LOVELY PROFESSIONAL UNIVERSITY

DEPARTMENT OF MANAGEMENT

Report on Summer Training

TO KNOW THE POTENTIAL BUYERS

FOR

“WIMAX”

Submitted to Lovely Professional University

In partial fulfillment of the

Requirements for the award of Degree of
Master of Business Administration

Submitted by:
NEETISH SEN
Roll No.-R1803A21
M.B.A. – 3rd sem

DEPARTMENT OF MANAGEMENT
LOVELY PROFESSIONAL UNIVERSITY
PHAGWARA
(YEAR)-2008-10

1
 ACKNOWLEDGEMNT

It is my proud privilege to express my sincere gratitude to all those who help me directly

or indirectly in completion of this project report. I am greatly indebted to TATA

COMMUNICATIONS INTERNET SERVICES LTD who gives me this opportunity. I

am also greatly indebted to Mr. RAVI KAPOOR & Mr. VIJIT AGGRAWAL for their

support, guidance and valuable suggestions by which this work has been completed

effectively and efficiently. These all contributions are of immense value.

I owe thanks to Mr. AJAY, Mr. DHEERAJ and Mr. RISHI for providing the required

data to complete this project. Without which it is not possible to complete the project.

Last but not least I am indebted to those entire people who indirectly contributed and

whom this work should not have been possible. Endeavor has been made to make the

project error free yet I apologies for the mistakes.

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Certificate

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 Executive Summary

I am thankful very much to Tata Communications and Mr. Ravi Kapoor ( Area manager)
for providing me management summer training. Under his guidance I learn about market
and feel that theoretical part is too different from practical market.
My topic for the summer training was to know the potential customer for the launch of
mobile WimaX and to gain the experience of handling team doing survey on the field.
WimaX has the best distance range, the best data rate, the biggest range of frequency of
all Internet access technologies. Wimax physical layer uses OFDM to avoid as most as
possible interferences, efficient modulation to have a long distance range, a good
correction code
LPDC that has been used only in the last decade. In fact, WimaX is based on the latest
technologies and algorithms and has the quality to become a common access to Internet
all over the world.
WiMAX’s technology could be the root of next mobile phone generation, the 4G. This
technology could rely on very high standards of quality and also good mechanisms of
data protection that make it a stable technology for the future. The high distance range
can provide connectivity anywhere and anytime for mobile users, that will be fully
connected to Internet

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 Index

Topic page no.

1. Telecom industry in India 6

2. History of Telecommunication 7

3. Major Telecom Players 17

4. About Tata Communications 26

5. About Tata Group 32

6. Achievements 37

7. Financial Statement 44

8. WiMaX 47

9. Marketing Research 54

10 . Questionnaire 57

11. Recommendation For Wimax 62

12. Bibliography 63

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Telecom Industry in India

The telecom industry is one of the fastest growing industries in India. India has nearly
200 million telephone lines making it the third largest network in the world after China
and USA. With a growth rate of 45%, Indian telecom industry has the highest growth rate
in the world.

History of Indian Telecommunications started in 1851 when the first operational land
lines were laid by the government near Calcutta (seat of British power). Telephone
services were introduced in India in 1881. In 1883 telephone services were merged with
the postal system. Indian Radio Telegraph Company (IRT) was formed in 1923. After
independence in 1947, all the foreign telecommunication companies were nationalized to
form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's
Ministry of Communications. Telecom sector was considered as a strategic service and
the government considered it best to bring under state's control.

The first wind of reforms in telecommunications sector began to flow in 1980s when the
private sector was allowed in telecommunications equipment manufacturing. In 1985,
Department of Telecommunications (DOT) was established. It was an exclusive provider
of domestic and long-distance service that would be its own regulator (separate from the
postal system). In 1986, two wholly government-owned companies were created: the
Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and
Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas.

In 1990s, telecommunications sector benefited from the general opening up of the

economy. Also, examples of telecom revolution in many other countries, which resulted
in better quality of service and lower tariffs, led Indian policy makers to initiate a change
process finally resulting in opening up of telecom services sector for the private sector.
National Telecom Policy (NTP) 1994 was the first attempt to give a comprehensive
roadmap for the Indian telecommunications sector. In 1997, Telecom Regulatory
Authority of India (TRAI) was created. TRAI was formed to act as a regulator to
facilitate the growth of the telecom sector. New National Telecom Policy was adopted in
1999 and cellular services were also launched in the same year.

Telecommunication sector in India can be divided into two segments: Fixed Service
Provider (FSPs), and Cellular Services. Fixed line services consist of basic services,
national or domestic long distance and international long distance services. The state
operators (BSNL and MTNL), account for almost 90 per cent of revenues from basic
services. Private sector services are presently available in selective urban areas, and
collectively account for less than 5 per cent of subscriptions. However, private services
focus on the business/corporate sector, and offer reliable, high- end services, such as
leased lines, ISDN, closed user group and videoconferencing.

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Cellular services can be further divided into two categories: Global System for Mobile
Communications (GSM) and Code Division Multiple Access (CDMA). The GSM sector
is dominated by Airtel, Vodfone-Hutch, and Idea Cellular, while the CDMA sector is
dominated by Reliance and Tata Indicom. Opening up of international and domestic long
distance telephony services are the major growth drivers for cellular industry. Cellular
operators get substantial revenue from these services, and compensate them for reduction
in tariffs on airtime, which along with rental was the main source of revenue. The
reduction in tariffs for airtime, national long distance, international long distance, and
handset prices has driven demand.

The telecom sector is also afflicted by a number of restraints. These include:

• Sluggish pace of reform process.

• Lack of infrastructure in semi-rural and rural areas, which makes it difficult to
make inroads into this market segment as service providers have to incur a huge
initial fixed cost.
• Limited spectrum availability.

INSTITUTIONAL HISTORY OF THE TELECOM SECTOR IN INDIA

The telegraph act of 1885 governed the telecommunications sector. Under this act,
the government was in-charge of policymaking and provision of services . Major
changes in telecommunications in India began in the 1980s. Under the Seventh Plan
(1985-90), 3.6 percent of total outlay was set aside for communications and since
1991, more than 5.5 percent is spent on it . The initial phase of telecom reforms
began in 1984 with the creation of Center for Department of Telematics (C-DOT) for
developing indigenous technologies and private manufacturing of customer premise
equipment. Soon after, the Mahanagar Telephone Nigam Limited (MTNL) and Videsh
Sanchar Nigam Limited (VSNL) were set up in 1986. The Telecom Commission was
established in 1989.

When telecom reforms were initiated in 1994, there were three incumbents in the
fixed service sector, namely DoT (Department of Telecom), MTNL and VSNL. Of
these, DoT operated in all parts of the country except Delhi and Mumbai. MTNL
operated in Delhi and Mumbai and VSNL provided international telephony.

Given its all-India presence and policy-making powers, the DoT enjoyed a monopoly
in the telecom sector prior to the major telecom reforms. However, subsequent to
the second phase of reforms in 1999, which included restructuring the DoT to ensure
a level playing field among private operators and the incumbent, the service-
providing sector of DoT was split up and called Department of Telecom Services
(DTS). DTS was later corporatized and renamed Bharat Sanchar Nigam Limited
(BSNL). This meant separation of the incumbent service provider from the policy-
maker. Broadly, DoT is now responsible for policy-making, licensing and promotion

7
of private investments in both telecom equipment and manufacture and provision of
telecom services. BSNL, a corporate body, is responsible for the provision of
services.

A crucial aspect of the institutional reform of the Indian telecom sector was setting
up of an independent regulatory body in 1997 – the Telecom Regulatory Authority of
India (TRAI), to assure investors that the sector would be regulated in a balanced
and fair manner. TRAI has been vested with powers to ensure its independence from
the government. The government has retained the licensing function with itself. The
main issue with respect to licensing has not been whether it should be with the
regulator but that the terms and conditions of licensing should involve consultations
with TRAI to ensure transparency in the bidding process Some of the main functions
of TRAI include fixing tariffs for telecom services, dispute-settlement between service
providers, protecting consumers through monitoring of service quality and ensuring
compliance to license conditions, setting service targets and pricing policy for all
operators and service providers.

Further changes in the regulatory system took place with the TRAI Act of 2000 that
aimed at restoring functional clarity and improving regulatory quality. TRAI can
frame regulations and can levy fees and charges for telecom services as deemed
necessary. The regulatory body also has a separate fund (called the TRAI General
Fund) to facilitate its functioning. To fairly adjudicate any dispute between licensor
and licensee, between service provider, between service provider and a group of
consumers, a separate disputes settlement body was set up called Telecom Disputes
Settlement and Appellate Tribunal (TDSAT).

Telecommunications is the transmission of data and information between computers

using a communications link such as a standard telephone line. Typically, a basic
telecommunications system would consist of a computer or terminal on each end,
communication equipment for sending and receiving data, and a communication
channel connecting the two users. Appropriate communications software is also
necessary to manage the transmission of data between computers. Some
applications that rely on this communications technology include the following:

Electronic mail (e-mail) is a message transmitted from one person to another

through computerized channels. Both the sender and receiver must have access to
on-line services if they are not connected to the same network. E-mail is now one of
the most frequently used types of telecommunication.

Facsimile (fax) equipment transmits a digitized exact image of a document over

telephone lines. At the receiving end, the fax machine converts the digitized data
back into its original form.

Voice mail is similar to an answering machine in that it permits a caller to leave a

voice message in a voice mailbox. Messages are digitized so the caller's message can
be stored on a disk.

Videoconferencing involves the use of computers, television cameras, and

communications software and equipment. This equipment makes it possible to
conduct electronic meetings while the participants are at different locations.

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The Internet is a continuously evolving global network of computer networks that
facilitates access to information on thousands of topics. The Internet is utilized by
millions of people daily.

Actually, telecommunications is not a new concept. It began in the mid-1800s with

the telegraph, whereby sounds were translated manually into words; then the
telephone, developed in 1876, transmitted voices; and then the teletypewriter,
developed in the early 1900s, was able to transmit the written word.

Since the 1960s, telecommunications development has been rapid and wide
reaching. The development of dial modem technology accelerated the rate during the
1980s. Facsimile transmission also enjoyed rapid growth during this time. The 1990s
have seen the greatest advancement in telecommunications. It is predicted that
computing performance will double every eighteen months. In addition, it has been
estimated that the power of the computer has doubled thirty-two times since World
War II (With row, 1997). The rate of advancement in computer technology shows no
signs of slowing. To illustrate the computer's rapid growth, Ronald Brown, former
U.S. secretary of commerce, reported that only fifty thousand computers existed in
the world in 1975, whereas, by 1995, it was estimated that more than fifty thousand
computers were sold every ten hours (U.S. Department of Commerce, 1995).

Deregulation and new technology have created increased competition and widened
the range of network services available throughout the world. This increase in
telecommunication capabilities allows businesses to benefit from the information
revolution in numerous ways, such as streamlining their inventories, increasing
productivity, and identifying new markets. In the following sections, the technology
of modern telecommunications will be discussed.

Progress of reforms

a.) Private Participation in Telecom - For the provision of basic services, the entire
country was divided into 21 telecom circles, excluding Delhi and Mumbai (Singh et.
al. 1999). With telecom markets opened to competition, DoT and MTNL were joined
by private operators but not in all parts of the country. By mid-2001, all six of the
private operators in the basic segment had started.

After a recent licensing exercise in 2002, there exists competition in most service
areas. However, the market is still dominated by the incumbent. In December 2002,
the private sector provided approximately 10 million telephones in fixed, WLL
(Wireless Local Loop) and cellular lines compared to 0.88 million cellular lines in
March 1998 (DoT Annual Report, 2002). 72 per cent of the total private investment
in telecom has been in cellular mobile services followed by 22 per cent in basic
services. After the recent changes, the stage is now set for greater competition in
most service areas for cellular mobile Over time, the rise in coverage of cellular
mobile will imply increased competition even for the basic service market because of
competition among basic and cellular mobile services.

