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  • Telecom Regulatory Authority of India

    Telecom Regulatory Authority of India Mahanagar Doorsanchar Bhawan, Jawaharlal Nehru Marg, (Old Minto Road), New Delhi - 110 002

    Telecom Sector in India: A Decadal Profile

    Telecom Sector in India: A

    D ecadal P

    rofile

  • Telecom Regulatory Authority of India

    Telecom Sector in India: A Decadal Profile

    Telecom Regulatory Authority of India Mahanagar Doorsanchar Bhawan, Jawaharlal Nehru Marg,

    (Old Minto Road), New Delhi - 110 002

  • ii | Telecom Sector in India: A Decadal Profile

    © Telecom Regulatory Authority of India, 2012

    All rights reserved, no part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording and/or otherwise, without the prior written permission of the Telecom Regulatory Authority of India, New Delhi.

    Prepared at the behest of Telecom Regulatory Authority of India by National Council of Applied Economic Research, Parisila Bhawan, 11, Indraprastha Estate, New Delhi–110 002

  • Telecom Sector in India: A Decadal Profile | iii

  • iv | Telecom Sector in India: A Decadal Profile

  • CONTeNTS

    Foreword iii List of Tables vii List of Figures ix List of Boxes x Executive Summary xi

    1 Introduction 1 1.1 Backdrop 1 1.2 Brief Overview of the Telecommunications Sector 1 1.3 Importance of the Telecommunications Sector 3

    2 Trends in the Telecommunications Sector 5 2.1 Introduction 5 2.2 International Comparisons 5 2.3 Growth of Telecommunication Services in India 9 2.4 Regional Variations 39 2.5 Trends in Telecommunication Manufacturing 46 2.6 Conclusion 48

    3 evolution of Telecom Regulation 49 3.1 National Telecom Policy (NTP), 1994 49 3.2 New Telecom Policy (NTP), 1999 50 3.3 Institutional Framework for Telecom Policy

    Regulation in India 50 3.4 Licensing Framework 52

    3.5 Spectrum Management 53 3.6 Recommendations made by TRAI 55 3.7 Regulatory Timeline 55

    4 Investment 59 4.1 Introduction 59 4.2 Total Investment 59 4.3 Foreign Direct Investment (FDI) 62 4.4 Conclusion 69

    5 Socioeconomic Impact 71 5.1 Introduction 71 5.2 Macro Impact 71 5.3 ICT and Economic Development 74 5.4. Micro Studies on the Impact of ICT 75 5.5 Individual Sections of Society 80 5.6 Applications of Technology 86 5.7 Conclusion 96

