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BEACON

SECTOR
SPECIAL

Telecom
Sector
Analysis

RSDT

What is
Telecom?
The
explosion
in
technology,
which
ushered
in
the
information age, has
become the basis for
defining power in the
modern world. It is a
widely accepted fact that
no modern economy can
thrive
without
an
integral
telecommunications
infrastructure.

Most countries have their


own
agencies
that
enforce
telecommunications
regulations formulated
by their governments. In
India, it is the Telecom
Regulatory Authority of
India (TRAI).

rom time immemorial, information and communications

have always formed the basis of human existence. This fact has
driven humans to continuously seek ways to improve the
processing of information and the communication of such
information to one another, irrespective of distance and on a
real time basis. The explosion in technology, which ushered in
the information age, has become the basis for defining power
in the modern world. It is a widely accepted fact that no
modern economy can thrive without an integral
telecommunications infrastructure.
Telecommunications, called telecom in short, is the exchange
of information over significant distances by electronic means.
A complete, single telecommunications circuit consists of two
stations, each equipped with a transmitter and a receiver. The
medium of signal transmission can be electrical wire or cable
(also known as "copper"), optical fiber or electromagnetic
fields. The free-space transmission and reception of data by
means of electromagnetic fields is called wireless.
The simplest form of telecommunications takes place between
two stations. However, it is common for multiple transmitting
and receiving stations to exchange data among themselves.
Such an arrangement is called a telecommunications network.
The Internet is the largest example. On a smaller scale,
examples include:
Corporate and academic wide-area networks (WANs)
Telephone networks
Taxicab dispatch networks
Groups of amateur radio operators
The value of products and services is increasingly a function
of their information content and the knowledge used to
produce them rather than the raw material content.
Consequently, the ability to easily access and share
information and stimulate the creation of new ideas is viewed
as essential to maintaining a strong economy and enhancing
the quality of life of every citizen. Access to
telecommunications is critical to the development of all
aspects of a nations economy including manufacturing.
Telecommunications and broadcasting worldwide are
overseen by the International Telecommunication Union
(ITU), an agency of the United Nations (UN) with headquarters
in Geneva, Switzerland. Most countries have their own
agencies that enforce telecommunications regulations
formulated by their governments. In India, it is the Telecom
Regulatory Authority of India (TRAI).
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RSDT
Beacon Sector Special

Importance
of Telecom:

The telecommunications sector is primarily subdivided into


two segments:

Advances in digital and


IP
networking
technologies have had a
dramatic effect on the
demand for better, faster
and more bandwidth for
telecommunications to
serve economies and
communities the world
over.

The telecommunications industry covers a number of areas


including cabling, wireless, switching, transmission, RF (Radio
Frequency) and optical communications, media and IP
(Internet Protocol) networks. The emphasis in India, however,
is more on the technologies like GSM (Global System for
Mobile Communication), CDMA (Code Division Multiple
Access), WLL (Wireless Local Loop), fixed line etc. Advances in
digital and IP networking technologies have had a dramatic
effect on the demand for better, faster and more bandwidth for
telecommunications to serve economies and communities the
world over.

a) Fixed Service providers (FSP)


b) Cellular Services

Some of the significant features of the telecom industry are:


The
use
of
telecommunications in
the
production
and
marketing of goods and
services is ubiquitous.
For many companies,
telecommunications has
become an integral part
of the production process
and is itself becoming
part of the product firms
supply either as a valueadded service or as part
of the product itself.

1. Telecommunications has evolved as a basic


infrastructure - like electricity, roads, water etc. - and
has also emerged as one of the critical components of
economic growth required for overall socio-economic
development of the country
2. Telecommunications industry is no longer technologycentric but revolves more around customer
relationship and tackling cutthroat competition
3. Mammoth investments in the telecom industry are
churning out profit-margins and making intelligent
decision-making critical
Some of the after effects of the telecom revolution include:
1. Escalation in use of social networking applications
such as Facebook, wiki and twitter
2. Creation of smart homes and home integration
technologies: proliferation of home networks, home
entertainment and smart home technologies
3. Increase in use of IP technologies such as VoIP, IPTV
and smart phones
4. Superior and more advanced broadband networks
that are helping in boosting the world economy
through eHealth, eEducation, eTravel and hospitality
5. New approaches to media distribution through the
internet
6. The switchover to the new digital economy

RSDT
Beacon Sector Special

Different
Sectors in
Telecom

The telecom industry can be broadly classified into the


following sub sets:
Telecom Infrastructure Companies: Bharti Infratel, BSNL
Telecom Tower Infrastructure, GTL Infrastructure, Idea
Telecom Infrastructure, India Telecom Infra Ltd, Indus Towers
Ltd, Reliance Infratel, Viom Networks Ltd etc.
Network Equipment Manufacturer and Service Provider
Companies: Ericson, Nokia Solutions and Networks, Huawei,
ZTE, Alcatel Lucent, Cisco, Juniper etc.
Telecom Operator Companies: Bharti Airtel, Vodafone,
BSNL, Idea Cellular, Tata Docomo, Aircel Cellular etc.
Telecom Solution providers: Tech Mahindra, Aricent
Technologies, Sasken, Wipro, IBM India etc.

Overview
of the
Telecom
Industry
A). Global Outlook
4G customers are likely
to
generate
higher
Average Revenue per
User (ARPU) than 3G
customers.
There are about 6.9
billion
mobile
connections
globally,
which are growing at an
annual rate of 7.36%.

Globally, the telecom industry is in the midst of a


transformational shift, driven by a huge surge in data traffic on
telecom networks. A number of mobile operators are rolling
out 4G networks across the globe. A number of wireline
operators are rolling out Fiber to the home, providing
enormous bandwidth up to 100 Mbps to the subscribers. Users
will be able to gravitate to fastest, most reliable and best
priced wireless networks available. The migration of speed
seeking data users to 4G may be accompanied by a rise in
volume of voice calls on legacy 2G and 3G networks. Operators
are offering very competitive tariffs to encourage more of their
subscriber base to use mobile data services. 4G customers are
likely to generate higher Average Revenue Per User (ARPU)
than 3G customers.
There are about 6.9 billion mobile connections globally, which
are growing at an annual rate of 7.36%. The ARPU is stagnating
to around $24.6 while Minutes of Use (MoU) show an upward
trend around 296 per connection. 4G had only 2.85% of the
world market penetration at the end of 2013 while 3G had that
of 28.45%.
Globally, the governments are making more spectrum
available to exacerbate the spectrum shortage. Looking ahead,
the rollout of new 4G mobile broadband networks will fuel
continued wireless growth. Cloud computing will continue to
emerge in both consumer and enterprise markets, and
business customers in particular will continue to use this
technology to expand their capabilities beyond the desktop
computer. Emerging markets such as China, India and Latin
America are expected to see strong growth.