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b.) Teledensity and Village Public Phones (VPTs) - India's rapid population increase
coupled with its progress in telecom provision has landed India's telephone network
in the sixth position in the world and second in Asia (ITU). The much publicized
statistic about telecom development in India is that in the last five years, the lines
added for basic services is 1.5 times those added in the last five decades! The annual
growth rate for basic services has been 22 percent and over 100 percent for internet
and cellular services. As Dossani (2002) argues, the comparison of teledensity of
India with other regions of the world should be made keeping in mind the
affordability issues. Assuming households have a per capita income of $350 and are
willing to spend 7 percent of that total income on communications, then only about
1.6 percent of households will be able to afford $30 (for a $1000 investment per
line).

Teledensity has risen to 4.9 phones per 100 persons in India compared to the
average 7.3 mainlines per 100 people around the world. Although, the coverage is
still much higher in urban areas - 13.7 in urban areas compared to1.4 in rural areas,
the government has made efforts to connect villages through village public
telephones (VPT) and Direct Exchange Lines (DEL). This coverage increased from 4.6
lakhs in March 2002 to 5.10 lakhs in December 2002 for VPT and from 90.1 lakhs in
March to 106.6 lakhs in December 2002 for DELs. BSNL has been mainly responsible
for providing VPTs; more than 84 percent of the villages were connected by 503610
VPTs with private sector also providing 7123 VPTs .

The overall telecom growth rate is likely to be high for some years, given the
increase in demand as income levels rise and as the share of services in overall GDP
increases. The growth rate will be even higher due to the price decrease resulting
from a reduction in cost of providing telecom services. A noteworthy feature of the
growth rate is the rapid rate at which the subscriber base for cellular mobile has
increased in the last few years of the 1990s, which is not surprising in view of the
relatively lower subscriber base for cellular mobile.

c.) Foreign Participation – India has opened its telecom sector to foreign investors
up to 100 percent holding in manufacturing of telecom equipment, internet services,
and infrastructure providers (e-mail and voice mail), 74 percent in radio-paging
services, internet (international gateways) and 49 percent in national long distance,
basic telephone, cellular mobile, and other value added services (FICCI, 2003). Since
1991, foreign direct investment (FDI) in the telecom sector is second only to power
and oil - 858 FDI proposals were received during 1991-2002 totaling Rs. 56,279
crores (DoT Annual Report, 2002). Foreign investors have been active participants
in telecom reforms even though there was some frustration due to initial dithering by
the government. Until now, most of the FDI has come in the cellular mobile sector
partly due to the fact that there have been more cellular mobile operators than fixed
service operators. For instance, during the period 1991-2001, about 44 percent of
the FDI was in cellular mobile and about 8 percent in basic service segment. This
total FDI includes the categories of manufacturing and consultancy and holding
companies

d.) Tariff-setting - An essential ingredient of the transition from a protected market

to competition is the alignment of tariffs to cost-recovery prices. In basic telecom for
example, pricing of the kind that prevailed in India prior to the reforms, led to a high
degree of cross-subsidization and introduced inefficient decision-making by both
consumers and service-providers. Traditionally, DoT tariffs cross-subsidized the costs

10
of access (as reflected by rentals) with domestic and international long distance
usage charges (Singh et. al. 1999). Therefore, re-balancing of tariffs - reducing
tariffs that are above costs and increasing those below costs - was an essential pre-
condition to promoting competition among different service providers and efficiency
in general.

TRAI issued its first directive regarding tariff-setting following NTP 99 aimed at re-
balancing tariffs and to usher in an era of competitive service provision.
Subsequently, it conducted periodic reviews and made changes in the tariff levels, if
necessary. Re-balancing led to a reduction in cross-subsidization in the fixed service
sector. Cost based pricing, a major departure from the pre-reform scenario, also
provides a basis for making subsidies more transparent and better targeted to
specific social objectives, e.g. achieving the USO.

e) Service Quality - One of the main reasons for encouraging private participation in
the provision of infrastructure rests on its ability to provide superior quality of
service. In India, as in many developing countries, low teledensity resulted in great
emphasis being laid on rapid expansion often at the cost of quality of service. One of
the benefits expected from the private sector's entry into telecom is an improvement
in the quality of service to international standards. Armed with financial and technical
resources, and greater incentive to make profits, private operators are expected to
provide consumers value for their money. Telephone faults per 100 main lines came
down to 10.32 and 19.14 in Mumbai and Delhi respectively in 2002-03 compared to
11.72 and 26.6 in 1997-98 (Figures 6 and 7). Quality of service was identified as an
important reform agenda and TRAI has devised QOS (Quality of Service) norms that
are applicable across the board to all operators (Singh et. al. 1999).

Pre reform period and Telecommunication in India

Before 1990's Telecommunication services in India were complete government

Monopoly - the Department of Telecommunication (DoT). Government also retained
the rights for manufacturing of Telecommunication equipments. MTNL and VSNL
were created in the year 1986.Early 1990's saw initial attempts to attract private
investment. Telecommunication equipment manufacturing was deli censed in the
year 1991.

A notable revolution has occurred in the telecom sector. In the pre reforms era, this
was entirely in the hands of the central government and due to lack of competition,
the call charges were quite high. Further, due to lack of funds with the government,
the government could never meet the demand for telephones. In fact, a person
seeking a telephone connection had to wait for years before he could get a telephone
connection. The service rendered by the government monopoly was also very poor.
Wrong billing, telephones lying dead for many days continuously due to slackness on
the part of the telecom staff to attend to complaints, cross connections due to
faulty / ill maintained telephone lines, obsolete instruments and machinery in the
telephone department were the order of the day in the pre reforms era.

Today, there are many players in the telecom sector. The ultimate beneficiary has
been the consumer. Prices of services in this sector have fallen drastically.

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Telephone connections are today affordable to everyone and are also easily
available. Gone are the days, when one had to wait for years to get a telephone
connection. The number of telephone connections which was only 2.15 million (fixed
lines) in 1981 increased to 5.07 million(fixed lines) in 1991. Today (as in 2003),
there are 54.62 million telephone connections of which 41.33 million are fixed line
telephone connections, 12.69 million are cellular mobiles and the remaining 0.60
million are WLL telephones1. Wireless in Local Loop (WLL) telephones and cellular
mobile telephones were unknown in India a few years ago. Cell phones charges have
come down so much that today one can see even a common man going around with
a cell phone in his hand. The private companies are giving various incentives to
attract customers, a situation which is entirely opposite to the conditions prevailing
in the pre reforms era when one had to wait for years to get a telephone connection.

The first step toward deregulation and beginning of liberalization and private sector
participation was the announcement of National Telecom Policy 1994.NTP 1994 , for
the first time, allowed private/foreign players to enter the 'basic' and the 'new
cellular mobile section. FDI up to 49% of total equity was also allowed in these
sectors. The policy allowed one private service provider to compete in basic services
with the incumbent DoT in each DoT internal circle. It allowed duopoly in cellular
mobile services in each circle. As part of the implementation of the NTP 94, licenses
were issued against license fees through a bidding process. This policy initiated the
setting up of an independent regulator–the Telecom Regulatory Authority of India
(TRAI), which was established in 1997. The main objective of TRAI is to provide an
effective regulatory framework to ensure fair competition while, at the same time,
protect the interest of the consumers.

Liberalization and reforms in Telecom sector since early 1990's till date are
briefed below:

1991-92:

1. On 24th July 1991, Government announced the New Economic Policy.

2. Telecom Manufacturing Equipment license was delicensed in 1991.
3. Automatic foreign collaboration was permitted with 51 per cent equity by the
collaborator.

1992-93:

Value added services were opened for private and foreign players on franchise or
license basis. These included cellular mobile phones, radio paging, electronic mail,
voice mail, audiotex services, videotex services, data services using VSAT's, and
video conferencing.

1994-95:

1. The Government announced a National Telecom Policy 1994 in September 1994.

It opened basic telecom services to private participation including foreign
investments.
2. Foreign equity participation up to 49 per cent was allowed in basic telecom
services, radio paging and cellular mobile. For value added services the foreign
equity cap was fixed at 51 per cent.
3. Eight cellular licensees for four metros were finalized.

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1996-97:

1. TRAI was set up as an autonomous body to separate the regulatory functions from
policy formulations and operational functions.
2. Coverage of the term "infrastructure" expanded to include telecom to enable the
sector to avail of fiscal incentives such as tax holiday and concessional duties.
3. An agreement between Department of Telecommunication (DoT) and financial
institutions to facilitate funding of cellular and basic telecom projects.
4. External Commercial Borrowing (ECB) limits on telecom projects made flexible
with an increased share from 35 per cent to 50 per cent of total project cost.
5. Internet Policy was finalized.

1998-99:

FDI up to 49 per cent of total equity, subject to license, permitted in companies

providing Global Mobile Personal Communication (GMPC) by satellite services.

1999-00

1. National Telecom Policy 1999 was announced which allowed multiple fixed
Services operators and opened long distance services to private operators.
2. TRAI reconstituted: clear distinction was made between the recommendatory and
regulatory functions of the Authority.
3. DOT/MTNL was permitted to start cellular mobile telephone service.
4. To separate service providing functions from policy and licensing functions,
Department of Telecom Services was set up.
5. A package for migration from fixed license fee to revenue sharing offered to
existing cellular and basic service providers.
6. First phase of re-balancing of tariff structure started. STD and ISD charges were
reduced by 23 per cent on an average.
7. Voice and data segment was opened to full competition and foreign ownership
increased to 100 per cent from 49 per cent previously.

2000-01:

1. TRAI Act was amended. The Amendment clarified and strengthened the
recommendatory power of TRAI, especially with respect to the need and timing of
introduction of new services provider, and in terms of licenses to a services
provider.
2. Department of Telecom Services and Department of Telecom operations
corporatized by creating Bharat Sanchar Nigam Limited.
3. Domestic long distance services opened up without any restriction on the number
of operators.
4. Second phase of tariff rationalization started with further reductions in the long
distance STD rates by an average of 13 per cent for different distance slabs and ISD
rates by 17 per cent.
5. Internet Service Providers were given approval for setting up of International
Gateways for Internet using satellite as a medium in March 2000.
6. In August 2000, private players were allowed to set up international gateways via
the submarine cable route.
7. The termination of monopoly of VSNL in International Long Distance services was
antedated to March 31, 2002 from March 31, 2004.

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2001-02:

1. Communication Convergence Bill, 2001 was introduced in August 2001.

2. Competition was introduced in all services segments. TRAI recommended opening
up of market to full competition and introduction of new services in the telecom
sector. The licensing terms and conditions for Cellular Mobile were simplified to
encourage entry for operators in areas without effective competition.
3. Usage of Voice over Internet Protocol permitted for international telephony
service.
4. The five-year tax holiday and 30 per cent deduction for the next five years
available to the telecommunication sector till 31st March 2000 was reintroduced for
the units commencing their operations on or before 31st March 2003. These
concessions were also extended to internet services providers and broadband
networks.
5. Thirteen ISP's were given clearance for commissioning of international gateways
for Internet using satellite medium for 29 gateways.
6. License conditions for Global Mobile Personal Communications by Satellite finalized
in November 2001.
7. National Long Distance Service was opened up for unrestricted entry with the
announcement of guidelines for licensing NLD operators. Four companies were issued
Letter of Intent (LOI) for National Long Distance Service of which three licenses have
been signed.
8. The basic services were also opened up for competition. 33 Basic Service licenses
(31 private and one each to MTNL and BSNL) were issued up to 31stDecember 2001.
9. Four cellular operators, one each in four metros and thirteen were permitted with
17 fresh licenses issued to private companies in September/October 2001. The cell
phone providers were given freedom to provide, within their area of operation, all
types of mobile services equipment, including circuit and/or package switches that
meet the relevant International Telecommunication Union (ITU)/ Telecom
Engineering Centre (TEC) standards.
10. Wireless in Local Loop (WLL) was introduced for providing telephone connection
in urban, semi-urban and rural areas.
11. Disinvestment of PSU's in the telecom sector was also undertaken during the
year. In February 2002, the disinvestment of VSNL was completed by bringing down
the government equity to 26 per cent and the management of the company was
transferred to Tata Group, a strategic partner. During the year, HTL was also
disinvested.
12. Government allowed CDMA technology to enter the Indian market.
13. Reliance, MTNL and Tata were issued licenses to provide the CDMA based
services in the country.
14. TRAI recommended deregulating regulatory intervention in cellular tariffs, which
meant that operators need no longer have prior approval of the regulator for
implementing tariff plans except under certain conditions.

