will hold to look at ways to fabricate GPRS enabled phones which are low-cost and user friendly at the same clip. They besides need to increase its consciousness and educate the consumers on how to utilize GPRS.

New participants and services bring in immense investings

Tier-2, tier-3 metropoliss can suit more participants


1. Problems between DoT and TRAI: The deficiency of presence of clear separations in DoT ‘s duties for policy, operations and ordinance led to several holds and lowered the credibleness of the authorities. TRAI had antecedently told Department of Telecommunication that 3G auction should be restricted to bing operators because new participants would happen it hard to turn over out services rapidly. TRAI had claimed that the bing participants were better placed to turn over out 3G services at low-cost rates given that they already had a full fledged operations running.

Wire line endorser base declined by 1.16 million ( 31.01 m in July2009 – 32.17 m August,2012 )

Integration during Mergers is disputing for telecom companies

Unhealthy Competition: MTNL refused to let its spectrum to be used by other service suppliers for about 2-3 old ages. It eventually came to a via media in 2001.

Plague Analysis

Political Factors

The authorities intervenes in the anti-trust ordinances, Environmental factors, revenue enhancement policy, revenue enhancement Torahs, protection Torahs as it has regulators like DOT, TRAI and TDSAT.

The authorities besides regulates the foreign trade ordinances, particular inducements, attitudes towards foreign companies. Stability of authorities is found in telecom industry.

Political Resistance to engagement by the private participants

Govt support to advance FDI in Telecom sector

Banning of Phone Use in Certain Fortunes

Economic Factors

Cost of calls Bing Driven Down

Worldwide Recession- Both Boon & A ; Bane

Middle category consumer base turning due to accelerated economic growing

Untapped markets in emerging Economies ( a new chance )

Social Cultural Factors

High End Telephones going position symbol

Due to Intimate household adhering in Indian Culture, there is demand to stay affiliated

Tech Savvy Generation

Technological Factors

Equipped with New Technology

Rapid Industrial growing rate induced by emerging engineerings.

Strong Fibre Optic Network

Utiilization of E- Commerce installations

Efficient Customer Care Services


Porters_five_forcesThreats of new entrants: Low

There is diminution in mean Revenue Per User.

Brand pull exists to some extent for trade names like Airtel / Idea/ Vodafone.

Highly high substructure apparatus costs

The Spectrum License cost is high as it is done in signifier of auctions.

Established trade name image, Reliability of web

Menaces of replacements: Moderate

Some of the Substitutes are VOIP like Skype, Viber, Watsapp, Email and Satellite phones.

None of the above a major menace in current scenario, but a possible menace for close hereafter.

Power of purchasers: Moderate to high

Large figure of service suppliers, hence, increasing the figure of available picks.

Customer is monetary value medium.

Low shift costs ( figure portability )

Rivalry among bing houses within an industry: High

High Exit Barriers

High Fixed Cost

6-7 participants in each part

Monetary value wars