RSDT
Beacon Sector Special

Global Telecom Data:


Data under consideration
Total Number of Mobile
Connections (Aug 2014)
Number of Unique Mobile
Subscribers (Aug 2014)
Total Revenue per year (FY
2013)
ARPU per month (FY 2013)

Statistic
7,102,975,000
3,612,995,000
$1.13 Trillion USD
$12.5 USD
Source: GSMA Intelligence

Top 10 Telecom Companies in the world (2014)


775.6

800

Number of Subscribers (in million)

700
600
500

419.4

400
300
200

185

209

285.7 275.2
254.7 269.9
239.7
231.5

100
0

Name of the Company

B). Domestic Outlook


The number of telephone
subscribers in India
increased from 915.19
million at the end of
December,
2013
to
922.04 million at the end
of January, 2014, thereby
showing
a
monthly
growth of 0.75%.

The Indian Telecommunications industry is one of the fastest


growing in the world. Government policies and regulatory
framework implemented by TRAI (Telecom Regulatory
Authority of India) have provided conducive environment for
service providers. This has made the sector more competitive,
while enhancing the accessibility of telecommunication
services at affordable tariffs to the consumers. Teledensity is
the number of telephone connections for every 100
individuals living within an area.
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RSDT
Beacon Sector Special

The share of urban


subscribers has declined
from 60.03% to 59.86%
whereas share of rural
subscribers
has
increased from 39.97%
to 40.14% in the month
of January, 2014. With
this,
the
overall
Teledensity in India
increased from 74.02 at
the end of December,
2013 to 74.50 at the end
of January, 2014.

A teledensity greater than 100 means there are more


telephones than people.
The number of telephone subscribers in India increased
from 915.19 million at the end of December, 2013 to 922.04
million at the end of January, 2014, thereby showing a
monthly growth of 0.75%. The share of urban subscribers
has declined from 60.03% to 59.86% whereas share of
rural subscribers has increased from 39.97% to 40.14% in
the month of January, 2014. With this, the overall
Teledensity in India increased from 74.02 at the end of
December, 2013 to 74.50 at the end of January, 2014.

Overall Teledensity (Circle/Statewise), as on May 31, 2014


Delhi

227.59

Tamil Nadu

112.09

Punjab

106.67

Himachal Pradesh

106.36

Kerala

94.68

Karnataka

92.19

Maharashtra

91.01

Gujarat

90.32

Haryana

80.19

Andhra Pradesh

79.44

Rajasthan

75.94

North East

70.77

West Bengal

70.65

J&K

68.7

Odisha

61.66

Uttar Pradesh

58.05

Madhya Pradesh

56.63

Assam

49.33

Bihar

46.76

Total (All India)

75.51
0

50

100

150

200

250

Source: TRAI Report 2014

RSDT
Beacon Sector Special

Key
Performance
Indicators
(KPIs)
The
Indian
Telecommunications
industry is one of the
fastest growing in the
world.
Government
policies and regulatory
framework implemented
by
TRAI
(Telecom
Regulatory Authority of
India)
have
provided
conducive
environment
for service providers.

Data on Telecom Subscribers (Wireless + Wireline) as on March 31, 2014


Data under consideration
Total Subscribers
% change over the previous year
Urban Subscribers
Rural Subscribers
Market share of Private Operators
Market share of PSU Operators
Teledensity
Urban Teledensity
Rural Teledensity

Statistic
933.01 million
3.89%
555.28 million
377.73 million
87.13%
12.87%
75.23
145.78
43.96
Source: TRAI Report (Mar 31, 2014)

Data on Wireless Subscribers as on March 31, 2014


Data under consideration
Total Wireless Subscribers
% change over the previous year
Urban Subscribers
Rural Subscribers
GSM Subscribers
CDMA Subscribers
Market share of Private Operators
Market share of PSU Operators
Teledensity
Urban Teledensity
Rural Teledensity

Statistic
904.51 million
4.23%
532.73 million
371.78 million
847.41 Million
57.10 Million
89.16%
10.84%
72.94
139.86
43.27
Source: TRAI Report (Mar 31, 2014)

Service Provider Wise Market Share of Wireless Subscribers, as on


March 31, 2014 (in %)
0.37
0.59

0.31

1.00

6.92

4.16

0.25

22.88

7.92
10.07
18.49

11.90
15.13

Bharti

Vodafone

Idea

Reliance

BSNL

Aircel

Tata

Telewings

Sistema

Videocon

MTNL

Loop

Quadrant
Source: TRAI Report (Mar 31, 2014)

RSDT
Beacon Sector Special

Bharti Airtel has the


highest market share of
wireless subscribers, at
22.88%. Players from the
private sector greatly
dominate the sector with a
market share of 89.56%,
while players from the
public sector total a
market share of 10.44%.

Service Provider Wise Market Share of Wireline Subscribers, as on


March 31, 2014
0.76
5.54

0.22

0.20

4.37

11.88
12.53
64.50

BSNL

MTNL

Bharti

Tata

Reliance

Quadrant

Vodafone

Sistema

Source: TRAI Report (Mar 31, 2014)

Data on Wireline Subscribers as on March 31, 2014

However, as far as number


of Wireline subscribers
are concerned, the Public
Sector
companies far
outnumber the private
companies in terms of
market share, with a
77.03% to 22.97%.

Data under consideration


Total Wireline Subscribers
% change over the previous year
Urban Subscribers
Rural Subscribers
Market share of Private Operators
Market share of PSU Operators
Teledensity
Urban Teledensity
Rural Teledensity
No. of Village Public Telephones
(VPT)
No. of Public Call Office (PCO)

Statistic
28.5 million
-5.6%
22.54 million
5.96 million
22.7%
77.3%
2.30
5.92
0.69
588,912
956,988
Source: TRAI Report (Mar 31, 2014)

Composition of Telephone Subscribers in India


2.42%

0.64%

39.85%
57.10%

Urban Wireless Subscribers

Rural Wireless Subscribers

Urban Wireline Subscribers

Rural Wireline Subscribers


Source: TRAI Report (Mar 31, 2014)

RSDT
Beacon Sector Special

The biggest concern for


the Telecom industry,
over the past decade, is
the fall in
Average
Revenue
per
User
(ARPU).
It is one of the Key
Performance Indicators
for the industry.