2002-03

1. International long distance business opened for unrestricted entry.

2. Telephony on internet permitted in April 2002.
3. TRAI finalized the System of Accounting Separation (SAS) providing detailed
accounting and financial system to be maintained by telecom service providers.

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2003-04

1. Unified Access Service Licenses regime for basic and cellular services was
introduced in October 2003. This regime enabled services providers to offer fixed and
mobile services under one license. Consequently 27 licenses out of 31 licenses
converted to Unified Access Service Licenses.
2. Interconnection Usage Charge regime was introduced with the view of providing
termination charge for cellular services and enable introduction of Calling Party Pays
regime in voice telephony segment.
3. The Telecommunication Interconnection Usage Charges Regulation 2003 was
introduced on 29th October 2003 which covered arrangements among service
providers for payment of Interconnection Usage Charges for Telecommunication
Services and covered Basic Service that includes WLL (M) services, Cellular Mobile
Services, and Long Distance Services (STD/ISD) throughout the territory of India
4. The Universal Service Obligation fund was introduced as a mechanism for
transparent cross subsidization of universal access in telecom sector. The fund was
to be collected through a 5 per cent levy on the adjusted gross revenue of all
telecom operators.
5. Broadcasting notified as Telecommunication services under Section 2(i)(k) of TRAI
Act.

2004-05:

1. Budget 2004-05 proposed to lift the ceiling from the existing 49 per cent to 74 per
cent as an incentive to the cellular operators to fall in line with the new unified
licensing norm.
2. 'Last Mile' linkages permitted in April 2004 within the local area for ISP's for
establishing their own last mile to their customers.
3. Indoor use of low power equipments in 2.4 GHz band de-licensed from August
2004.
4. Broadband Policy announced on 14th October 2004. In this policy, broadband had
been defined as an "always-on" data connection supporting interactive services
including internet access with minimum download speed of 256 kbps per subscriber.
5. The Telecommunications (Broadcasting and Cable Services) Interconnection
Regulation 2004 was introduced on 10th December 2004.
6. BSNL and MTNL launched broadband services on 14th January 2005.
7. TRAI announced the reduction of Access Deficit Charge (ADC) by 41 per cent on
ISD calls and by 61 per cent on STD calls which were applicable from 1st February
2005.

2005-2006

1. Budget 2005-2006 cleared a hike in FDI ceiling to 74 per cent from the earlier
limit of 49 per cent. 100 per cent FDI was permitted in the area of telecom
equipment manufacturing and provision of IT enabled services.
2. Annual license fee for National Long Distance (NLD) as well as International Long
Distance (ILD) licenses reduced to 6 per cent of Adjusted Gross Revenue (AGR) with
effect from 1st January 2006.

15
3. BSNL and MTNL launched the 'One-India Plan' with effect from 1st March 2006
which enable the customers of BSNL and MTNL to call from one end of India to other
at the cost of Rs. 1 per minute, any time of the day to phone.
4. TRAI fixed Ceiling Tariff for International Bandwidth, Ceiling Tariff for higher
capacities reduced by about 70 per cent and for lower capacity by 35 per cent.
5. Regulation on Quality of Service of Basic and Cellular Mobile Telephone Services
2005 introduced on 1st July 2005.
6. BSNL announced 33 per cent reduction in call charges for all the countries for
international calls.
7. Quality of Service (Code of Practice for Metering and Billing Accuracy) Regulation
2006 introduced on 21st March 2006.

11th plan (2007-2012)

FDI in Telecom sector has increased in recent years with value of 81.62 billion with
share of 10% in total inflow during January 2000 to June 2005. This is mainly in
telecom services and not in telecom manufacturing sector. Therefore, it is essential
to enhance the prospect for inflow of increased funds. The NTP 1999 sought to
promote exports of telecom equipments and services. But till date export of telecom
equipment remains minimal. Most of the state-of-the-art telecom equipments
including mobile phones are imported from abroad. There is thus immense potential
for indigenous manufacturing in India. Certain measures like financial packages,
formation of a telecom export promotion council, creation of integrated facilities for
telecom equipment through SEZ and encouraging overseas vendors to set up
facilities in India, are required for making India a hub for telecom equipment
manufacturing and attract FDI. The telecom sector has shown robust growth during
the past few years. It has also undergone a substantial change in terms of mobile
versus fixed phones and public versus private participation. The following table and
discussions from the report of the working report on the telecom sector for the 11th
plan (2007-2012)will show the growth of telecom sector since 2003:

16
Major Players:

• -State owned companies (BSNL and MTNL)

• -Private Indian owned companies (Reliance Infocomm, Tata Teleservices,)
• -Foreign invested companies (Vodafone-Essar, Bharti Tele-Ventures,
Escotel, Idea Cellular, BPL Mobile, Spice Communications)

BSNL
On October 1, 2000 the Department of Telecom Operations, Government of India
became a corporation and was renamed Bharat Sanchar Nigam Limited (BSNL).
BSNL is now India’s leading telecommunications company and the largest public
sector undertaking. It has a network of over 45 million lines covering 5000 towns
with over 35 million telephone connections.
The state-controlled BSNL operates basic, cellular (GSM and CDMA) mobile, Internet
and long distance services throughout India (except Delhi and Mumbai). BSNL will be
expanding the network in line with the Tenth Five-Year Plan (1992-97). The aim is to
provide a telephone density of 9.9 per hundred by March 2007. BSNL, which became
the third operator of GSM mobile services in most circles, is now planning to
overtake Bharti to become the largest GSM operator in the country. BSNL is also the
largest operator in the Internet market, with a share of 21 per cent of the entire
subscriber base

BHARTI
Established in 1985, Bharti has been a pioneering force in the telecom sector with
many firsts and innovations to its credit, ranging from being the first mobile service
in Delhi, first private basic telephone service provider in the country, first Indian
company to provide comprehensive telecom services outside India in Seychelles and
first private sector service provider to launch National Long Distance Services in
India. Bharti Tele-Ventures Limited was incorporated on July 7, 1995 for promoting
investments in telecommunications services. Its subsidiaries operate telecom
services across India. Bharti’s operations are broadly handled by two companies: the
Mobility group, which handles the mobile services in 16 circles out of a total 23
circles across the country; and the Infotel group, which handles the NLD, ILD, fixed
line, broadband, data, and satellite-based services. Together they have so far
deployed around 23,000 km of optical fiber cables across the country, coupled with
approximately 1,500 nodes, and presence in around 200 locations. The group has a
total customer base of 6.45 million, of which 5.86 million are mobile and 588,000
fixed line customers, as of January 31, 2004. In mobile, Bharti’s footprint extends
across 15 circles.
Bharti Tele-Ventures' strategic objective is “to capitalize on the growth opportunities
the company believes are available in the Indian telecommunications market and

17
consolidate its position to be the leading integrated telecommunications services
provider in key markets in India, with a focus on providing mobile services”.

MTNL

MTNL was set up on 1st April 1986 by the Government of India to upgrade the
quality of telecom services, expand the telecom network, introduce new services and
to raise revenue for telecom development needs of India’s key metros – Delhi, the
political capital, and Mumbai, the business capital. In the past 17 years, the company
has taken rapid strides to emerge as India’s leading and one of Asia’s largest telecom
operating companies. The company has also been in the forefront of
technology induction by converting 100% of its telephone exchange network into the
state-of-the-art digital mode. The Govt. of India currently holds 56.25% stake in the
company. In the year 2003-04, the company's focus would be not only consolidating
the gains but also to focus on new areas of enterprise such as joint ventures for
projects outside India, entering into national long distance operation, widening the
cellular and CDMA-based WLL customer base, setting up internet and allied services
on an all India basis.
MTNL has over 5 million subscribers and 329,374 mobile subscribers. While the
market for fixed wireline phones is stagnating, MTNL faces intense competition from
the private players—Bharti, Hutchison and Idea Cellular, Reliance Infocomm—in
mobile services. MTNL recorded sales of Rs. 60.2 billion ($1.38 billion) in the year
2002-03, a decline of 5.8 per cent over the previous year’s annual turnover of Rs.
63.92 billion.

RELIANCE INFOCOMM

Reliance is a $16 billion integrated oil exploration to refinery to power and textiles
conglomerate (Source: http://www.ril.com/newsitem2.html). It is also an integrated
telecom service provider with licenses for mobile, fixed, domestic long distance and
international services. Reliance Infocomm offers a complete range of telecom
services, covering mobile and fixed line telephony including broadband, national and
international long distance services, data services and a wide range of value added
services and applications. Reliance IndiaMobile, the first of Infocomm's initiatives
was launched on December 28, 2002. This marked the beginning of Reliance's vision
of ushering in a digital revolution in India by becoming a major catalyst in improving
quality of life and changing the face of India. Reliance Infocomm plans to extend its
efforts beyond the traditional value chain to develop and deploy telecom solutions for
India's farmers, businesses, hospitals, government and public sector organizations.
Until recently, Reliance was permitted to provide only “limited mobility” services
through its basic services license. However, it has now acquired a unified access
license for 18 circles that permits it to provide the full range of mobile services. It

18
has rolled out its CDMA mobile network and enrolled more than 6 million subscribers
in one year to become the country’s largest mobile operator. It now wants to
increase its market share and has recently launched pre-paid services. Having
captured the voice market, it intends to attack the broadband market.

TATA TELESERVICES

Tata Teleservices is a part of the $12 billion Tata Group, which has 93 companies,
over 200,000 employees and more than 2.3 million shareholders. Tata Teleservices
provides basic (fixed line services), using CDMA technology in six circles:
Maharashtra (including Mumbai), New Delhi, Andhra Pradesh, Tamil Nadu, Gujarat,
and Karnataka. It has over 800,000 subscribers. It has now migrated to unified
access licenses, by paying a Rs. 5.45 billion ($120 million) fee, which enables it to
provide fully mobile services as well.
The company is also expanding its footprint, and has paid Rs. 4.17 billion ($90
million) to DoT for 11 new licenses under the IUC (interconnect usage charges)
regime. The new licenses, coupled with the six circles in which it already operates,
virtually gives the CDMA mobile operator a national footprint that is almost on par
with BSNL and Reliance Infocomm. The company hopes to start off services in these
11 new circles by August 2004. These circles include Bihar, Haryana, Himachal
Pradesh, Kerala, Kolkata, Orissa, Punjab, Rajasthan, Uttar Pradesh (East) & West
and West Bengal.

VSNL

On April 1, 1986, the Videsh Sanchar Nigam Limited (VSNL) - a wholly Government
owned corporation - was born as successor to OCS. The company operates a network
of earth stations, switches, submarine cable systems, and value added service nodes
to provide a range of basic and value added services and has a dedicated work force
of about 2000 employees. VSNL's main gateway centers are located at Mumbai, New
Delhi, Kolkata and Chennai. The international telecommunication circuits are derived
via Intelsat and Inmarsat satellites and wide band submarine cable systems e.g.
FLAG, SEA-ME-WE-2 and SEA-ME-WE-3.
The company's ADRs are listed on the New York Stock Exchange and its shares are
listed on major Stock Exchanges in India. The Indian Government owns
approximately 26 per cent equity, M/s Panatone Finvest Limited as investing vehicle
of Tata Group owns 45 per cent equity and the overseas holding (inclusive of FIIs,
ADRs, Foreign Banks) is approximately 13 per cent and the rest is owned by Indian
institutions and the public. The company provides international and Internet services
as well as a host of value-added services. Its revenues have declined from Rs. 70.89
billion ($1.62 billion) in 2001-02 to Rs. 48.12 billion ($1.1 billion) in 2002-03, with

19
voice revenues being the mainstay. To reverse the falling revenue trend, VSNL has
also started offering domestic long distance services and is launching broadband
services. For this, the company is investing in Tata Telservices and is likely to
acquire Tata Broadband.

VODAFONE

Vodafone Essar is the Indian subsidiary of Vodafone Group and commenced operations
in 1994 when its predecessor Hutchison Telecom acquired the cellular license for
Mumbai. The company now has operations across the country with over 78.68 million
customers**.

