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India - Telecoms, Mobile, Broadband and Forecasts


Attention: There is an updated edition available for this report.

This report provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in India. Subjects covered include:

  • Key statistics;
  • Market and industry overviews;
  • Regulatory environment;
  • Major players (fixed and mobile);
  • Infrastructure development - national and international;
  • Digital media;
  • Mobile voice and data market;
  • Internet, including VoIP and IPTV;
  • Broadband services;
  • Regulatory environment;
  • Telecom market forecasts for selected segments/years to 2020.
 


India without a doubt continues to be one of the most dynamic and fastest growing major telecom markets in the world. Although there had not been any signs that the 2008/09 global financial crisis had dampened growth in any significant way, by early 2010 the government was having to closely manage the country’s national debt as well as the prospect of high rates of inflation. The mobile sector in particular was continuing its strong march forward. The country’s mobile subscriber base has already grown from around 10 million subscribers in 2002 to reach 350 million by the start of 2009. By March 2010 it had reached 584 million and based on its then growth rate it was likely to pass 750 million by year-end.

A number of factors have been responsible for this amazing growth, including low tariffs, low handset prices and most notably a highly competitive market created by the government and the regulator. The government has continued to open the market up to more and more competition. In late 2009 another two mobile operators - S Tel and Videocon - launched services in the country. While GSM technology has continued to be dominant, by early 2009 CDMA was still managing to hang on to a 20% market share. The total mobile market was expanding at an annual rate of around 40% coming into 2010. All things considered the mobile industry should continue to grow for the time being.

Growth into the future will be boosted in some ways, no doubt, by the roll out of 3G mobile services following the assignment of 3G licences in May 2010. After multiple delays the government finally held its 3G auction, an event that was to significantly boost the government coffers. The seven winners of the auction were required to pay a combined amount of around US11.0 billion to the government. When the amount payable by BSNL and MTNL was included, the 3G spectrum auction earned revenue of US$14.6 billion for the government, an amount that far exceeded expectations. In fact it was more than double the US$7.6 billion the government had initially projected. In the meantime the two state-owned operators BSNL and MTNL had already started rolling out their 3G networks. The private operators were to be granted their frequency spectrum and start their 3G rollouts later in 2010.

With fixed-line subscribers at around 37 million in early 2010, the market was witnessing a modest decline in that segment of the market. Growth having stalled in 2006, fixed-line numbers were not expected to pick up again for some time. (It should be noted that in 2005 India’s telecom regulator began counting fixed WLL services as ‘wireless’ services and not as ‘wireline’ meaning that they were absorbed into the mobile statistics and were not able to be separated out any longer as fixed services. This has caused some confusion in the reporting data.) India’s total telephone subscriber base (mobile and fixed) had passed the 620 million subscriber milestone by March 2010, with all the growth being provided by the mobile market.

Regulatory reform has been central to the development of India’s telecoms market. Sweeping reforms by successive governments over the last decade have dramatically changed the nature of telecommunications in the country. In the meantime, the Telecom Regulatory Authority of India remains committed to further regulatory and structural reforms. The adoption of Unified Licensing, a change in the Access Deficit Charge regime, and the encouragement of increased infrastructure sharing, especially the towers for mobile networks, were all contributing to ongoing growth. Another important initiative has been the Indian government’s revised Foreign Direct Investment policy which increased the foreign ownership cap from 49% to 74%.

If anything it could be said that the regulation of the market has been overly enthusiastic; there were some signs that the market was starting to suffer from the complexity of the regulatory regime. In parallel with the regulatory change process, there has been a continuing evolution of the market through a series of mergers and takeovers among the mobile operators that has initially resulted in a welcome and productive consolidation. Although the policy had initially been considered complex and unwieldy, the so-called ‘licensing by circles’ policy was eventually credited with establishing a highly competitive and healthy telecoms market. With the assistance of a comparatively well regulated commercial environment, with plenty of growth potential and an increasingly open market, India has proven to be an attractive telecoms destination for foreign investment with a clear way forward to further growth. The complex regulatory environment was again causing concerns in early 2010. The government’s 3G auctions held at that time had been structured in what many regarded as an overly complex fashion. As a result, the auctions produced outcomes that may not necessarily favour the mobile industry in the longer term. One significant consequence was that the massive revenue earned by the government meant in turn that many of the operators now have huge debt burdens to manage. This was an issue for both the local telecom industry and the Indian economy in general.