Data on Internet/ Broadband Subscribers as on March 31, 2014


Data under consideration
Total Internet Subscribers
Narrowband subscribers
Broadband subscribers
Wired Internet Subscribers
Wireless Internet Subscribers

Statistic
251.59 million
190.72 million
60.87 million
18.50 million
233.09 million
Source: TRAI Report (Mar 31, 2014)

Data on Telecom Financial Data (Mar-14)


Data under consideration
Avg. Gross Revenue(GR) during the year
% change in Avg. GR over the previous
year
Avg. Adjusted Gross Revenue (AGR)
during the year
% change in Avg. AGR over the previous
year
Share of Public sector undertakings in
Access AGR
Monthly Average Revenue Per User
(ARPU) for Access Services

Statistic
Rs.58453.635 Crore
11.8%
Rs.39510.465 Crore
16.26%
12.72%
Rs.115
Source: TRAI Report (Mar 31, 2014)

Average Revenue per User (ARPU)

Year
ARPU (INR)

2004
310

2005
398

2006
352

2007
297

2008
239

2009
185

2010
122

2011
98

2012 2013 2014


95.47 111.45 113.44

Source: TRAI Annual Reports

Graph showing the variation in ARPU, for Wireless GSM


Connections during the period 2004 2014
ARPU per month, for Wireless GSM Connection

ARPU (INR)

The table here shows the


varying trend in the
value
of
Average
Revenue
per
User
(ARPU), per subscriber,
for
Wireless
GSM
Connections, during a 10year period (2004
2014)

450
400
350
300
250
200
150
100
50
0
2002

2004

2006

2008
2010
YEAR

2012

2014

2016

Source: TRAI Annual Reports

RSDT
Beacon Sector Special

Regulation
in the
Telecom
Sector
The
Department
of
Telecommunications (DoT)
works under the Ministry of
Communications
and
Information
Technology,
and is responsible for policy
formulation, performance
review,
monitoring,
international cooperation,
research & development.

The
Department
also
allocates frequency and
manages
radio
communications in close
coordination
with
the
International bodies. It is
also
responsible
for
enforcing
wireless
regulatory measures and
monitoring the wireless
transmission of all users in
the country.

A. Regulatory Bodies and their functions:


a) Department of Telecommunications:
The Department of Telecommunications
(DoT) works under the Ministry of
Communications
and
Information
Technology, and is responsible for policy
formulation,
performance
review,
monitoring,
international
cooperation,
research & development. The Department
also allocates frequency and manages radio
communications in close coordination with
the International bodies. It is also responsible
for enforcing wireless regulatory measures
and monitoring the wireless transmission of
all users in the country. The office of
Administrator Universal Service Obligation
(USO) Fund was set up w.e.f. June 1, 2002 for
the purpose of implementation of Universal
Service Support Policy.
After formation of Bharat Sanchar Nigam Ltd
(BSNL) in October 2000, following are the
functions assigned to the DoT under
Government of India (Allocation of Business),
Rules, 1961:
1. Policy formulation, Licensing and
Coordination matters relating to telegraphs,
telephones, wireless, data, facsimile and
telematics services and other like forms of
communications.
2. International cooperation in matters
connected
with
telecommunications
including matters relating to all international
bodies dealing with telecommunications such
as International Telecommunication Union
(ITU), its Radio Regulation Board (RRB),
Radio Communication Sector (ITU-R),
Telecommunication Standardization Sector
(ITU-T), Development Sector (ITU-D),
International Telecommunication Satellite
Organization (INTELSAT), International
Mobile Satellite Organization (INMARSAT)
and Asia Pacific Telecommunication (APT).
3. Promotion of standardization, research and
development in telecommunications.
4. Promotion of private investment in
Telecommunications.
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RSDT
Beacon Sector Special

The DoT works for


promotion
of
standardization,
research
and
development
in
telecommunications and
promotion of private
investment
in
Telecommunications.

Both
the
Telecom
Regulatory Authority of
India
and
Telecom
Disputes Settlement and
Appellate Tribunal are
under the DoT ministry.

5. Financial assistance for the furtherance of


research and study in telecommunications
technology and for building up adequately
trained manpower for telecom programme,
including
(a) Assistance to institutions/ scientific
institutions and to universities for advanced
scientific study and research
(b) Grant of scholarships to students in
educational institutions and other forms of
financial aid to individuals including those
going abroad for studies in the field of
telecommunications.
6. Procurement of stores and equipment
required
by
the
Department
of
Telecommunications.
7. Telecom Commission.
8. Telecom Regulatory Authority of India.
9. Telecom Disputes Settlement and Appellate
Tribunal.
10. Administration of laws with respect to any
of the matters specified in this list, namely:(a) The Indian Telegraph Act, 1885 (13 of
1885);
(b) The Indian Wireless Telegraphy Act, 1933
(17 of 1933) and
(c) The Telecom Regulatory Authority of India
Act, 1997 (24 of 1997).
11. Indian Telephone Industries Limited.
12. Post disinvestments matters relating to
M/s Hindustan Teleprinters Limited.
13. Bharat Sanchar Nigam Limited.
14. Mahanagar Telephone Nigam Limited.
15. Videsh Sanchar Nigam Limited and
Telecommunications Consultants (India)
Limited
16. All matters relating to Centre for
Development of Telematics (C-DOT).
17. Residual work relating to the erstwhile
Department of Telecom Services and
Department of Telecom Operations, including
matters relating to the following: (a) Cadre
controlling functions of Group A and other
categories of personnel till their absorption in
Bharat Sanchar Nigam Limited; (b)
Administration and payment of terminal
benefits.
18. Execution of works, purchase and
acquisition of land debited to the capital
Budget pertaining to telecommunications.
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Beacon Sector Special

The Telecom Regulatory


Authority of India (TRAI)
was thus established
with effect from 20th
February, 1997 by an act
of Parliament, called the
Telecom
Regulatory
Authority of India Act,
1997 to regulate telecom
services,
including
fixation of tariffs for
telecom services which
were earlier vested in the
central government.

b) TRAI (Telecom Regulatory Authority of


India):
The entry of private service providers
brought with it the inevitable need for
government regulation. The Telecom
Regulatory Authority of India (TRAI) was thus
established with effect from 20th February,
1997 by an act of Parliament, called the
Telecom Regulatory Authority of India Act,
1997 to regulate telecom services, including
fixation of tariffs for telecom services which
were earlier vested in the central government.
The TRAI act was amended by an ordinance,
effective from 24th January, 2000 establishing
a Telecommunications Dispute Settlement
and Appellate Tribunal (TDSAT) to take over
the adjudicatory and disputes functions from
TRAI.
c)

Telecom Commission:
The Telecom Commission was set up by the
Government of India in 1989 with
administrative and financial powers of the
Government of India to deal with various
aspects of Telecommunications. The Telecom
Commission is responsible for policy
formulation, licensing, wireless spectrum
management, administrative monitoring of
PSUs, research and development and
standardization.