Over the years, Vodafone Essar, under the Hutch brand, has been named the ‘Most
Respected Telecom Company´, the ´Best Mobile Service in the country´ and the ´Most
Creative and Most Effective Advertiser of the Year´.

Vodafone is the world´s leading international mobile communications group with

approximately 315 million proportionate customers as at 30 June 2009. Vodafone
currently has equity interests in 31 countries across five continents and around 40 partner
networks worldwide. For more information, please visit www.vodafone.com

The Essar Group is a diversified business corporation with a balanced portfolio of assets
in the manufacturing and services sectors of Steel, Energy, Power, Communications,
Shipping Ports & Logistics, and Projects. Essar employs more than 50,000 people across
offices in Asia, Africa, Europe and the Americas.

.IDEA

Indian regional operator IDEA Cellular Ltd. has a new ownership structure and grand
designs to become a national player, but in doing so is likely to become a thorn in
the side of Reliance Communications Ltd. IDEA operates in eight telecom “circles,” or
regions, in Western India, and has received additional GSM licenses to expand its
network into three circles in Eastern India -- the first phase of a major expansion
plan that it intends to fund through an IPO, according to parent company Aditya Birla .

Company Name Market Cap in Crores

Bharti Airtel 108066.23

20
 Reliance Communications 32683.44
Idea Cellular 14368.92
Tata Communications 13181.25
Tata Teleservices 4393.06
Spice Communications 4136.13
MTNL 4044.6
Telecom Policy Environment

Indian telecommunications today benefits from among the most enlightened

regulation in the region, and arguably in the world. The sector, sometimes
considered the “poster-boy for economic reforms,” has been among the chief
beneficiaries of the post-1991 liberalization. Unlike electricity, for example, where
reforms have been stalled, telecommunications has generally been seen as removed
from “mass concerns,” and thus less subject to electoral calculations. Market-
oriented reforms have also been facilitated by lobbying from India’s booming
technology sector, whose continued success of course depends on the quality of
communications infrastructure.
Despite several hiccups along the way, the Telecom Regulatory Authority of India
(TRAI), the independent regulator, has earned a reputation for transparency and
competence. With the recent resolution of a major dispute between cellular and fixed
operators (see below), Indian telecommunications, already among the most
competitive markets in the world, appears set to continue growing rapidly.
While telecom liberalization is usually associated with the post-1991 era, the seeds
of reform were actually planted in the 1980s. At that time, Rajiv Gandhi proclaimed
his intention of “leading India into the 21st century,” and carved the Department of
Telecommunications (DOT) out of the Department of Posts and Telegraph. For a time
he also even considered corporatizing the DOT, before succumbing to union
pressure. In a compromise, Gandhi created two DOT-owned corporations:
Mahanagar Telephone Nigam Limited (MTNL), to serve Delhi and Bombay, and
Videsh Sanchar Nigam Limited (VSNL), to operate international telecom services. He
also introduced private capital into the manufacturing of telecommunications
equipment, which had previously been a DOT monopoly.
These and other reforms were limited by the unstable coalition politics of the late
1980s. It was not until the early 1990s, when the political situation stabilized, and
with the general momentum for economic reforms, that telecommunications
liberalization really took off. In 1994, the government released its National
Telecommunications Policy (NTP-94), which allowed private fixed operators to take
part in the Indian market for the first time (cellular operators had been allowed into
the four largest metropolitan centers in 1992). Under the government’s new policy,
India was divided into 20 circles roughly corresponding to state boundaries, each of
which would contain two fixed operators (including the incumbent), and two mobile
operators.
As ground-breaking as NTP-94 was, its implementation was unfortunately marred by

21
regulatory uncertainty and over-bidding. A number of operators were unable to live
up to their profligate bids and, confronted with far less lucrative networks than they
had supposed, pulled out of the country. As a result, competition in India’s telecom
sector did not really become a reality until 1999. At that time the government’s New
Telecommunications Policy (NTP-99) switched from a fixed fee license to a revenue-
sharing regime of approximately 15%. This figure has subsequently been lowered (to
10%-12%), and is expected to be reduced even further over the coming years. Still,
India continues to derive substantial revenue from license fees ($800 million in
2001-2002), leading some critics to suggest that the government has abrogated its
responsibilities as a regulator to those as a seller.

Another, perhaps even more significant, problem with India’s initial attempts to
introduce competition was the lack of regulatory clarity. Private operators
complained that the licensor – the DOT – was also the incumbent operator. The
many stringent conditions attached to licenses were thus seen by many as the DOT’s
attempt to limit competition. It was in response to such concerns that the
government in 1997 set up the telecom Regulatory Authority of India (TRAI), the
nation’s first independent telecom regulator.

Over the years, TRAI has earned a growing reputation for independence,
transparency and an increasing level of competence. Early on, however, the
regulator was beleaguered on all fronts. It had to contend with political interference,
the incumbent’s many challenges to its authority, and accusations of ineptitude by
private players. Throughout the late 1990s, TRAI’s authority was steadily whittled
away in a number of cases, when the courts repeatedly held that regulatory power
lay with the central government. It was not until 2000, with the passing of the TRAI
Amendment Act, that the regulatory body really came into its own. Coming just a
year after NTP-99, the act marks something of a watershed moment in the history of
India telecom liberalization. It set the stage for several key events that have enabled
the vigorous competition witnessed today.

Some of these events include:

• The corporatization of the DOT and the creation of a new state-owned telecom
company, Bharat Sanchar Nigam Ltd (BSNL), in 2000;
• The opening up of India’s internal long-distance market in 2000, and the
subsequent drop in long-distance rates as part of TRAI’s tariff rebalancing
exercise;
• The termination of VSNL’s monopoly over international traffic in 2002,
and the partial privatization of the company that same year, with the Tata
group assuming a 25% stake and management control;
• The gradual easing of the original duopoly licensing policy, allowing a
greater number of operators in each circle;
• The legalization, in 2002, of IP telephony (a move that many believe

22
was held up due to lobbying by VSNL, which feared the consequences on
its international monopoly);
The introduction in 2003 of a Calling Party Pays (CPP) system for cell
phones, despite considerable opposition (including litigation) by fixed
operators;
• And, more generally, the commencement of more stringent
interconnection regulation by TRAI, which has moved from an inter-
operator “negotiations-based” approach (often used by the stronger
operator to negotiate ad infinitum) to a more rules-based approach.

All of these events have created an impressive forward-momentum in Indian

telecommunications, resulting in a vigorously competitive and fast-growing sector.
India has also suffered from its fair share of regulatory hiccups. Many operators
(mobile players in particular) still complain about the difficulties of gaining access to
the incumbent’s (BSNL) network, and the government’s insistence on capping FDI in
the telecom sector to 49% (a move made in the name of national security) limits
capital availability and thus network rollout. In addition, ISPs, who were allowed into
the market under a liberal licensing regime in 1998, continue to hemorrhage money,
and have been pleading with the government for various forms of relief, including
the provision of unmetered phone numbers for Internet access. Despite initially
impressive results, the growth of Internet in the country has recently stalled, with
only 8 million users. Broadband penetration, too, remains tiny.

Unified Licensing

But perhaps the biggest – and, until recently, most intractable – regulatory problem
has been the drawn-out battle over “limited mobility” telephony. This imbroglio
began in 1999, when MTNL sought permission from TRAI to provide CDMA-based
WLL services with “limited mobility.” GSM cellular operators were soon up in arms,
arguing that “limited mobility” was simply a backdoor entry into their business.
Moreover, fixed operators had paid lower license and spectrum fees than cellular
ones; were not required to pay access charges for cell-to-fixed calls (unlike their
cellular counterparts); and, amidst accusations of cross-subsidization, were charging
considerably lower rates than the cellular operators.
The resulting conflict dragged on in the courts and in the political arena for years.
Fixed operators including new entrants Reliance and Tata Teleservices claimed that
they were being prevented from providing a cheap service that would drive
penetration and be of benefit to the “common man”; cellular players bitterly opposed
what they perceived as unequal regulatory treatment for two kinds of operators who
were in fact offering the same service. The real victim, of course, was the Indian
telecommunications market, which suffered from investor perceptions of regulatory
confusion and operator in-fighting. In late 2002, for example, thousands of mobile
users in New Delhi were for a time cut off from the fixed-line network when MTNL
shut down interconnection for cellular companies. (MTNL later attributed the incident

23
to a “technical snag.”)
It was not until late 2003 that the issue was finally resolved, under considerable
government pressure, when cellular operators agreed to withdraw their many cases
against the fixed-line operators. Fixed operators would in effect be allowed to enter
the mobile business; in return, the government granted cellular players several
concessions, including lower revenue-share arrangements estimated to total over
$210 million. Perhaps most notably, the government announced its intention to
adopt a “unified access licensing” regime, which would in the future provide a single,
technology-neutral license for fixed and cellular operators. The hope is that this
new license category will prevent a repeat of the recent controversy, and allow new
technologies to enter the Indian market without requiring a wholesale rewrite of
licensing laws.

MARKET TRENDS
The telecoms trends in India will have a great impact on everything from the humble
PC, internet, broadband (both wireless and fixed), cable, handset features, talking
SMS, IPTV, soft switches, and managed services to the local manufacturing and
supply chain.
This report discusses key trends in the Indian telecom industry, their drivers and the
major impacts of such trends affecting mobile operators, infrastructure and handset
vendors.
Higher acceptance for wireless services
Indian customers are embracing mobile technology in a big way (an average of four
million subscribers added every month for the past six months itself). They prefer
wireless services compared to wire-line services, which is evident from the fact that
while the wireless subscriber base has increased at 75 percent CAGR from 2001 to
2006, the wire-line subscriber base growth rate is negligible during the same period.
In fact, many customers are returning their wire-line phones to their service
providers as mobile provides a more attractive and competitive solution. The main
drivers for this trend are quick service delivery for mobile connections, affordable
pricing plans in the form of pre-paid cards and increased purchasing power among
the 18 to 40 years age group as well as sizeable middle class – a prime market for
this service.
Some of the positive impacts of this trend are as follows. According to a study, 18
percent of mobile users are willing to change their handsets every year to newer
models with more features, which is good news for the handset vendors. The other
impact is that while the operators have only limited options to generate additional
revenues through value-added services from wire-line services, the mobile operators
have numerous options to generate non-voice revenues from their customers.
Some examples of value-added services are ring tones download, coloured ring back
tones, talking SMS, mobisodes (a brief video programme episode designed for
mobile phone viewing) etc. Moreover, there exists great opportunity for content
developers to develop applications suitable for mobile users like mobile gaming,
location based services etc. On the negative side, there is an increased threat of

24
virus – spread through mobile data connections and Bluetooth technology – in mobile
phones, making them unusable at times. This is good news for anti-virus solution
providers, who will gain from this trend.

MERGERS

Demand for new spectrum as the industry grows and the fact the spectrum allocation
in done on the basis of number of subscribers will force companies to merge so as to
claim large number of subscribers to gain more spectrum as a precursor to the
launch of larger and expanded services. However it must also be noted that this may
very well never happen on account of low telecom penetration.

Constraints:

Slow pace of the reform process .

It would be difficult to make in-roads into the semi-rural and rural areas
because of the lack of infrastructure. The service providers have to incur a
huge initial fixed cost to make inroads into this market. Achieving break-even
under these circumstances may prove to be difficult.
The sector requires players with huge financial resources due to the above
mentioned constraint. Upfront entry fees and bank guarantees represent a
sizeable share of initial investments. While the criteria are important, it tends
to support the existing big and older players. Financing these requirements
require a little more liberal approach from the policy side.
Problem of limited spectrum availability and the issue of interconnection
charges between the private and state operators.

25
About Tata Communications

Tata Communications is a leading global provider of a new world of communications.

With a leadership position in emerging markets, Tata Communications leverages its
advanced solutions capabilities and domain expertise across its global and pan-India
network to deliver managed solutions to multi-national enterprises, service providers and
Indian consumers.

The Tata Global Network includes one of the most advanced and largest submarine cable
networks, a Tier-1 IP network, with connectivity to more than 200 countries across 400
PoPs, and nearly 1 million square feet of data center and colocation space worldwide.

