Download - Indias Telecom Success Story
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Indias TelecomSuccess Story
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NTP 99 - new telecom policy
Focus on creating an environment which enables continued attraction ofinvestment in the sector and allows creation of communication
infrastructure by leveraging on technological development.
Targets revised:
Telephone on demand by 2002 teledensity of 7% by 2005 and 15% by 2010. Encourage development of telecom in rural areas with suitable affordable tariff
structure to raise rural teledensity from 0.4% to 4% by 2010.
Internet access in all District Headquarters (DHQs) by 2000.
High speed data and multi-media capability using technology including ISDN
to all towns with a population greater than 200,000 by 2002.
Universal Service Obligation defined to provide voice and low speed data
services to all uncovered villages.
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Role of private sector in the early years
17 44
20 51
23 57
30 19
35 35
37 2940 23
36 02
28 39
22 79
18 68
14 88
5 53 58
1 881 20 88
0 34
14 54
17 8
21 59
26 51
32 44
34 73
0
5
10
15
20
25
30
35
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45
1997 1998 1999 2000 2001 Dec-01
De and To a GSM Mob e W e ne
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2001: the turning point
Policy announced for additional licenses in Basic and obile Services
(Jan 2001).
Entry fee:
Basic Services: US$ 0.2mn US$ 25.5mn (+ Bank uarantees = 4
times entry fee for rollout obligations)
S obile Services (4th Operator bid): US$ 0.2mn US$ 45mn
License fee (revenue share) reduced from provisional 15% to 12%, 10%
& 8%.
Limited obility allowed to Basic Services (CD A spectrum allotted to
BSOs). Rollout Obligations to cover Urban / Semi-Urban / Rural areas in equal
proportion.
New licenses awarded in Jul - Sep 2001 : Basic (25), S obile (17).
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2001: Mobile revolution triggered
3.58
0.05
4.8
0.08
6.43
0.1
8.53
0.15
10.53
0.23
0
2
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12
Mar
'01
Sep
'01
Mar
'02
Sep
'02
Dec
'02
GSM Mobile WLL(M)
CD A WLL( ) launched in
limited manner in few
circles.
Tariff for S cellular
mobiles reduced.
Existing Operators expand
service coverage.
3rd & 4th S Operator
networks rollout - further
tariff reductions.
Newly licensed BSOs roll
out networks for WLL( )
on CD A.
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Tariff & Interconnection Regulations
ovement towards cost-based tariffing.
Tariffs closely regulated by TRAI between 1999-2002.
Interconnection Usage Charges established on the principles of
work done termination charges introduced.
Calling Party Pays (CPP) for mobile tariffs free incoming calls
ushered in.
Access Deficit Charges (ADC) for cost-minus fixed line services.
Forbearance allowed recently on all tariffs (except rural fixed line).
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0
1020
30
40
50
60
70
80
90
Pre 1999 1999-00 Oct-00 Jul-02 Mar-03 Current
NLD ILD
Long Distance Peak rate tariffs Rs / min)
0
2
4
6
8
10
1214
16
Pre 1999 1999-00 Oct-00 May-01 Jul-02 May-03
Fixed Line GSM Mobile
Local Call Tariffs (Rs / min)
Increased competition leads to tariff reduction andaffordable services
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2003: Mobile boom has begun
0
0.5
1
1.5
2
2.5
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
2002 2003
Total Additions2002: 5.15 mn
2003: 17.49 mn
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Growth drivers
Declining entry costs and falling tariffs have lowered the bar in
terms of affordability coupled with branding and advertising.
High percentage of population owning two-wheelers are
prospective mobile telephone users.
Upper middle class that spends 6% of its income on telecom
services.
India lags behind other Asian economies (approx. 10 years) -
therefore India is poised for growth.
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2003 : CDMA gains acceptance
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2
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4
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7
Dec-02 Mar-03 Jun-03 Sep-03 Dec-03
0
5
10
15
20
25
CDM Mobile CDM %
6 mn CDMA mobil phones
22%o tot l mobile marketshare
Service coverage in over 1100towns
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Unified Licensing introduced
Unified Access (Basic & Cellular) Service License (UASL) introduced (Nov
2003) as a first step towards Unified Licensing Regime.
Technology neutral and allows provisioning any kind of service.
4th Cellular S license used as benchmark.
BSOs offering WLL( ) allowed migration to UASL - additional entry feeequivalent to 4th Cellular bid.
Rollout obligations to cover 50% DHQs in 3 years.
License fee reduced w.e.f 1.4.2004 by 2% across the board for all access
licensees.
Rural telephony to be covered under Universal Service Obligation.
Intra-circle ergers & Acquisitions recommended by TRAI - competition not
to be compromised, S P to be checked.
Spectrum pricing and allocation guidelines to be reviewed, present
allocations to continue.
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Future Investments
0
2
4
6
8
10
12
14
2003 2004 2005 Total
Wireline Mobile Backbone Total
US$ bn
* arket Analysts' Estimates
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Revenue Projections
0
2
4
6
8
10
12
14
16
2004 2005 2006 2007
Fixed Mobile N D ILD Data
US$ bn
* arket Analysts' Estimates
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Projections : Fixed & Mobile *
0
10
20
30
40
50
60
70
80
90
2003 2004 2005 2006 2007
Fixed GSM CDMA
Millions
* arket Analysts' Estimates
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Teledensity - Urban vs Rural
0
5
10
15
20
25
30
35
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Ur n Rur T t
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