TDSAT was established


with the view to protect
the interest of the
consumers and service
providers
of
the
telecommunication
sector and also to
encourage and ensure
the growth of the
telecommunication
sector.

d) Telecom Disputes Settlement and Appellate


Tribunal (TDSAT):
TDSAT was set up in May 2000 by the
government of India to adjudicate over
disputes that arise in the telecommunication
sector. TDSAT was established with the view
to protect the interest of the consumers and
service providers of the telecommunication
sector and also to encourage and ensure the
growth of the telecommunication sector. The
chairperson of TDSAT is appointed from the
ranks of chief justice of a High Court or a
Supreme Court judge and holds office for a
period of 3 years. The TDSAT can adjudicate
any disputes that arise between a group of
consumers and service providers, a licensee
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The Uniform Access


Service Licensing Regime
marked the end of
licensing regime in the
Indian Telecom industry.
It eliminated the need for
different licenses for
different services.

and a licensor, and also between two or more


than the service providers. The power and
function of Telecom Disputes Settlement &
Appellate Tribunal includes that it can hear
the appeal and also dispose appeals that are
against any order, direction, or decision of the
TRAI.
B. Reform measures in the Indian Telecom Industry:
a) National Telecom Policy, 1994:
In 1994, the government announced the
National Telecom Policy which defined
certain important objectives including
availability of telephone on demand,
provision of world class services at
reasonable
prices,
improving
Indias
competitiveness in global markets. It also
announced a series of specific targets to be
achieved by 1997.

NTP-99 laid down a clear


roadmap
for
future
reforms, contemplating
the opening up of all the
segments of the telecom
sector for private sector
participation.

b) New Telecom Policy, 1999:


The most important milestone and
instrument of telecom reforms is The New
Telecom Policy, 1999 (NTP 99). It was
approved on 26TH March, 1999. NTP-99 laid
down a clear roadmap for future reforms,
contemplating the opening up of all the
segments of the telecom sector for private
sector participation. It clearly recognized the
need for strengthening the regulatory regime
as well as restructuring the departmental
telecom services to that of a public sector
corporation so as to separate the licensing
and policy functions of the Government from
that of being an operator.
c) Unified Access Service Licensing Regime:
It marked the end of licensing regime in the
Indian Telecom industry. It eliminated the
need for different licenses for different
services. Players were now allowed to offer
both mobile and fixed-line services under a
single license after paying an additional entry
fee. It helped in aligning convergent
technologies and services.
d) Access Deficit Charges (ADC):
ADC makes it mandatory for a service
provider at the callers end to share a percent
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Beacon Sector Special

of the revenue earned with the service


provider at the receivers end in long-distance
telephony. This subsidises the infrastructure
costs of the service provider enabling access
at receivers end, especially because rental for
fixed-line services is low. Revision in the
ADCs is expected to be followed by further
tariff reduction in telecom services.
The Universal Service
Obligation was put in
place to bridge the wide
gap between urban and
rural teledensity.

Availability of affordable
and
effective
communications for the
citizens is at the core of
the vision and goal of the
National Telecom Policy
2012.

e) Universal Service Obligation (USO):


The USO policy was laid to widen the reach of
telephony services in rural India. This system
was put in place to bridge the wide gap
between urban and rural teledensity. All
telecom operators are bound to contribute 5
percent of their revenues to this fund.
Initially, only basic service providers were
under the purview of USO. Later, its scope was
expanded to include mobile services also.
f) National Telecom Policy, 2012:
The primary objective of NTP-2012 is
maximizing public good by making available
affordable,
reliable
and
secure
telecommunication and broadband services
across the entire country. It recognizes the
role of such services in furthering the national
development agenda while enhancing equity
and inclusiveness. Availability of affordable
and effective communications for the citizens
is at the core of the vision and goal of the
National Telecom Policy 2012. NTP-2012
also recognizes the predominant role of the
private sector in this field and the consequent
policy imperative of ensuring continued
viability of service providers in a competitive
environment.
Some major objectives of this policy are as
follows:
i.
Increase rural teledensity from the
current level of around 39 to 70 by the
year 2017 and 100 by the year 2020.
ii.
Provide affordable and reliable
broadband-on-demand by the year
2015 and to achieve 175 million
broadband connections by the year
2017 and 600 million by the year
2020 at minimum 2 Mbps download
speed and making available higher
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NTP, 2012 envisages to


promote
innovation,
indigenous R&D and
manufacturing to serve
domestic and global
markets, by increasing
skills and competencies.

speeds of at least 100 Mbps on demand.


iii.

iv.

v.

vi.

vii.

viii.
NTP 2012 strives to
create One Nation - One
License across services
and service areas.

ix.

x.

Recognize telecom as Infrastructure


Sector to realize true potential of ICT
for development.
Provide high speed and high quality
broadband access to all village
panchayats through a combination of
technologies by the year 2014 and
progressively to all villages and
habitations by 2020.
Promote innovation, indigenous R&D
and manufacturing to serve domestic
and global markets, by increasing
skills and competencies.
Create a corpus to promote
indigenous R&D, IPR creation,
entrepreneurship,
manufacturing,
commercialisation and deployment of
state-of-the-art telecom products and
services during the 12th five year plan
period.
Promote the ecosystem for design,
Research and Development, IPR
creation, testing, standardization and
manufacturing i.e. complete value
chain for domestic production of
telecommunication equipment to
meet Indian telecom sector demand to
the extent of 60% and 80% with a
minimum value addition of 45% and
65% by the year 2017 and 2020
respectively.
Strive to create One Nation - One
License across services and service
areas
Achieve One Nation - Full Mobile
Number Portability and work towards
One Nation - Free Roaming
Make available additional 300 MHz
spectrum for IMT services by the year
2017 and another 200 MHz by 2020

15

RSDT
Beacon Sector Special

FDI in Indian
Telecom
Sector
Investments
via
Automatic route up to
49%
Investments need to be
cleared by FIPB (Foreign
Investment Promotion
Board) beyond 49%

The
report
released
by
DoT
(Department
of
Telecommunications) on 24 Jan, 2014 says thus about the FDI
(Foreign Direct Investment) Policy in the Telecommunications
sector:
Sector/ Activity: Telecom Services (including Telecom
Infrastructure Providers Category I)
All telecom
services including Telecom Infrastructure Providers CategoryI, viz. Basic, Cellular, Unified Access Services, Unified
license(Access
services),Unified
License,
National/
International Long Distance, Commercial V-Sat, Public Mobile
Radio Trunked Services (PMRTS), Global Mobile Personal
Communications Services (GMPCS), All types of ISP licences,
Voice Mail/Audiotex/UMS, Resale of IPLC, Mobile Number
Portability services, Infrastructure Provider Category I
(providing dark fibre, right of way, duct space, tower) except
Other Service Providers.
FDI Cap/ Equity: 100%

Telecom companies like


Vodafone, Telenor and
Sistema are expected to
gain
the
immediate
advantage from this
decision as it gives them
the option to establish
their
wholly-owned
subsidiaries in India and
embark on an aggressive
plan to compete with
domestic companies like
Airtel and Reliance.