Location
The company’s headquarters is in Mumbai, India, and it has significant international
operations in New Jersey, Montreal, Singapore and London. It has offices in 80 cities
across 40 countries. Tata Communications' depth and breadth of reach in emerging
markets includes leadership in Indian enterprise data services, leadership in global
international voice, and strategic investments in operators in South Africa (Neotel), Sri
Lanka (Tata Communications Lanka Limited), Nepal (United Telecom Limited), and
subject to approval by the Chinese government, China (China Enterprise
Communications)

.Tata Communications is a leading global provider of telecommunications solutions

serving the voice, data and next-generation service needs of carriers, enterprises and
consumers in over 30 countries.

Earlier known as Videsh Sanchar Nigam, the company became a part of the Tata Group
in 2002. In 2008, VSNL, VSNL International, Teleglobe, Tata Indicom Enterprise

26
Business Unit, VGSL and CIPRIS were brought under one global brand name – Tata
Communications. The company is now the number one global international wholesale
voice operator and India's largest provider of international long distance, enterprise data
and internet services in India.

Tata’s global network spans five continents and comprises major ownership in over
200,000 km of territorial network fibre and subsea cable capacity. The company has a
trans-Atlantic and trans-Pacific data transfer capacity of 1 trillion bits per second, a
global MPLS network and the world’s largest VoIP network.

Areas of business
The company extends its global reach to over 200 countries and territories with more than
300 PoPs and more than one million square feet data centre space worldwide.Its portfolio
covers:

Global voice solutions

Carrying over 20 bn minutes of traffic annually, the company's customer base includes
over 1500 carriers, mobile operators and ISPs. It provides value-added services such as
international toll free calls and account calling in addition to domestic and international
long distance calls. Services include:

• Voice termination services

• Mobile Direct
• VoIPLinkTM
• Global calling cards
• truerootsTM

Global data solutions

The company serves the connectivity needs of global enterprises and service providers
with solutions such as virtual private networks, global ethernet, managed data network
services, leased lines, etc. The company also offers customised industry specific solutions
and is the leading provider of bandwidth and IP connectivity. Services include:

• Global transmission services

• Global IP and VPN services
• Managed services
• Mobility services
• Transformation services

Joint ventures, subsidiaries, associates

• Tata Communications Lanka offers wholesale, enterprise and retail solutions

which include international voice services, international IP bandwidth for internet
service providers, international private lease circuit, MPLS-based global VPN
services, corporate voice services and their global calling card.

27
 • Tata Communications Banking InfraSolutions (TCBIL) offers solutions that
cater to the banking industry which include ATM services, card issuance and
management, end-to-end point of sale acquiring and hosted core banking.
• Tata Communications Transformations Services delivers end-to-end
outsourcing services for global carrier and telecommunications customers.
• Neotel (South Africa) provides a range of value-added voice and data services for
businesses, wholesale network operators, providers and consumers using its pure-
IP next generation network.
• Tata Communications Internet Services serves over 4,50,000 customers
offering services like broadband, Wi-Fi, dial up and a bouquet of value-added
services such as entertainment-on-demand, interactive education, net telephony,
PC security and website hosting.

KEY MEMBERS

Srinath Narasimhan
Managing Director & CEO, Tata Communications

Srinath Narasimhan is the Managing Director and CEO of Tata Communications

(formerly VSNL), part of the $62.5 billion Tata Group.

Mr. Srinath has over 20 years experience within the Tata Group, having held various
positions in project management, sales and marketing, as well as significant corporate
functions in several Tata companies. Mr. Srinath has been responsible for spearheading
new projects in high-technology areas such as process automation and control, computers
and telecommunications and was an instrumental figure early in the launch of the Tata
Group's CDMA services.

Mr. Srinath previously served as Executive Assistant to the Chairman for Tata Industries,
a position he held until 1992. He worked with a strategic team to set up Tata Information
Systems, which later became Tata IBM. Throughout his tenure here, he accepted a
number of assignments in sales and marketing.

In 1998, Mr. Srinath returned to Tata Industries as General Manager, Projects and worked
with Tata Teleservices in this capacity for a year. In 1999, he moved to Hyderabad as
Chief Operating Officer responsible for all the operations of Tata Teleservices. In late

28
2000, Mr. Srinath took over as Chief Executive Officer of Tata Internet Services, a
position he held until February 2002, when he moved to VSNL as Director (Operations).
He subsequently became Executive Director for VSNL.

In 2006, Mr. Srinath was honored with the Telecom Asia 'CEO of the Year' award in
recognition of his role in transforming VSNL from a domestic monopoly to a major
global telecommunications company in just four years. During this time, VSNL's
business model was reinvented and the company entered several new businesses, both in
India and abroad.

Mr. Srinath holds a degree in Mechanical Engineering from the Indian Institute of
Technology, Chennai and an MBA from the Indian Institute of Management, Kolkata,
specializing in marketing and systems.

Vinod Kumar
President and COO, Tata Communications

As President of Global Data & Mobility Solutions for Tata Communications, part of the
$62.5 billion Tata Group, Mr. Kumar is responsible for expanding Tata Communications'
roadmap and charter into the global communications market. Enhancing the service
capabilities and customer-facing activities in strategic markets beyond the shores of
India, in a nutshell, sums up his mandate.

In addition to heading these strategic initiatives, Mr. Kumar is also responsible for the
Wholesale Data, Global Mobile and International Enterprise lines of business, and for
meeting the company's ambitious targets. Mr. Kumar is also a Director on the Board of
Tata Communications Limited.

Mr. Kumar has a wide range of cross-functional experience in the telecommunications

industry. He also has an impressive track record in developing business strategies and
creating fast growth organizations.

He was previously Senior Vice President of Asia Netcom, responsible for all aspects of
generating top-line growth, including strategy formulation, product marketing and sales.
He was actively involved in all aspects of the financial restructuring and eventual asset
sale of Asia Global Crossing to China Netcom, resulting in the formation of Asia
Netcom.

In 1999, Mr. Kumar joined WorldCom Japan as Chief Executive Officer. Prior to that, he
held various senior positions at Global One in the United States and Asia where he had

29
major responsibilities in market management, sales, marketing, product management,
multinational account management, and operations.

Mr. Kumar graduated with honors in Electrical and Electronic Engineering at the Birla
Institute of Technology and Science in India.

Michel Guyot
President, Global Voice Solutions, Tata Communications

Michel Guyot is President, Global Voice Solutions for Tata Communications, part of the
$62.5 billion Tata Group. In this position, he is responsible for worldwide Voice
activities for the group, encompassing the management of domestic voice operations in
India.

Mr. Guyot has over 25 years of international telecommunications experience and has held
a number of key executive positions. Prior to taking on his current position, Mr. Guyot
was Teleglobe’s Vice-President of International Markets, responsible for the company’s
International Sales organization and commercial activities for Europe, the Middle East,
Africa and Asia-Pacific. Among other positions, Mr. Guyot has also served as
Teleglobe’s Executive Director of Marketing as well as Vice-President Europe.

He played a leading role when Teleglobe moved to a competitive environment in Canada

and was a key member of the executive team during the 2002 restructuring process as
well as during the integration process with Tata Communications.

Mr. Guyot is Chairman of the Board of Directors for the Telecommunications Executive
Management Institute of Canada, and has served as the Canadian Representative and
Council Member for Canada at the Commonwealth Telecommunications Organization.

He holds a Bachelor of Commerce Degree from L’École des Hautes Etudes

Commerciales, Université de Montréal, and is a member of the Certified General
Accounting Association of Canada.

30
Our People

Our global office holds talent from six continents. Our vast pool of expertise in the
communications and technology sectors embody our commitment to conduct ethical and
sustainable business. Tata Communications continues a tradition of developing and
deploying innovative solutions for existing and emerging markets worldwide. Our
international team reflects the dynamic and diverse market Tata Communications serves.

Our Values

Service and business at Tata Communications is guided by a commitment to ethical and

responsible conduct.

• Integrity: Trust travels

We must conduct our business fairly, with honesty and transparency. Everything
we do must stand the test of public scrutiny.

• Understanding: Open the world

We must be caring, show respect, compassion and humanity for our colleagues
and customers around the world, and always work for the benefit of the
communities we serve.

31
 Flexibility: Act agile
We work to create, design and grow in an environment that supports our customers
and people with adaptive thinking and action.

• Excellence: Go the distance

We must constantly strive to achieve the highest possible standards in our day-to-
day work and in the quality of the goods and services we provide.

• Unity: Journey as one

We must work cohesively with our colleagues across the Group and with our
customers and partners around the world, building strong relationships based on
tolerance, understanding and mutual cooperation.

• Responsibility: Advance life

We must continue to be responsible, sensitive to the countries, communities and
environments in which we work, always ensuring that what comes from the
people goes back to the people many times over.

Tata Communications introduced virtualized Unified Threat Management (vUTM) for

the first time in India. This firm is the first service provider in India to offer its customers
virtual UTM which integrates critical security functions including firewall, intrusion
detection and prevention, anti-virus, anti-spam, and Web content filtering as part of its
Managed Security Services portfolio. Tata Communications has partnered with Fortinet,
a pioneer and leading provider of UTM solutions, as the technology supplier for its
vUTM service.

This company’s vUTM customers can now look forward to increased network security
without having to invest in expensive on-premise security hardware. vUTM delivers the
features of a fully integrated multi-threat security UTM device in the network “cloud”,
enabling tremendous savings in recurring operational costs related to equipment
maintenance as well as reducing administration complexities.

“Businesses that depend on the Internet for operations are struggling to balance the need
to adequately address security issues with budget realities,” said Adam Rice, Vice
President of Global Managed Security Services for Tata Communications. “Tata
Communications’ vUTM service changes the whole cost equation by eliminating the cost

32
of customer premise equipment and providing monitoring and management services to
enhance the security value beyond what many enterprises are accustomed to. For
organizations with remote locations requiring secure Internet connectivity, our vUTM
service delivers high value and very low cost of ownership.”

vUTM is targeted at customers who require a secure Internet gateway with a preference
for a hosted security appliance instead of a self-procured and locally installed firewall in
their premises. The physical hardware based on Fortinet security technology is logically
partitioned into multiple virtual domains with each domain serving as a distinct firewall
with unique policies for that respective customer.

Commenting on the launch of vUTM services in India, Neenu Kumar, Research Analyst,
ICT Practice, Frost & Sullivan said, “Tata Communications’ vUTM offering is well
timed to meet the explosive growth in demand in India’s network security market, which
grew nearly 50% last year to approximately USD $160 million. UTM solutions are a
cost-effective, integrated approach for security companies’ networks as security threats
continue to increase in scope and sophistication, and knowledgeable IT staff continues to
be scarce and increasingly expensive.

The difficulties in recruiting and retaining skilled IT security staff make outsourcing to an
MSSP a logical and cost-effective option for small, medium, and large enterprises that
recognize the challenges of blocking the security threats that threaten network-based
business operations.”

Tata Communications’ vUTM service is fueled by four Fortinet’s FortiGate-5140 carrier-

class security systems, which provide a complete suite of security functions at multi-
gigabit performance. Each FortiGate-5140 chassis-based system provides virtual domains
(VDOMs), allowing Tata Communications to manage hundreds of customers from one
hardware platform and isolate the security services offered to each customer.

“With its new virtual UTM service offering, Tata Communications addresses an
increasing demand from enterprises to benefit from true value added services from their
telco providers,” said Patrice Perche, vice president of EMEA at Fortinet. “Our
FortiGate-5000 systems provide unique virtualization capabilities and carrier-grade
security that go beyond other security solutions. By leveraging our virtualized security
technology, Tata Communications will be able to offer strong and flexible security that
can scale to the current and future needs of its customers, thereby increasing the
profitability of their managed security service.”

Customers can rely on a single service provider for Internet and security, and have the
service provider take care of the equipment as well. This enterprise-class security
solution is well suited to secure remote offices of large organizations as it provides a
single solution for comprehensive protection and enables the IT organization (or an
MSSP) to centrally manage policies.

33
Initially, Tata Communications plans to offer the service in India only to existing IAS
(Internet Access Services formerly ILL) customers. This service will be extended to
Managed Hosting and Co-location customers in India as well as other regions in the near
future.

Using state-of-the-art technology, processes and tools, Tata Communications’ global

support team of industry veterans manage and monitor both premise-based and network-
based security solutions 24×7x365. Backed by aggressive, performance-based Service
Level Agreements (SLAs), this firm’s Managed Security Services support customers in
India and overseas.

