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Telecommunication Sector in India: Policies & Regulations Essay

The Indian telecommunication sector has seen something of a swansong in the past decade. It has been one of the fastest growing sectors in India and has grown to become the second biggest telecommunication industry in the world, second only to China. It now has a subscriber base of almost 937. 7 million as of September 2012 and is expected to service over 1 billion people by 2014. The present cellular mobile industry alone is estimated to be at Rs. 1, 48,792 crore without including the wire-line connections which number around 35 million.

The Indian telecommunications growth story is based on a strong base of an excellent telecommunication infrastructure. The telecommunication infrastructure in India boasts of around 7. 5 lakh telecommunication towers which cover the entire span of India. Also, underwater cables which provide broadband connection throughout the world are extensive with Indian companies like Bharti Infratel leading in that space. The telecom sector on the whole contributes around 3% to the total GDP growth of India making it a very important sector for the country as a whole. The ‘wireless and wire-line’ revenue amounted to USD 40. billion with growth of 13. 2% in FY12. The sale of telecom equipment segment which includes a wide array of equipment like public switching equipment, transmission equipment, communication satellites and customer premises equipment like mobile phones, answering machines, fax machines and routers stood at USD 23. 5 billion in FY12 hich also mainly due to the spurt in mobiles phones in India as well as the world. Domestic players like karbonn and micromax have also cropped up over the years in the handset manufacturing industry in addition to the multinational one. The tower infrastructure industry has contributed over Rs. 00000 Cr in the last 15 years and this has resulted in a tele-density of over 80% as of 2012. But the telecom FDI into the country has reduced drastically from over USD 2. 5 billion to around USD 48 million in the last 10 months. The below table shows the tele-density in the different states of India The telecom industry can be split into four industries in India- 1. Fixed line telephony: Companies that operate and maintain transmission facilities through landline 2. Mobile Telephony: Companies that operate and maintain transmission facilities though airwaves 3.

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Internet: Includes Internet service providers (ISP) that offer broadband connections 4. Telecom Equipment: Includes firms that manufacture telecom and related equipment Growth Drivers: The various growth drivers which are driving the telecom industry in India are 1. Mobile Number Portability: 2. Handsets 3. Subscriber base 4. Mobile added services Some of the macroeconomic growth drivers are 1. Policy support 2. Rural growth 3. Higher levels of employment Market Players: The key operators by size are: 1. Bharti Airtel 2. BSNL 3. Vodafone 4. Reliance 5. Idea

BSNL and MTNL are the public service providers which have almost 80% of the market share in the landline segment. They are also subsidised by the government to provide rural wire-line connections. All these companies, along with the smaller players, together serve the nearly 900 million customers and are projected to serve 1. 2 billion customers by 2018. They also provide broadband services along with mobile internet services and provide of variety of add on services. The market share of the wireless telecom space along with mobile internet services are shown below References: http://www. dnb. co. in/IndianTelecomIndustry/OverviewTI. asp

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