    6 Conclusions 97 6.1 Introduction 97 6.2 Challenges and Suggested Policies 97 6.3 Other Challenges 99

    Appendix 101 Abbreviations 105

  • vi | Telecom Sector in India: A Decadal Profile

  • Telecom Sector in India: A Decadal Profile | vii

    LIST Of TABLeS

    1.1 Snapshot of the Telecommunications Sector 1

    2.1 Estimates of Share of Expenditure on Mobile Phones 14

    2.2 PCO and VPT, March 2000–December 2011 (million) 21

    2.3 Number of Subscribers for Other Value Added Services, March 2000– December 2011 (million) 21

    2.4 Market Share of Leading ISPs in Terms of Subscribers, December 2011 24

    2.5 Sector-wise EBITDA, PBIT, PBT (Rs crore) 29

    2.6 Sector-wise Profitability Ratios (%) 29

    2.7 Composition of Revenue, December 2011 (%) 30

    2.8 Quality of Service Performance of Wireless Service Providers, December 2011 33

    2.9 Quality of Service Performance of Wireline Service Providers, December 2011 35

    2.10 Parameter-wise Status of QoS Benchmarks for Broadband Service, December 2011 37

    2.11 Service Area-wise Teledensity, December 2011 40

    2.12 Mobile Ownership by Households 41

    2.13 State-wise Broadband Subscribers as on March 31, 2011 43

    2.14 e-Readiness Index 43

    2.15 Universal Service Obligation Fund Position (Rs crore) 46

    2.16 Telecom Equipment Manufacturing in India (Rs crore) 47

    2.17 Revenue of Top 10 Telecom Equipment Players (Rs crore) 48

    3.1 Regulatory Reforms 56

    4.1 Total Plan Outlay and Outlay for Communications in Five Year Plans (Rs crore) 59

    4.2 Foreign Direct Investment Policy 63

    4.3 FDI in Telecommunications Sector: April 2000–August 2010 66

    5.1 Summary of ICT4D Phases 74

    5.2 Mobile Information Services for Farmers 77

    5.3 Status of Women 83

    5.4 Increased Use of Mobile Devices (%) 86

    5.5 Bandwidth Required for Various Applications 87

    5.6 Super Specialty Consultations 90

    5.7 Some Applications with Mobile Governance 91

  • viii | Telecom Sector in India: A Decadal Profile

  • Telecom Sector in India: A Decadal Profile | ix

    LIST Of fIguReS

    1.1 Share of Telecommunications as per cent of

    GDP, 2000–01 to 2009–10 2

    2.1 India’s Position in Telephone Subscriptions 6

    2.2 India’s Position in Mobile Cellular Prepaid Tariffs (US$ per month), 2008 7

    2.3 Internet Users in India and in the World, 2010 8

    2.4 India’s Position in Fixed Internet Subscriptions in the World, 2010 9

    2.5 Total Number of Telephone Subscribers in India, 1981–2011 (million) 10

    2.6 Total Number of Wireline Subscribers and Growth Rate in India, 1981–2011 11

    2.7 Total Number of Wireless Subscribers and Growth Rate in India, 1996–2011 11

    2.8 Teledensity, March 2000–February 2012 14

    2.9 Mobile Phone Prices in India 16

    2.10 Internet Subscriptions and Growth Rate, March 2000–December 2011 16

    2.11 Wireless Subscribers Capable of Accessing Data Services/Internet March 2007– December 2011 17

    2.12 Market Share of Internet Access Technologies including Broadband, December 2011 17

    2.13 Broadband Access, Technologies and Market Share, December 2011 18

    2.14 Public–Private Wireline Subscriptions, March 2000–December 2011 (million) 22

    2.15A Share of Service Provider in Wireline Subscriptions, 2001 (%) 22

    2.15B Share of Service Provider in Wireline Subscriptions, December 2011 (%) 22

    2.16 Share of Service Provider in Wireless Subscriptions, February 2012 (%) 23

    2.17 Share of Service Provider in Wireless Subscriptions based on GSM, December 2011 (%) 23

    2.18 Share of Service Provider in Wireless Subscriptions based on CDMA, December 2011 (%) 23

    2.19 Service Provider-wise Details of Data Services, December 2011 (%) 24

    2.20A Service Provider-wise Shares in PCO, December 2011 24

    2.20B Service Provider-wise Shares in VPT, December 2011 24

    2.21 Market Share of PMRTS Providers (%) 25

    2.22 Market Share of VSAT Service Providers (%) 25

    2.23 Average Outgo* per Outgoing per Minute (Rs per minute) for Postpaid, Prepaid and Blended (GSM and CDMA), 2007–11 26

    2.24A Telecom Sector Revenue, 2005–06 to 2010–11 (Rs crore) 28

    2.24B Telecom Sector Revenue, 2005–06 and 2010–11 (Rs crore) 28

    2.25 ARPU and MoU for Wireless Subscribers, 2000–01 to 2010–11 30

  • x | Telecom Sector in India: A Decadal Profile

    2.26 Revenue of Internet Service Providers, June 2008–December 2011 31

    2.27 Minutes of Usage per Subscriber per Month of Dial-Up Access, 2005–06 to 2010–11 31

    2.28 Total Duration of Usage for Internet Telephony, 2004–05 to 2010–11 (million minutes) 32

    2.29 Quality of Services for Wireless, 2003–10 33

    2.30 Average of Percentage of Calls Answered by the Wireline Operators (Voice-to-Voice) within 60 Seconds across States, 2006–10 35

    2.31 Percentage of Village Panchayats having Broadband, March 2011 42

    4.1 Public and Private Sector Live Projects, 2001–11 (Rs crore) 62

    4.2 FDI in Telecom Sector (Rs crore) and Growth Rate of FDI in Telecom, 2000–01 to 2011–12 64

    4.3 Share of FDI in Telecom Sector as Percentage of Total FDI, 2000–01 to 2011–12 65

    4.4 Sector-wise FDI Inflows: April 2000– August 2010 65

    4.5 FDI in Telecommunications (Rs crore) and Wireless Subscribers (million), 2000–01 to 2011–12 67

    4.6 FDI in Telecommunications (Rs crore) and ARPU Rs per minute (GSM), 2000–01 to 2011–12 68

    4.7 FDI and Gross Revenue in Telecommunications Sector (Rs crore), 2000–01 to 2010–11 68

    4.8 FDI Inflow, Exports and Imports in Telecommunications Sector (Rs crore), 2000–01 to 2010–11 69

    5.1 Relationship between Economic Growth and Telecom Services: 2008 71

    5.2 Total Teledensity ( June 30, 2010) and Share of GSDP as a percentage of Indian GDP (2008–09) 73

    5.3 Factors Influencing Tele-health Utilisation in Developing Countries 89

    5.4 Diagrammatic Representation of the Process of Transfer of Funds 94

    2.1 The Budget Telecom Network Model 7

    2.2 Global System for Mobile Communication (GSM) 12

    2.3 Code Division Multiple Access (CDMA) 13

    2.4 Broadband Technologies 18

    2.5 Competition in the Telecommunications Sector 27

    2.6 USOF Schemes Currently Undertaken 45

    4.1 Capital Employed, Return on Capital Employed and Capital Investment (Gross Block) in the Telecom Services Sector 60

    LIST Of BOxeS

    4.2 The Impact of the Crisis on Foreign Direct Investment in Telecommunications 64

    5.1 Rural Initiatives in ICT 76

    5.2 Impact of Information 78

    5.3 Technology Helps Deliver a Big Catch: Taking a Chance on New Information 79

    5.4 BPO Opportunities for Rural Women in India: The Case of Source for Change 81

    5.5 Improvement in Prod