Tata Group Profile

Tata is a rapidly growing business group based in India with significant international
operations. Revenues in 2007-08 are estimated at $62.5 billion (around Rs251,543 crore),
of which 61 per cent is from business outside India. The Group employs around 350,000
people worldwide. The Tata name has been respected in India for 140 years for its
adherence to strong values and business ethics.

The business operations of the Tata Group currently encompass seven business sectors:
communications and information technology, engineering, materials, services, energy,
consumer products and chemicals. The Group's 27 publicly listed enterprises have a
combined market capitalisation of some $60 billion, among the highest among Indian
business houses, and a shareholder base of 3.2 million. The major companies in the
Group include Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power,
Tata Chemicals, Tata Tea, Indian Hotels and Tata Communications.

The Group's major companies are beginning to be counted globally. Tata Steel became
the sixth largest steel maker in the world after it acquired Corus. Tata Motors is among
the top five commercial vehicle manufacturers in the world and has recently acquired
Jaguar and Land Rover. TCS is a leading global software company, with delivery centres
in the US, UK, Hungary, Brazil, Uruguay and China, besides India. Tata Tea is the
second largest branded tea company in the world, through its UK-based subsidiary
Tetley. Tata Chemicals is the world's second largest manufacturer of soda ash. Tata
Communications is one of the world's largest wholesale voice carriers.

34
In tandem with the increasing international footprint of its companies, the Group is also
gaining international recognition. Brand Finance, a UK-based consultancy firm, recently
valued the Tata brand at $11.4 billion and ranked it 57th amongst the Top 100 brands in
the world. Businessweek ranked the Group sixth amongst the "World's Most Innovative
Companies" and the Reputation Institute, USA, recently rated it as the "World's Sixth
Most Reputed Firm."

Founded by Jamsetji Tata in 1868, the Tata Group's early years were inspired by the
spirit of nationalism. The Group pioneered several industries of national importance in
India: steel, power, hospitality and airlines. In more recent times, the Tata Group's
pioneering spirit has been showcased by companies like Tata Consultancy Services,
India's first software company, which pioneered the international delivery model, and
Tata Motors, which made India's first indigenously developed car, the Indica, in 1998 and
recently unveiled the world's lowest-cost car, the Tata Nano, for commercial launch by
end of 2008.

The Tata Group has always believed in returning wealth to the society it serves. Two-
thirds of the equity of Tata Sons, the Tata Group's promoter company, is held by
philanthropic trusts which have created national institutions in science and technology,
medical research, social studies and the performing arts. The trusts also provide aid and
assistance to NGOs in the areas of education, healthcare and livelihoods. Tata companies
also extend social welfare activities to communities around their industrial units. The
combined development-related expenditure of the Trusts and the companies amounts to
around 4 per cent of the Group's net profits.

Going forward, the Group is focusing on new technologies and innovation to drive its
business in India and internationally. The Nano car is one example, as is the Eka
supercomputer (developed by another Tata company), which in 2008 is ranked the
world's fourth fastest. The Group aims to build a series of world class, world scale
businesses in select sectors. Anchored in India and wedded to its traditional values and
strong ethics, the Group is building a multinational business which will achieve growth
through excellence and innovation, while balancing the interests of its shareholders, its
employees and wider society.

Tata Group Commitment

From customer to community, the Tata Group invests in resources for the various
markets and communities it serves. The Tata Group's philanthropic trusts and global
community initiatives develop and sustain services that promote health and education,
leadership and technical training, and arts and sports programs.

35
Conducting good business is always good for business. To best serve our customers, we
must advance our commitment to corporate sustainability (CS). Our principles of
Corporate Sustainability are based on the premise of creating collective value for
enhancing human, natural, social and financial capital. It seeks to demonstrate
accountability to all stakeholders, and communicates a fundamental belief in the
equilibrium of people, planet and profit. We believe that connecting with initiatives that

greatly impact people and the environment enriches the lives of others and the lives of
our employees.

To leave a positive mark on the world, Tata Communications believes we must grow and
nurture new resources for our communities while protecting and conserving our existing
resources.

Grow and Nurture

Advancing life is about more than technology, it requires individual investment in the
communities in which we live and conduct our business. Our global team at Tata
Communications rolls up its sleeves to participate in initiatives that nurture and sustain
people and the environment.

Protect and Conserve

To truly give back, Tata Communications believes we must also work toward "taking
less."
Our commitment to developing "green technology" initiatives that conserve energy is
unwavering. These initiatives enable our customers worldwide to leverage our
communications solutions to reduce their company's carbon footprint.

Key Initiatives

Health and Wellness

Our global team participates in initiatives aimed at providing outreach and care to
homeless children and children living with HIV and AIDS.

Literacy and Education

Opening a new world of communications begins by opening up access to a world of
information and opportunity. Our company, along with six other companies in the Tata
Group, offers children from low-income families the opportunity to read and own their
own books. Tata Communications and First Book donate thousands of new books to help
cultivate the imaginations of low-income children.

Sustainable Livelihood
Apart from health and education initiatives, Sustainable Livelihood is one of the

36
important focus areas of our Community Outreach Programme. It aims at building trust,
imparting skills, creating capacities and improving the quality of life for communities
across the globe. The delivery model is based on multi-stakeholder partnerships with
national governments and non-profit organizations to identify beneficiaries, provide
vocational training and implement sustainable income generating mechanisms for the
socio-economically disadvantaged.

Environmental Clean-up Projects

Recognizing the importance of protecting nature, employee volunteers participate in
environmental clean-up initiatives with children. The project enables our team to connect
with and educate young people about the vital need to protect our environment.

CO2 Emissions Reduction

Helping customers to decrease their reliance on business travel reduces CO2 emission
rates. The Tata Communications Telepresence Exchange service leverages technology to
provide companies with a virtual meeting space that is a cost-effective and
environmentally responsible alternative to business travel. A growing number of
enterprises leverage our Telepresence Exchange service to conduct virtual business
meetings and reduce company costs and CO2 emission rates.

KEY ACHIEVEMENTS

18 November 08

Tata Communications Awarded "Best Market Strategy" at the 2008 Capacity

magazine Global Wholesale Telecommunications Awards

4 November 08

Tata Communications Strengthens MPLS Footprint in South East Asia

29 October 08

Tata Communications Spearheads First Security Compliance Consortium to

Address Monetary Authority of Singapore (MAS) Guidelines

23 October 08

Tata Communications introduces Virtualized Unified Threat Management

37
(vUTM) for the first time in India

15 October 08

Tata Communications First to Launch Cisco TelePresence Rooms for Public

Use.

1 October 08

Tata Communications and Arbor Networks Receive 2008 Telephony Innovation

Award for Most Innovative Managed Service

29 September 08

Tata Communications Extends MPLS Connectivity to the Middle East

23 September 08

Tata Communications Receives Two Global Telecoms Business Innovation

Awards

11 September 08

Tata Communications Launches Global VPN Extended Access Service in Over

150 Countries

10 September 08

Tata Communications Awarded Cisco® Powered Managed Security and

Managed Connectivity Designations

8 September 08

Tata Communications Launches Global Content Delivery Network Service

Powered By BitGravity

25 August 08

Tata Communications Launches Work From Home services in India

38
12 August 08

Tata Communications Receives ISO 27001 Certification for Managed Security

Services

01 July 08

Tata Communications Launches Telepresence Services Worldwide

24 June 08

Tata Communications to Acquire Majority Stake in Neotel

18 June 08

Signs Equity Joint Venture Agreement with Shareholders of China Enterprise

Communications Limited

10 June 08

Tata Communications Expands Connectivity to Africa

27 May 08

Etisalat and Tata Communications to Deliver World Class Communication

Services in the UAE

15 May 08

VSNL Lanka is now Tata Communications Lanka Limited

29 April 08

CII announces collaboration with Tata Communications and Cisco to set up

TelePresence

for CII offices in India

39
23 April 08

Introduces Global Suite of Security Services

14 April 08

Expands VPN Services to Egypt

19 March 08

Tata Communications Launches Cisco® Certified TelePresence Connection

Services Globally

26 February 08

Tata Communications Expands Global VPN Services to China Through

Partnership with China Entercom

13 February 08

Tata Communications Launches Worldwide

01 February 08

VSNL Restores Internet Services within 24 Hours Following

Egypt Submarine Cable Break

19 December 07

Construction of $250 million express TGN Eurasia Cable

System linking Mumbai directly to Paris, London and Madrid via

Egypt begins

05 December 07

Named the 'Best Wholesale Carrier' at the 2007 Telecoms World

Awards, Middle East

14 November 07

40
Awarded 'Best Pan Asian Wholesale Provider' at the 2007

Capacity Magazine Global Wholesale Telecommunications

Awards for Second Consecutive Year.

1 November 07

Construction of its U.S. $200 million TGN Intra Asia Cable

System linking Singapore, Hong Kong and Japan begins

31 July 07

Introduces next generation Dedicated Global Ethernet Service for the

Australian Market

25 June 07

Becomes the first global Ethernet provider to receive MEF14 &

MEF 9 Certification

13 June 07

Launches Global Managed Hosting & Storing solution, providing

a cost effective, outsourced IT infrastructure for enterprises

23 May 07

Skype selects Teleglobe voice termination services to provide call

termination for SkypeOut™

07 February 07

Cable & Wireless Panama selects Teleglobe Content Service for it

comprehensive mobile content delivery platform

16 January 07

41
CIPRIS, a New Division to provide International Communication

Services to Mid-Market Enterprises across Europe

04 December 06

Yahoo! chooses Teleglobe voice peering and termination

services to exchange high quality VoIP traffic on a global basis

21 November 06

Receives the 'Best Pan Asian Wholesale Provider' award at the

4th annual Capacity Magazine Global Wholesale

Telecommunications Awards

13 November 06

Awarded 'Best Wholesale Carrier' at the 2006 World

Communication Awards

17 October 06

Completes major 10 gig IP backbone upgrade throughout U.S.,

Europe and Canada.

8 June 06

Unveils a next generation Dedicated Global Ethernet Service

13 February 06

Completes acquisition of Teleglobe

Tata Communications, a member of the $62.5 billion Tata Group, is a leading global
provider of a new world of communications. The emerging markets communications
leader leverages its advanced solutions capabilities and domain expertise across its global
and pan-India network to deliver managed solutions to multi-national and Indian

42
enterprises, service providers and Indian consumers.

Tata Communications’ range of services include transmission, IP, converged voice,

mobility, managed network connectivity, hosting and storage, managed security,
managed collaboration and business transformation for global enterprises and service
providers, as well as Internet, retail broadband and content services for Indian consumers.
The Tata Global Network encompasses one of the most advanced and largest submarine
cable networks, a Tier-1 IP network, with connectivity to more than 200 countries across
300 Pops, and more than 1 million square feet of data center and co-location facilities.

Tata Communications’ unique emerging market depth and breadth of reach includes a
national fiber backbone network and access to network in over 60 cities and 125 Pops in
India, strategic investments in South African converged services operator, Neotel, Sri
Lanka and Nepal and, subject to fulfillment of conditions precedent, a 50% ownership in
China Enterprise Communications (CEC) providing full country VPN coverage in China.

Servicing customers from its offices in over 80 cities in 40 countries, Tata

Communications is the number one global international wholesale voice operator and
number one provider of international long distance, enterprise data and Internet services
in India, the Company was named "Best Wholesale Carrier" at the World
Communications Awards in 2006, "Best Pan-Asian Wholesale Provider" at the 2006 and
2007 Capacity Magazine Global Wholesale Telecommunications Awards and was
awarded "Best Progress in Emerging Markets" at the 2008 Mobile Communication
Awards

Tata Communications Limited along with its global subsidiaries (Tata Communications)
is a leading global provider of the new world of communications. The company leverages
its Tata Global Network, vertical intelligence and leadership in emerging markets, to
deliver value-driven, globally managed solutions to the Fortune 1000 and mid-sized
enterprises, service providers and consumers.

