Market Overview

India is one of the biggest telecom markets in the world with 671.69 million subscriber
base. It is estimated to reach 700 million by 2012.
Telecom sector attracted US$ 8.8 billion between 2000 to 2010.
The key players in the Indian telecom market are Bharat Sanchar Nigam Ltd (BSNL) and
Mahanagar Telephone Nigam Limited (MTNL), Bharti Airtel Limited, Reliance
Communication, Vodafone, Idea Cellular, Aircel and Tata Teleservices.

It can be divided into 3 segments :

• Basic service
• Wireless service
• Internet service

The wireline subscriber base continued to decline and stood at 36.18 million in June
from 36.39 million in the previous month. BSNL and MTNL hold 84.09 per cent of the
wireline market share. The total broadband subscriber base increased 2.27 per cent to
9.45 million from 9.24 million in May, the report said

Wireless service or Mobile service has a subscriber base (GSM, CDMA and fixed
wireless phones) reached 652 million by the end of July,2010, according to figure
released by telecom regulator TRAI.

The growth in the wireless category is led by Bharti Airtel, which added three million
users, taking its subscriber base to 136.6 million. Vodafone added 2.71 million
subscribers in June, taking its user-base to 109 million. Idea Cellular and Aircel added
2.15 million and 1.60 million new users, respectively, during the month. Reliance
Communications added 2.83 million new users, while Tata Teleservices added 2.32
million subscribers.

State-run telcos BSNL and MTNL added 1.01 million and 43,881 new users,
respectively.

The wireless segment in India is much larger than the wireline segment and is growing
steadily due to the convenience and utility that it offers.
It hold a major market share of 93.4 per cent as compared to the wireline segment.
 SWOT analysis

STRENGTH :

• Huge Customer Potential- wireless subscriber base increasing steadily at as

rate of 2-3 % every month.

• High return on investment

• The total mobile services revenue in India is projected to grow at a

compound annual growth rate (CAGR) of 12.5 per cent from 2009-2013 to
exceed US$ 30 billion.

WEAKNESS :

• Poor infrastructure

• Most competitive market with more than 12 companies operating in the

country.

• Difficult to enter because of requirement of huge financial resources.

OPPORTUNITY :

• 100 % FDI is permitted.

• No cap on number of access providers in any service area.

• Increasing M&A activities.

• To provide infrastructure support for mobile services a scheme has been

launched to provide support for setting up and managing 7,436
infrastructure sites spread over 500 districts in 27 states. As on December 31,
2009, about 6,956 towers had been set up under the scheme

• Market penetration is only 38.7 % till December 2009.

• Tele density is 21.2 % in rural areas.

 • Introduction of 3G services and later on 4G.

THREAT :

• Renewal of 2G license on the basis of market rates of 3G

auctions

• TRAI intentions of rolling out 4G or the fourth-generation

technology, known as the ultra-broadband in 2-3 years
raising fears rendering 3G services somewhat obsolete.

• Declining ARPU (average Revenue per user)