Entry Route: Investments via Automatic route up to 49%


Investments need to be cleared by FIPB (Foreign Investment
Promotion Board) beyond 49%
Other Conditions: Investments subject to observance of
licensing and security conditions by licensee as well as
investors,
as
notified
by
the
Department
of
Telecommunications (DoT) from time to time
This policy, brought into effect on 1st August, 2013 has raised
the Foreign Direct Investment (FDI) cap in telecom to 100
percent from the earlier 74 percent.
Analysis A closer look at the decision to allow 100% FDI in
Telecom Sector in India:
Pros:
a) Eliminates the need for a foreign player to partner with
a local telecom company. Hence, the telecom sector can
now attract investments in the range of USD 10 billion
in the near to long term.
b) It is an attempt to rescue the cash-strapped sector. It is
expected to increase the much needed cash-flows for
telecom companies to meet their expansion plans.

16

RSDT
Beacon Sector Special

FDI eliminates the need


for a foreign player to
partner with a local
telecom company. Hence,
the telecom sector can
now attract investments
in the range of USD 10
billion in the near to long
term.

c) The estimates by Cellular Association of India (COAI),


suggests that the industry is marred with a debt of 1.86
Lakh Crore and could only attract less than 9 percent
of the total FDI that came in last twelve years in the
country. And considering this, the move is expected to
act as a catalyst in reducing the debt. It is expected to
open the route for fresh investments and would attract
more overseas investors at a time when operators are
struggling with their Capex-based investments.
d) Help in launching of new technology-based services
viz. 4G and BWA services. This could result in huge
benefits for the customers and higher license fees for
the government.
e) All the security issues seem to be taken into account.
Investments above 49 percent still require a go-ahead
from FIPB (Foreign Investment Promotion Board).
f) Telecom companies like Vodafone, Telenor and
Sistema are expected to gain the immediate advantage
from this decision as it gives them the option to
establish their wholly-owned subsidiaries in India and
embark on an aggressive plan to compete with
domestic companies like Airtel and Reliance.
Cons:

The estimates by Cellular


Association
of
India
(COAI), suggests that the
industry is marred with a
debt of 1.86 Lakh Crore
and could only attract
less than 9 percent of the
total FDI that came in last
twelve years in the
country.

a) Uncertainty about policies - In 2005, India had raised


the FDI in telecom services companies to 74 percent
from 49 percent. However, this was followed by the
cancellation of 122 telecom licenses by the
government, which rocked the industry. This has
raised fears about speculation that nothing in the
Indian context can be taken as guaranteed and the road
is full of surprises, where policies can be tweaked at
any point of time.
b) Just opening up the FDI route is not sufficient and
additional measures - like allowing inter-operator 3G
roaming to accelerating entries of MVNOs (Mobile
Virtual Network Operators) - must be taken to help
India-based players to offset the debt burden they are
pressured with.
c) While the decision needs to be appreciated, a concrete
set of confidence-building measures are required, to
rejuvenate the sector and make it look attractive for
investors.

17

RSDT
Beacon Sector Special

Mergers and
Acquisitions
in the
Telecom
Sector

The telecommunication industry is the fastest growing


industry in almost every country. Both, technology
advancement in the telephony industry in general, and in the
wireless technology in particular, as well as technology
advancement of the Internet contributed the most for the fast
growth of this industry. Telecommunication services
constitute the most natural example of network externalities,
since by definition, the nature of these services involves
communicating with a large number of people.
Mergers and acquisitions in the telecommunication industry
have grown by substantial proportions in India since the
mid-1990s. Economic reforms undertaken in the 1990s in
India opened up the telecom sector which predominantly
used to be a state-controlled one. Private investment in the
telecom sector in India not only facilitated the rapid
expansion of telecom services in the urban, as well as rural
parts of India, but also provided the opportunity for mergers
and acquisitions in this sector.
A. Rationale behind mergers in the Telecommunications
industry:
a. Acquisition
of
licenses
or
geographical territories
b. Acquisition of spectrum
c. Acquisition of telecom infrastructure
and network
d. Acquisition of customer base to
achieve an economic base
e. Acquisition of brand value
f. Higher operating profit (EBITDA)
margin
g. Acquisition of Customer Base

Mergers and acquisitions


in the telecommunication
industry have grown by
substantial proportions in
India since the mid-1990s.
Economic
reforms
undertaken in the 1990s in
India opened up the
telecom sector which
predominantly used to be
a state-controlled one.

B. Instances of Mergers and Acquisitions in


Indian Telecom Space:
The first merger and acquisition deal in the
Indian telecom industry occurred in 1998
between Max Group of Delhi and Hutchison
Group of Hong Kong. 41% of stakes of Orange
services in Mumbai was acquired by
Hutchison from Max for 560 million US
Dollars. In the years that followed several
other mergers and acquisitions took place in
the telecommunications sector in India.
Important ones among them include
a) Acquisition of Command Cellular Services in
Kolkata by Hutchison from Usha Martin in
2000
18

RSDT
Beacon Sector Special

Acquisition of 40.8% in
Spice Telecom by Idea
Cellular for Rs.2720
crores helped Idea gain
entry in the contiguous
wireless markets of
Punjab and Karnataka.

b) Acquisition of 79.24% stakes of Aircel,


Chennai by Sterling group from RPG group for
Rs.210 Crores in 2003
c) Acquisition of 48% stakes in Idea cellular by
Aditya Birla group from the Tata group in
2005
d) Acquisition of Hutch services in India by
Vodafone in 2007
e) Acquisition of 40.8% in Spice Telecom by Idea
Cellular for Rs.2720 crores. This deal helped
Idea gain entry in the contiguous wireless
markets of Punjab and Karnataka, which
account for 11% of Indias total wireless
subscribers. Idea also gained an all-India
subscriber market share, which increased
from 9.5% to 11.1%. Ideas operations in the
900 MHz GSM spectrum band increased from
7 service areas to 9 service areas
f) TT DoCoMo paid 2.7 Billion USD for a 26%
stake in Tata Teleservices. The deal values
Tata Teleservices at $10 billion

19

RSDT
Beacon Sector Special

SWOT
Analysis of
Indian
Telecom
Sector

Strengths:

Huge customer potential


High growth rate
Allowed 100% FDI Limit
High return on investment
Liberalization efforts by government
Lower Capital Expenditure

Weaknesses:

Poor Telecommunication infrastructure


Late adopters of new technology
Most competitive market
Market strongly regulated by government
Market difficult to enter because of
requirement of huge financial resources

Opportunities:
3G, 4G and other Quality
Services, such as Mobile
Number
Portability
(MNP) are a huge
opportunity
for
the
Telecom sector.