The Tata Communications portfolio includes transmission, IP, converged voice, mobility,
managed network connectivity, hosted data center, communications solutions and
business transformation services to global and Indian enterprises & service providers as
well as, broadband and content services to Indian consumers. The Tata Global Network
encompasses one of the most advanced and largest submarine cable networks, a Tier-1 IP
network, connectivity to more than 200 countries across 300 PoPs and more than one
million square feet data center space. Tata Communications serves its customers from its
offices in 80 cities in 40 countries worldwide. Tata Communications has a strategic
investment in South African operator Neotel, providing the company with a strong
anchor to build an African footprint

The number one global international wholesale voice operator and number one provider
of International Long Distance, Enterprise Data and Internet Services in India, the

43
company was named "Best Wholesale Carrier" at the World Communications Awards in
2006 and was named the "Best Pan-Asian Wholesale Provider" at the 2007 Capacity
Magazine Global Wholesale Telecommunications Awards for the second consecutive
year.

Financial Statement

2006-07 2005-06
Year % change
(Rs crore) (Rs crore)
Total revenue 129,994 96,723 34.4

Sales 128,377 94,714 35.5

Profit before tax 17,861 13,375 33.5

Profit after tax 12,574 9,461 32.9

Total assets 113,573 79,766 42.4

International revenues (including

48,730 29,636 64.4
exports)

Total shareholders 2,923,688 2,302,446 27

Financial year is April-March

44
 Exchange rate: USD=Rs40.24 for 2007-08 and USD=Rs45.12 for 2006-07.
Sales figures for group companies are consolidated and net of excise duty (wherever
applicable)

Group's capital market performance

Shares of the Tata group companies have been among the star performers on the Indian
stock market over the last three years. Trends in the group's total market capitalisation
along with aggregate market capitalisation of Bombay Stock Exchange are provided
below.

2009
2006 2007 2008
(Rs crore)
(Rs crore) (Rs crore) (Rs crore)
(As on Aug
(End March) (End March) (End March)
27)
222,880 230,620 237,961 252,560
Tata group
($50.0 bn) ($52.9 bn) ($59.0 bn) ($51.62 bn)

3,022,189 3,555,973 5,138,015 5,308,905

BSE
($677.5 bn) ($815.8 bn) ($1273.0 bn) ($1,085 bn)
With the listing of TCS on August 25, 2004, the total market capitalisation of the group's
27 listed companies crossed the Rs100,000 crore mark and the group acquired the
distinction of having the highest market capitalisation among all business houses in the
country, both in the public and private sectors.

Tata group accounts for 4.8 per cent of the total market capitalisation of BSE.
Tata group companies have contributed significantly to the spread of equity cult in the
country. They enjoy the trust of over 3.5 million investors
Figures within the bracket are in US $ billion.

Sector-wise human resources profile

Sectors 2007-08* % share

Materials 82,801 26
Engineering 56,500 18
Energy 3,763 1
Consumer goods 15,569 5
Chemicals 6,322 2
Communications and information systems 126,906 40
Services 26,747 8

45
Total 318,608 100.0
* Employee break-up excludes Corus and hence the
figures do not add up to the total.

Employment profile
Personnel 2007-08*
White-collar employees 186,854
Engineers 82,251
Postgraduates 31,001
MBAs 10,932
Others 62,670
Blue-collar employees 87,864
Total employment 318,608

Social welfare & environment related projects

2007-08
Year (US$
million)
Social welfare projects 31.7
Environmental projects 58.8
Others 1.8
Total 92.3

Contribution to the exchequer — 2007-08

Tata Group Government

% change
companies finances
of Tatas
(US $ million) (US $ million)
Corporate tax 1,172 32,468 3.6

Excise# 1,837 32,535 5.6

Customs 324 18,129 1.8

46
Sales tax 1,190 35,668 3.3

Others 383 10,482 3.7

Total 4,906 129,282 3.8

What is Wimax ?

Wimax is the acronym of Wireless Interoperability for Microwave Access. Today Wimax is
used to provide Internet access for both fixed antenna and mobile devices, it’s a better way to
spread Internet by air, so areas where there is no ADSL can now have access to high data
transfer rate. For example small mountains and valley villages which are in a no-High Speed
Internet zone and hardly reachable with cable can now benefit of broadband wireless access.
In Libya Wimax is used also for mobile access, you can move with your laptop and still be
connected to Internet in a range of 50km.

Wireless interoperable microwave access (WiMax) is the latest standard in fixed and
portable wireless broadband access system. This standard emerged out of a perfect
convergence of the market need and technological standard in the wireless domain.
WiMax is a benchmark solution for wireless metropolitan area network (WMAN) as
against Wi-Fi that caters to the wireless local area network (WLAN). WiMax also has
several advantages such as the polling architecture, dynamically adaptable modulation,
and built-in quality of service (QoS) exclusively for voice and data, and can use both
licensed and unlicensed frequency bands.

Wimax can be used in many ways to provide Internet access:

Base station Internet network
Fixed antenna access (home, company)
Mobile access
Wi-Fi hotspots WiMax

47
Background
Here is a definition of the main concepts concerning wireless technology.

Modulation is “the process of varying a periodic waveform, i.e. a tone, in order to use that
signal to convey a message, in a similar fashion as a musician may modulate the tone from a
musical instrument by varying its volume, timing and pitch. Normally a high-frequency
sinusoid waveform is used as carrier signal. The three key parameters of a sine wave are its
amplitude ("volume"), its phase ("timing") and its frequency ("pitch"), all of which can be
modified in accordance with a low frequency information signal to obtain the modulated
signal”. Error correction codes are codes used for detecting and correcting errors, as it is said
in . It enables the receiver to correct errors in an incoming transmission on the basis of the
bits in that transmission.
On the transmission end each k-bit block of data is mapped into an n-bit block (n > k) called a
codeword, using an FEC (Forward Error Correction) encoder. The codeword is then
transmitted. During transmission, the signal is subject to noise which may produce bit errors
in the signal. At the receiver, the incoming signal is demodulated to produce a bit string that
is similar to the original codeword but may contain errors. This block is passed through
an FEC decoder, with one of four possible outcomes:
1. If there are no bit errors, the input to the FEC decoder is identical to the original codeword,
and the decoder produces the original data block as output.
2. For certain error patterns it is possible for the decoder to detect and correct those errors.
Thus,
even though the incoming data block differs from the transmitted codeword, the FEC decoder
is able to map this block into the original data block.
3. For certain errors patterns, the decoder can detect but not correct the errors. In this case,
the
decoder simply reports an uncorrectable error.
4. For certain, typically rare, error patterns, the decoder does not detect that any errors have
occurred and maps the incoming n-bit data block into a k-bit block that differs from the
original k-bit block.[1]
Bandwidth is the difference in Hertz between the limiting (upper and lower) frequencies of a
spectrum. Multiplexing (TDM, FDM and CDM) in data transmission is a function that
permits two or more data sources to share a common transmission medium such that each
data source has its own
channel.
The Institute of Electrical and Electronics Engineers Standards Association (IEEE-SA) is a
leading developer of global industry standards in a broad-range of industries. IEEE-SA has
developed standards for over a century, through a program that offers balance, openness, due
process and consensus. Technical experts from all over the world participate in the
development of IEEE standards. Each year, the IEEE-SA conducts over 200 standards
ballots, a process by which proposed standards are voted upon for technical reliability and
soundness

48
WiMAX system consists of two parts:

 A WiMAX tower, similar in concept to a cell-phone tower - A single WiMAX

tower can provide coverage to a very large area – such one tower can support 800
customers with 30MB bandwidth.

 A WiMAX receiver - The receiver and antenna could be a small box or PCMCIA
card, or they could be built into a laptop the way WiFi access is today .

WIMAX SET – UP :-

49
A Wi-Max Tower can be connected following ways

 Connected directly to the Internet using a high-bandwidth, fiber / wired

connection
 Connected to another WiMAX tower using a line-of-sight, microwave
link.

WIMAX TECHNOLOGIES

The standard for Wimax is 802.16 protocol family, which was intended for Wireless links.
IEEE 802.16 is associated with Local Multipoint Distribution Service (LMDS) to standardize
the air interface and related functions. The 802.16 physical layer supports a different
structure for the point-to-multipoint downstream channels and the multipoint-to-point
upstream channels. These structures reflect the different requirements in the two directions.
In general, most systems will require greater downstream capacity to individual subscribers

50
to support asymmetric data connections such as Web applications over the Internet. For the
upstream direction, the issue of medium access needs to be addressed, because there are a
number of subscribers competing for the available capacity. These requirements are reflected
in the physical layer specification.
The last standard specification IEEE 802.16e specifies new techniques for mobile and has
been released on 2005. Next figure explains characteristics of the two standards.

Upstream and downstream transmission

Upstream transmission uses a DAMA-TDMA (demand assignment multiple access-time
division multiple access) technique. DAMA is a capacity assignment technique that adapts as
needed to optimally respond to demand changes among the multiple stations. TDMA is
simply the technique of dividing time on a channel into a sequence of frames, each consisting
of a number of slots, and allocating one or more slots per frame to form a logical channel.
With DAMA-TDMA, the assignment of slots to channels varies dynamically. Upstream
transmission makes use of Reed-Solomon code for error correction and a modulation scheme
based on QPSK.
In the downstream direction, the standard specifies two modes of operation, one targeted to
support a continuous transmission stream (mode A), such as audio or video, and one targeted
to support a burst transmission stream (mode B), such as IP-based traffic.
For the continuous downstream mode, a simple TDM scheme is used for channel access. The
duplexing technique that is used for allocating capacity between upstream and downstream
traffic is known as FDD (Frequency Division Duplex). FDD simply means that a different
frequency band is used for transmission in each direction. This is equivalent to a FAMA-
FDMA (fixed assignment multiple access-frequency division multiple access) scheme. FDD
implies that all subscribers can transmit and receive simultaneously, each on their own
assigned frequencies. For the burst downstream mode, the DAMA-TDMA scheme is used for
channel access. Three alternative techniques are available for duplexing traffic between
upstream and downstream:

WiMax Fixed :

FDD with adaptive modulation: This is the same FDD scheme as used in the upstream
mode, but with a dinamyc capability to change the modulation and forward error correction
schemes.

Frequency shift division duplexing (FSDD): This is similar to FDD, but some or all of the
subscribers are not capable of transmitting and receiving simultaneously.
Time division duplexing (TDD): A TDMA frame is used, with part of the time allocated
for upstream transmission and part for downstream transmission.

OFDM
OFDM uses multiple sub-carriers that are closely spaced to each other without causing any

51
interference, removes guard bands between adjacent sub-carriers. It is makeable thanks to the
frequencies (sub-carriers) are orthogonal, it means the peak of one sub-carrier is with the null
of an adjacent sub-carrier .
OFDM systems use a very high rate data stream divided into multiple parallel low rate data
streams.
Smaller data streams are mapped to individual data sub-carrier and modulated using PSK
(Phase Shift Keying) or QAM (Quadrature Amplitude Modulation): BPSK, QPSK, 16-QAM,
64-QAM .
OFDM needs less bandwidth than FDM to carry the same amount of information which leads
to higher spectral efficiency. An OFDM system such as WiMax is more efficient in NLOS
environment. It can greatly cancel interference, and frequency-selective fading caused by
multipath.
Equalizing is done on a subset of sub-carriers instead of a single broader carrier. ISI’s effect
(Inter Symbol Interference) is suppressed by a longer symbol period of the parallel OFDM
sub-carriers than a single carrier system and a cyclic prefix is used .

Orthogonal Frequency Division Multiple Access (OFDMA)

OFDMA uses multiple closely spaced sub-carriers, divided into groups of sub-carriers.
Groups are called a sub-channel. The sub-carriers that make a sub-channel do not need to be
adjacent. In downlink, a sub-channel might be intended for different receivers. In the uplink,
a transmitter might be assigned one or more sub-channels.
Subscriber stations (SSs) are allocated to sub-channels defined by sub channelization
depending on channel conditions and data requirements. A Mobile WiMax Base Station (BS)
provides sub channelization, but in a way accorded to the level of SNR (Signal-to-Noise
Ratio). If this level is low it can provides more transmit power to user devices in the same
time slot, on the other hand if it is high can provides less transmit power to user devices. For
indoor subscriber the Base Station can allocate higher power to sub-channels and in this way
results better coverage for building
For devices supplied by batteries, WiMax base stations can also use a power-saving
feature that allow them to divide power between sub-channels, feature especially used for
Mobile WiMax.

WiMax Basestation:

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 In the area of wireless computer networking, a base station is a
radio receiver/transmitter that serves as the hub of the local wireless network, and may
also be the gateway between a wired network and the wireless network. It typically
consists of a low-power transmitter and wireless router. They are made up of three main
elements:

1. An antenna (or several antennas) to send and receive radio signals. These are
typically between 0.5 and 2.5 metres long
2. A supporting structure such as a mast or building to hold the antenna(s) in the air
3. Equipment to power the base station and radio equipment, which is housed in
protective cabinets.

Base stations are connected to each other by cables or wireless technology such as
microwave dishes, to create a network.

WiMAX works on:

Non-line-of-sight, WiFi sort of service, where a small antenna on your computer

connects to the tower. In this mode, WiMAX uses a lower frequency range -- 2 GHz to
11 GHz (similar to WiFi). Lower-wavelength transmissions are not as easily disrupted by
physical obstructions -- they are better able to diffract, or bend, around obstacles

Wi-Fi:

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Wi-Fi in short for Wireless Fidelity is a set standard in the wireless domain based on
IEEE 802.11 specifications. In simple terms it allows a user to connect to the local area
network and also have access to the internet without any wires connected to the
computer. It is faster than a typical cable modem connection hence giving all the
flexibility that the user needs in terms of connectivity and bandwidth. However, Wi-Fi
has its own disadvantages in terms of the distance, line of sight, bandwidth management,
etc.

Why WiMax and Not Wi-Fi?

The Wi-Fi bandwagon is faced with a few issues such as line-of-sight, limited distance
coverage despite the use of high-gain antennas, and internal bandwidth management. Wi-
Fi is found wanting in terms of serving the latest demands. Conversely, WiMax is a
globally accepted, technically capable, and industry-wide supported standard. The
emergence of WiMax has opened up the solution to many of the problems faced by Wi-Fi
because, WiMax uses non-line-of-sight standard and can cover tens of miles unlike Wi-Fi
that is restrictive to the surroundings and resources. WiMax complements Wi-Fi because
it uses the same Logical Link Controller standard (IEEE 802.2) that enables both bridging
and routing. It is also compatible to the existing Wi-Fi hotspots to the internet and also
provides wireless solution for last mile access to cable and DSL. This is a tremendous
advantage that WiMax has in order to capture the market.

What is market research?

The Market Research Society defines market research as the 'means used by those who
provide goods and services to keep themselves in touch with the needs and wants of

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 those who buy and use those goods and services'.
Market research is a cost-effective way of finding out what people believe, think,
want or need to do. It is the collection and analysis of data from a sample of
individuals or organizations relating to their characteristics, behavior, attitudes,
opinions or possessions. Essentially, by talking to a small proportion of people you
can find out about a far larger number.

Market research can help you to:

· Test new concepts;
· Assess your customer needs and their reaction to your product or your competitors'
products;
· Learn about and monitor customer satisfaction with, for instance, your attraction, a
holiday destination, services etc.;
· Learn about and monitor your employees' satisfaction with their roles;
· Target your marketing more effectively, especially identifying your key customer
segments;
· Provide background information to support business planning and investment decisions;
· Flag up potential strengths and weaknesses in your business.

How is research carried out ?

There are two main types of market research data:
· Qualitative
· Quantitative

Qualitative research does not measure things; it is about understanding things. It answers
questions such as 'what', 'why' and 'how', but it cannot answer the question 'how many'.
Qualitative research is the way in which people's attitudes and beliefs can be explored
and ideas can be generated. Often, qualitative research is used for testing people's
reactions to a potential new advertising campaign, or exploring people's attitudes to a
product.

Quantitative research is designed to provides us with answers to 'how many' and 'to what
extent' questions. Here it is important to gain an accurate viewpoint of the target
population, and so these projects typically involve large scale surveys using sampling
techniques and standardised questionnaire materials.

Although these two methods can be used alone, in practice it is often necessary to
conduct both qualitative and quantitative consultations on a given subject. For example,
an initial qualitative stage may help us to find out what we should be asking respondents
in a survey, or conducted afterwards can help to explain the underlying reasons for some
survey results.

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The most commonly used methods are:
· In-depth interviews, usually unstructured interviews (no predetermined questions)
based upon a topic or themes. The interviewer interacts with the person involved in the
discussion and encourages him to freely express his thoughts on a product or subject of
interest.

· Focus groups or group discussions are similar to in-depth interviews due to the fact
that they are unstructured, but bring together a number of relevant respondents, typically
between eight and twelve. Led by a moderator, the main role of a focus group is to learn
and understand what people have to say about a topic and understand their reasoning.
Participants in focus groups are also usually asked to discuss how they feel about a
product or organisation, concept or idea and how this forms part of their lives. Focus
group participants are often chosen because of common backgrounds or experience on
the topic under discussion.

Data

Data can be classified as either primary or secondary. Primary data is usually collected
first hand for a specific market research project.Examples of primary data collection
are:

· Face-to-face interviewing, with a pre-designed questionnaire, either in the street,

at the business premises or in people's homes. Face-to-face interviews take less time
than postal surveys but are slower than telephone research in terms of setting up and
carrying out the research. The biggest disadvantage of face-to-face interviewing is
cost.

· Research by telephone is a fast-growing form of data collection, that is usually

less expensive per interview than face-to-face and can provide data more quickly.
Telephone research is not suitable for lengthy interviews but is ideal for smaller-
scale, fast turn-around projects.

· Postal and self-completion research is the cheapest form of quantitative research,

although it can take a relatively long time to collect data by post. Self-completion
questionnaires must be kept simple and the researcher has little control over who
completes the form, how many people return the form, or how accurately the given
information is.

· Omnibus surveys are useful for businesses with small budgets and relatively few
questions to ask because questions can be 'piggy-backed' on to a larger survey. Data
is collected at a lower cost than for a stand-alone project.

Secondary data, however, is already in existence, usually from published sources

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 but has not been collected in direct response to a problem that has arisen. Useful
sources of secondary data include published statistics and research reports by
organisations such as Mintel, Keynotes, the Dorset Tourism Data Project, the
Southern Tourist Board, Southwest Tourism, the British Tourist Authority and
English Tourism Council, trade journals, government published statistics (via your
local authority or the Office for National Statistics) and magazines or newspaper
articles.

Objective of The Project :-

The main objectives of the projects are as :

1 .To gain knowledge about the Wimax.

2. To find the potential customers for Wimax in Delhi , Noida , Ghaziabad &
Gurgaon.

3. To know the importance of market survey .

4. To get experience about how to handle employees doing field work or surveys.

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 Questionnaire For Collecting Data

Total
No. of
Flats / Minimum
Total
Grid Total Rentals/Total
Name Address Type No. of A B C D E competitor
/Polygon no. of Building
Floors
Units in Office Space
the
Building

J4 - A R.k.sons G.k. Comm.

Where Grid is the name given to particular area of 4 km in a map and this grid is further
divided into 8 sub parts of 0.5 km . For e.g. karol bagh area’s map has been given name
J4 which is called Grid and it is divided into 8 parts from A- H known as Polygon. The
grids has been made because karol bagh area is more than 10 km range and covering such
a big area with single map can give lot of errors and take lot of time.

Name represents the name of house building or shop building , whatever, it is.

Address here represents just the nearby landmark of the building or the name of area
where survey is to be conducted, not the actual building address.

Type means the building under survey , whether , it is residential or commercial or both.

Min. rental means the minimum rent paid by the person for one flat in a building of
particular area.

Total building office space is the area of office

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Total no. of units in building represents how many different offices are operating in a
particular building of an area.

A – E represents the category of commercial i.e. in which category the office falls. Like
A category has IT, BPO , KPO offices. B category Includes Banks , Mutual Funds etc.
C category has manufacturing units, D has Logistics , general store & E includes
advertising agencies, technical education institute.
Rentals have been also classified into 5 types.
Type 1st – rental above Rs. 40000
Type 2nd – rental between 25 k to 40 k
Type 3rd – rental value between 10 k to 25 k.
Type 4th – rents between 5 k to 10 k.
Type 5th – rental below 5k.

Competitors were the local or other broadband providers in the area. In delhi ,the internet
service provider who leads the race is Mtnl , while airtel is 2nd choice and reliance and
other fills the remaining area.

The grid/ polygon, building no. , and address of the place related details were provided in
the excel sheets while rest of the data was needed to be surveyed by the agencies hired by
the company and these agencies are working under the summer trainees.

The data collection method used is primary because all the data collected is directly by
the field boys and there were no previous findings which were used to fill the
questionnaire.

The research methodology method used is the random sampling. The small sample of
data collected by the field boys were choosen and was beind cross checked by the
summer trainees to check out the accuracy , errors and inefficiency of the hired agencies.

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According to Survey Report , Following Broadband providers enjoys the Customer
support in Connaught place in New Delhi

Survey of rental value of flats in connaught place :

45
40
35
30
Mtnl
25
Reliance &60 20
others 15
Airtel 50 10
5
40 60

0
As connaught place is one of the busiest market in delhi and very lively place , so the
rental values of all the flats in its area is almost under type 1st and type 2nd and few under
type 3rd. there is no space for flats having rental type 4th and 5th. So it can be considered as
one of the area where potential customer for Wimax can be look after.

Audit Report Presented To Tata Communications on Survey :

There were some excel sheets where there were lot of mistakes while filling
questionnaire which we have sorted out and some other factors due to which work is not
getting done properly . So we have to make some rule and gave instructions to team
members to follow those strictly.

Data where too much error is recorded:

S.No. Map no.

5917 to 8109 J4C
4189 to 5162 J4C
1265 to 1480 J4E

How performance was increased or Suggestions:

1. Ist reason for less average of team was irregularity of team members. Gave instruction
to team leader and their boys to be in field at exact 10:30 a.m.and to leave at 6:00 p.m.

2. Told team leader to arrange photocopy of maps in evening , so there is no wastage of

time in next morning.
3. Told team leader to be strict with his boys and not to be too frank.

4. Told the team to note the readings direct in fair sheet , don't consume time by noting
the entries in rough sheet first.
5. Given direction to team leader not to send more than two boys on one map.

6. Told them to take their lunch with them in the area they are going.

7. Told team leader to raise the performance of his team and motivate them to increase
their average daily by 50.

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Limitations :

1. Lot of time was wasted by giving field boys rough sheet to note the entries.

2. The landmark given in some maps not appropriate , which leads to waste of time in the
field.
3. In some maps, one building having shops in all floors, were alloted different id's which
leads to confusion in the minds of field guys

Notes

1. Have checked data entry daily in the evening time , to find out the faults in entry and
correct them at that very time. So that accuracy level of data entry increases as it is low at
start
The accuracy data above shown is the data collected by the boys but in the
evening that data is corrected so there would be change in accuracy by almost 15 - 20 %
in some cases.

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Recommendations For Wimax:

WiMAX will play a critical role in the broadband wireless revolution due to a number of
its inherent strengths

•Cost-effectiveness. Construction costs for a cabled infrastructure are usually high. The
total costs associated with a WiMAX solution are lower than those of most other
broadband cable solutions.

•Fast deployment. A WiMAX-based solution can be deployed faster than most cable
solutions. Once a base station is installed and operating, subscribers can be connected
very quickly.

•Small size and low power. WiMAX base station equipment is generally small, with low
power requirements. Existing buildings and cell phone sites can often be used. Power
back up is relatively easy to implement.
Although a degree of inevitable hype has accompanied the development of WiMAX, it is
clearly an important part of the broadband future. Standardization under WiMAX
technologies can stimulate the fixed wireless market forward, reduce costs and bring
broadband access to millions of people around the world who do not currently have
access to DSL or cable.

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BIBLIOGRAPHY

1. www.tatacommunications.com

2. www.wimaxforum.org

3. www.mobilinkinfinity.com

4. Research Methodology – C.R. Kothari

5. http://www.maravedis-bwa.com/wimax.asp

6. www.ibef.org/industry/telecommunications.aspx

7. http://www.tatacommunications.com/news/release-view.asp?d=20080423-security

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