3G Telecom Services and 4G Services


More Quality Services, such as Mobile Number
Portability (MNP)
Value Added Services (VAS), such as mobile
banking, mobile ticketing
Boost to Telecom manufacturing companies
Boost to Telecom equipment exports
Horizontal Integration: For example, DTH
services like Reliance BIG TV, Tata SKY by
major telecom operators like Reliance and
Tata
More scope in content-related services, since
the consumer is influenced by local culture

Threats:

Uncertainty
in
governments
telecommunication policies, such as in the 2G
and 3G case
Unclear Taxation Policy regarding the
retrospective taxation clause whether it is
applicable or not (as has happened in
Vodafone Indias Rs.11,200 crore tax liability
dispute)
Declining ARPU (Average Revenue Per User)
Partiality on the part of the government: for
instance, BSNL and MTNL get preference
before auctioning to private sector
Content piracy

20

RSDT
Beacon Sector Special

Emerging
Technologies
in the
Telecom
Sector

According to a release
by
NASDAQ,
consolidation
within
the telecom industry
will continue mainly
due to shortage of
airwaves
and
attainment
of
economies of scale.

1. Mobile payments technology is at a tipping


point and a strong growth is likely on this
front.
2. More and more mobile operators are
deploying emerging technologies such as
HetNets to overcome the spectrum
exhaustion.
3. Mobile capabilities are being extended into
completely new devices, including wearable
technology such as glasses, smart watches
and fitness/health devices. The benefit
derived from relevant features and
functionality, as well as apps, have greatly
improved the value proposition to
consumers, resulting in increased receptivity
in paying more for devices.
4. Mobile Collaboration - Extends the
capabilities of video conferencing for use on
hand-held mobile devices in real-time over
secure networks. It can be used in diverse
industries such as manufacturing, energy, and
healthcare.
5. According to a release by NASDAQ,
consolidation within the telecom industry will
continue mainly due to shortage of airwaves
and attainment of economies of scale.
Innovative product launches are expected in
the areas of m-Commerce, virtualization and
cloud-based technology, high-speed metro
Ethernet, to name a few.
6. Growth of software-defined networking
(SDN) and network function virtualization
(NFV) has encouraged newly emerging digital
media companies to invest heavily in the
telecommunications infrastructure market.
SDN provides customers with increased
bandwidth utilization, higher reliability and
reduced capital spending. NFV is designed to
consolidate and deliver the networking
components needed to support a fully
virtualized infrastructure -- including virtual
servers, storage and even other networks. It
utilizes
standard
IT
virtualization
technologies.

21

RSDT
Beacon Sector Special

Major
players in
the Indian
Telecom
Sector

Bharti Airtel Limited:


Established: 7 July 1995
Founder: Sunil Bharti Mittal
Headquarters: Bharti Crescent, 1, Nelson Mandela
Road, New Delhi, India
Areas served: India & South Asia, Africa, and the
Channel Islands
Key people:
Mr. Sunil Bharti Mittal (Chairman)
Mr. Gopal Vittal (MD & CEO - India and South Asia)
Key snippets:

Airtel operates in 20 countries across South


Asia, Africa, and the Channel Islands.
Airtel has a GSM network in all countries in
which it operates, providing 2G, 3G and 4G
services depending upon the country of
operation.
Airtel ranks among the world's top 4 mobile
service providers by subscribers.
Airtel is the largest cellular service provider in
India and had nearly 287 million subscribers
across its operations by the end of Dec 2013.
Airtel is the second largest in-country mobile
operator by subscriber base, behind China
Mobile.

Key Services:
In India, the company's product offerings include

Airtel is the largest


cellular service provider
in India and had nearly
287 million subscribers
across its operations by
the end of Dec 2013.

2G, 3G and 4G wireless services


mobile commerce
fixed line services
high speed DSL broadband
IPTV
DTH
enterprise services including national &
international long distance services to
carriers

In the rest of the geographies, it offers

2G, 3G wireless services


mobile commerce

22

RSDT
Beacon Sector Special

Airtel operates in 20
countries across South
Asia, Africa, and the
Channel Islands.

Financial Year Ended March 31, 2014

Year
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Total Customer Base (mn)
7.1 11.8 20.9 39 64.3 97.5 137.00 220.80 251.60 271.20 296.00
Mobile Services (mn)
6.5 11.00 19.6 37.1 62.00 94.5 131.3 212.00 241.10 259.80 283.60
Broadband and Telephone Services (mn)
2.7 3.1 3.3 3.30 3.30 3.40
Digital TV Services (mn)
0.4 2.6 5.6 7.20 8.10 9.00
Source: Bharti Airtel Annual Reports

Subscriber Base
300
250

Subscribers (in mn)

200
150
100
50
0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Year
Total Customer Base (mn)

Mobile Services (mn)


Source: Bharti Airtel Annual Reports

Broadband and Digital TV


9

Airtel ranks among the


world's top 4 mobile
service providers by
subscribers.

Subscribers (in mn)

8
7
6
5
4
3
2
1
0
2009

2010

2011

2012

2013

2014

Year
Broadband and Telephone Services (mn)

Digital TV Services (mn)


Source: Bharti Airtel Annual Reports

23

RSDT
Beacon Sector Special

Data revenue for Airtel


rose 38% to $102
million, helped by an
increase in data usage
per customer.

Financial Snapshot (in million rupees) for the year ended March 31, 2014

Year
Revenue
EBITDA
PAT

2004
50369
17055
5837

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
81558 116641 184202 270122 373521 418948 595383 714508 803112 857461
30658 41636 74407 114018 152858 168149 200718 237123 248704 277770
12116 20279 40621 63954 78590 89768 60467 42594 22757 27727
Source: Bharti Airtel Annual Reports

Amount (in mn)

Revenue (in million rupees)


900000
800000
700000
600000
500000
400000
300000
200000
100000
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Year
Revenue
Source: Bharti Airtel Annual Reports

EBITDA (in million rupees)

India is its biggest


market,
contributing
nearly three-fourths of
the overall revenue.

Amount (in mn)

300000
250000
200000
150000
100000
50000
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Year
EBITDA
Source: Bharti Airtel Annual Reports

24

RSDT
Beacon Sector Special

Profit After Tax (in million rupees)


90000
80000
70000

Amount (in mn)

In
February
2014,
Vodafone
acquired
airwaves in 11 circles in
the 900 MHz and 1,800
MHz bands, which will
enable the company to
provide customers with
enhanced mobile voice
and data services across
the country

60000
50000
40000
30000
20000
10000
0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Year
Profit After Tax
Source: Bharti Airtel Annual Reports

Vodafone India Pvt. Ltd.:


Established: 8 May 2007 (when Vodafone acquired the
controlling interest of 67% held by Li Ka Shing Holdings
in Hutch-Essar for US$11.1 billion)
Headquarters: Peninsula Corporate Park, Lower Parel,
Mumbai
Predecessor: Hutchison Essar Limited
Parent: Vodafone Group plc
Areas Served: 21 States and UTs in India
Key People:
Mr. Marten Pieters (CEO)
Mr. Analjit Singh (Non-Executive Chairman and Partner)
Mr. Vittorio A.Colao (Independent Director and CEO of
Vodafone Group)
Vodafone India Limited,
formerly Vodafone Essar
Limited, is the second
largest mobile network
operator in India by
subscriber base.

History:

On 11 February 2007, Vodafone agreed to


acquire the controlling interest of 67% held
by Li Ka Shing Holdings in Hutch-Essar for
US$11.1
billion,
piping
Reliance
Communications, Hinduja Group, and Essar

25

RSDT
Beacon Sector Special

Vodafone boasts of over


120,000 km of fibre, over
100,000 base stations,
3G-ready network and
all-IP Switches

Group, which was the owner of the remaining


33%.
On March 31, 2011, Vodafone Group Plc
announced that it would buy an additional
33% stake in its Indian joint venture for $5
billion after partner Essar Group exercised an
option to sell the holding in the mobile-phone
operator. The deal raised Vodafones stake to
75%.
Essar left the company after it implemented a
put option over 22% of the venture. Vodafone
exercised its call option to buy an 11% stake.
Vodafone acquired the entire indirect interest
held by Analjit Singh and Neelu Analjit Singh
in Vodafone India and the 10.97% stake of
Piramal Enterprises Ltd in Vodafone India for
over Rs.10,000 crore, taking its holding in the
Indian subsidiary to 100%.
In February 2014, Vodafone acquired
airwaves in 11 circles in the 900 MHz and
1,800 MHz bands, which will enable the
company to provide customers with
enhanced mobile voice and data services
across the country

Key Snippets:

Hutchison Essars Cheeka


the
pug
marketing
campaign was a huge
success, and Vodafones
Zoozoos
marketing
campaign was an even
bigger hit.

Vodafone India Limited, formerly Vodafone


Essar Limited, is the second largest mobile
network operator in India by subscriber base.
It had approximately 160 million customers
as of December 2013 (94% of these were
prepaid customers).
Rs.37,606 crore in revenue as of 31 March,
2014
23.4% market share in India as of 31 March,
2014
Vodafone boasts of over 120,000 km of fibre,
over 100,000 base stations, 3G-ready
network and all-IP Switches

Key Services:

Mobile telephony
Wireless broadband
3G
M-pesa

Marketing Campaigns:

Vodafone Zoozoos
BlackBerry Boys

RSDT

26
Beacon Sector Special

Vodafone Indias data


users grew 39% to 52
million from 37.3 million
at the end of the financial
year 2014. Of this, 3G
users increased to 7
million,
more
than
double the 3.3 million 3G
connections reported at
the end of March 2013.

Pug (network campaign)


Chota Recharge
Delights
Made For You campaign

Year
2007 2008 2009 2010 2011 2012 2013 2014
Subscriber (mn) 26.40 44.10 71.50 100.80 134.60 150.50 152.30 169.80
Market Share (%) 21.78 23.85 24.00 23.91 23.63 22.66 23.05 23.40
Source: Vodafone India

No. of subscribers (mn)

Subscribers (mn)
200.00
150.00
100.00
50.00
0.00
2007

2008

2009

2010
2011
Year

2012

2013

2014

Subscriber (mn)
Source: Vodafone India

Market Share (%)


24.00

Vodafone acquired the


entire indirect interest
held by Analjit Singh
and Neelu Analjit Singh
in Vodafone India

Market Share (%)

23.50
23.00
22.50
22.00
21.50
21.00
20.50
2007

2008

2009

2010
2011
Year

2012

2013

2014

Market Share (%)


Source: Vodafone India

27

RSDT
Beacon Sector Special

On 11 February 2007,
Vodafone
agreed
to
acquire the controlling
interest of 67% held by Li
Ka Shing Holdings in
Hutch-Essar for US$11.1
billion

Financial Year Ended March 31, 2014

Year
2009 2010 2011 2012 2013 2014
Revenue (in mn GBP)
2689 3114 3855 4265 4324 4394
EBITDA (in mn GBP)
717 807 985 1122 1240 1397
Adjusted Operating Profit (in mn GBP) -30 -37 15 60 221 354
Source: Vodafone Annual Reports

Revenue (in mn GBP)

Revenue (in mn GBP)


4500
4000
3500
3000
2500
2000
1500
1000
500
0
2009

2010

2011

2012

2013

2014

Year
Revenue (in mn GBP)
Source: Vodafone Annual Reports

EBITDA (in mn GBP)


1400

EBITDA (in mn GBP)

The key performance


indices for the company
showed a significant
improvement
with
minutes of usage per
subscriber rising 2.5%
to 424 minutes from
413.

1200
1000
800
600
400
200
0
2009

2010

2011

2012

2013

2014

Year
EBITDA (in mn GBP)
Source: Vodafone Annual Reports

RSDT

28
Beacon Sector Special

Adjusted Operating Profit (in mn GBP)


400

Adjusted Operating Profit (in mn GBP)

Vodafone
India
Ltd.
reported a 13% rise in
service revenue for the
year ended March to
Rs.37,606 crore from
Rs.33,281 crore reported
last year

350
300
250
200
150
100

50
0
-50

2009

2010

2011

2012

2013

2014

Year
Adjusted Operating Profit (in mn GBP)
Source: Vodafone Annual Reports

For the year ended March 2014,

The company reported


browsing
revenue
at
Rs.3,436.9 crore in the
fiscal, a 72% growth over
last years revenue.

Vodafone India Ltd. reported a 13% rise in service


revenue for the year ended March to Rs.37,606 crore
from Rs.33,281 crore reported last year
The increase is on account of significant customer
additions, higher tariffs, and strong growth in data
revenue
According to the numbers released by the company,
data accounts for 13% of total revenues for the Indian
unit.
Vodafone Indias data users grew 39% to 52 million
from 37.3 million at the end of the financial year 2014.
Of this, 3G users increased to 7 million, more than
double the 3.3 million 3G connections reported at the
end of March 2013.
The company is also seeing an increase in usage with
3G usage per subscriber rising to 679 MB at the end of
March 2014 as compared to 419 MB in the previous
fiscal, a growth of 62%.
The company reported browsing revenue at Rs.3,436.9
crore in the fiscal, a 72% growth over last years
revenue.
The key performance indices for the company also
showed significant improvement with minutes of
usage per subscriber rising 2.5% to 424 minutes from
413. Average revenue per minute for the company
also rose 6.2% to 47 paisa from 44.3 paisa.

RSDT

29
Beacon Sector Special

Idea Cellular is present in


22 service areas, spread
across over 55,000 towns
in India.

Idea Cellular Limited:


Established: 1995 as Birla Communications Limited
Headquarters: Santacruz East, Mumbai
Areas served:

22 service areas, spread across over 55,000 towns in


India
Nearly 4,500 Idea outlets across India

Parent Company: Aditya Birla Group (49.1% stake)


Key people:
Mr. Kumar Mangalam Birla (Chairman)
Mr. Himanshu Kapania (MD)
Mr. Ambrish Jain (Deputy MD)
Key Snippets:

Idea is Indias 3rd largest mobile operator.


Idea ranks among the Top 10 country operators in the
world with a traffic of over 1.5 billion minutes a day.
Ideas customer service delivery platform is ISO
9001:2008 certified, making it the only operator in the
country to have this standard certification for all 22
service areas and the corporate office.
Every 4th mobile user who exercises choice through
MNP (Mobile Number Portability), prefers Idea.
Currently, Aditya Birla Group holds 49.1% of the total
shares and Malaysia- based Axiata controls a 14.99%
stake in the company.

Key Services:

Idea is a pan-India
integrated GSM operator
offering 2G and 3G
services, and has its own
NLD and ILD operations,
and ISP license.

Idea is a pan-India integrated GSM operator offering


2G and 3G services, and has its own NLD and ILD
operations, and ISP license.
It offers a range of high-speed mobile broadband
devices including Android-based 3G smartphones,
dongles etc.
Ideas wide portfolio of 3G smartphones offer the latest
in 3G applications and high-end data services such as
Idea TV, games, social networking etc.
It is the first mobile operator to introduce innovative
value added services in the Indian telephony market.

Year
Subscribers (mn)

2006
14.01

2007
24.00

2008
43.02

2009
63.82

2010
89.50

2011
91.90

2012
113.00

2013 2014
121.60 128.7

Source: Idea Cellular Annual Reports; RSDT

30

RSDT
Beacon Sector Special

Subscribers (mn)
140.00

No. of subscribers (in mn)

Ideas wide portfolio of


3G smartphones offer the
latest in 3G applications
and
high-end
data
services such as Idea TV,
games, social networking
etc.

120.00
100.00
80.00
60.00
40.00
20.00
0.00
2006

2007

2008

2009

2010
Year

2011

2012

2013

2014

Subscribers (mn)
Source: Idea Cellular Annual Reports

Financial Year Ended March 31, 2014

Year
2006 2007 2008 2009 2010 2011 2012 2013
Revenue (in INR mn) 29869.20 43873.20 67374.50 101543.80 124990.20 155032.20 195411.20 224577.00
EBITDA (in INR mn) 10864.40 14861.90 22692.60 28364.40 34590.90 37906.50 50923.80 60046.00
PAT (in INR mn)
2117.60 5022.20 10423.10 8815.80 9539.40 8987.00 7229.90 10109.00
Source: Idea Cellular Annual Reports

Revenue (in INR mn)


250000.00

Revenue (in mn)

200000.00
150000.00

100000.00
50000.00
0.00

Idea is the first mobile


operator to introduce
innovative value added
services in the Indian
telephony market.

2006

2007

2008

2009
2010
Year

2011

2012

2013

Revenue (in INR mn)


Source: Idea Cellular Annual Reports

31

RSDT
Beacon Sector Special

Idea ranks among the


Top
10
country
operators in the world
with a traffic of over 1.5
billion minutes a day.

EBITDA (in INR mn)


70000.00

EBITDA (mn)

60000.00
50000.00
40000.00
30000.00
20000.00
10000.00
0.00
2006

2007

2008

2009
2010
Year

2011

2012

2013

EBITDA (in INR mn)


Source: Idea Cellular Annual Reports

PAT (in INR mn)


12000.00

Profit After Tax (mn)

10000.00
8000.00
6000.00
4000.00
2000.00

Every 4th mobile user


who exercises choice
through MNP (Mobile
Number Portability) in
India, prefers Idea.

0.00
2006

2007

2008

2009
2010
Year

2011

2012

2013

PAT (in INR mn)


Source: Idea Cellular Annual Reports

RSDT

32
Beacon Sector Special

References

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

www.dot.gov.in
www.trai.gov.in
www.commerce.nic.in
www.adityabirla.com
www.ideacellular.com
www.vodafone.com
www.vodafone.in
www.bharti.com
www.airtel.in
www.forbes.com
www.gsmaintelligence.com
www.telecomtiger.com
http://blogs.hbr.org
www.moneycontrol.com
Telecom Sector in India Vision 2020, released by
Planning Commission
Telecom: Enabling growth and serving the masses,
by Deloitte India
Changing role of regulation, by Telecom Centres of
Excellence (TCoE)
Telecom Industry Market Research, by Plunkett
Research
A brief report on Telecom sector in India, by CCI
(Competition Commission of India)
Media and Telecommunications industry outlook,
by KPMG

RSDT

33
Beacon Sector Special

Research and Scholastic Development Team

Editorial Team
I - Team

S Team

1. Ankit Kaushik (Marketing)

1. Devashish Sharma (Finance)

2. Anirudh D (Finance)

2. Ashwin C T (Marketing)

3. Mandeep Sandhu (Operations)

3. Bhavna Ganesan (Marketing)

4. Neha Bajaj (Finance)

4. Gaurav Phadke (Finance)

5. Nikita Jain (Marketing)

5. Velivala Gopi Tharun (Operations)

6. Rashdip Wadhawan (Finance)

6. Vinit Gandhi (Marketing)

Research and Scholastic Development Team


Symbiosis Institute of Business Management Pune,
Symbiosis Knowledge Village,
Gram Lavale
Pune-412115
rsdt@sibmpune.edu.in

34

RSDT
Beacon Sector Special