A market segment that has continued to puzzle the observer - and the government - is broadband Internet. Despite the obvious enthusiasm for Internet access to be found across the country, India’s move into high-speed broadband Internet has so far been noticeably sluggish. The Telecom Regulatory Authority of India in describing the situation in mid-2010 noted that ‘... the performance so far has not been up to the expectations’. The regulator’s reference point was the targets set in the government’s National Broadband Policy issued in 2004, with growth falling well short of these targets. The number of dial-up Internet subscribers had been increasing in a healthy fashion over the years, with the total Internet subscriber base increased fourfold over a five-year period between 2003 and 2008. The question remained, however: what was happening with broadband? By early 2010 broadband Internet penetration in India was a low 0.7%, with these broadband services accounting for about a half of the total Internet subscriber base. In other words, coming into 2010 there were only around 8 million broadband subscribers in a country of 1.2 billion people. In the meantime, somewhat paradoxically, the overall level of Internet usage seems to be growing strongly, perhaps boosted by the widespread use of Internet cafes and other points of public online access. There were in excess of an estimated 60 million Internet users throughout the country by January 2010, this representing a penetration of almost 5%.

Market highlights:Growth in India’s mobile market was continuing in its boom mode;By March 2010 the country had 584 million mobile subscribers, up from 350 million just 15 months earlier;The mobile market was continuing to expand at an annual rate in excess of 40% coming into 2010;GSM was comfortably maintaining its position as the dominant mobile technology with 80% of the mobile subscriber market, but CDMA seemed to have stabilised its market share at 20% for the time being.The number of broadband Internet subscribers in India has started to become more significant, having more than doubled in the two-year period to end-2009;However, broadband subscriber numbers still only comprised 0.7% of the population at the start of 2009;DSL, whilst holding slightly more than 75% of the local broadband market, was steadily losing market share to other non-DSL broadband platforms, especially to wireless broadband platforms;After experiencing a series of frustrating administrative delays, India finally held its auction to assign 3G licences in the first half of 2010. The auction was certainly successful in terms of the unexpectedly high revenue earned by the government. There was some debate as to whether the outcome was good for the local telecom industry;The 3G auction was followed by an equally high profile auction of WiMAX spectrum that set the scene for a competitive and invigorated wireless broadband market.India: - key telecom parameters - 2009 - 2010

Category 2009 2010 (e)
Fixed-line services:    
Total number of subscribers37.1 million 36.5 million
Annual growth (e)-2% -2%
Fixed-line penetration (population)3.0% 2.9%
Fixed-line penetration (household)18% 18%
Broadband Internet:    
Total number of subscribers7.8 million 11.0 million
Annual growth44% 41%
Broadband penetration (population)0.7% 1.0%
Broadband penetration (household)3.5% 4.7%
Mobile services:    
Total number of subscribers525million 760 million
Annual growth51% 44%
Mobile penetration (population)45% 64%

(Source: BuddeComm)
Data in this report is the latest available at the time of preparation and may not be for the current year.

1. Key Statistics
1.1 Subscribers statistics
2. Telecommunications Market
2.1 Overview
2.2 Competition
2.3 Analysis: India in the aftermath of the global financial crisis - June 2010
2.4 Third Generation (3G) and WiMAX spectrum auctions
2.5 WiMAX spectrum auction
2.6 Foreign investment
2.6.1 Foreign investment and national security
2.7 Universal service
2.8 Import of Chinese telecom equipment
3. Regulatory Environment
3.1 Telecommunications authorities
3.1.1 Ministry for Communications (MoC)
3.1.2 Department of Telecommunications (DoT)
3.1.3 Telecom Commission
3.1.4 Telecom Regulatory Authority of India (TRAI)
3.1.5 Telecom Dispute Settlement & Appellate Tribunal (TDSAT)
3.1.6 Telecom Sector Ombudsman (TSO)
3.2 Regulatory development
3.2.1 Licensing circles
3.2.2 Licence fees and taxes
3.3 National Telecom Policies
3.3.1 National Telecom Policies 1999 (NTP-99)
3.3.2 Addendum to NTP-99
3.3.3 Proposed new National Telecom Policy
3.3.4 National Broadband Policy 2004
3.4 Foreign investment
3.5 National security
3.5.1 Dispute over import of Chinese equipment
3.6 Offshore investment
3.7 Regulatory reforms
3.7.1 Overview
3.7.2 Access Deficit Charge (ADC)
3.7.3 Quality of Service (QoS)
3.7.4 Local Loop Unbundling (LLU)
3.7.5 Conditional Access System (CAS)
3.7.6 Unified Access Services Licence (UASL)
3.8 Regulatory issues
3.8.1 Basic Telephone Service (BTS) licensing guidelines
3.8.2 Development of basic service sector
3.8.3 National Long-Distance (NLD)
3.8.4 International Long-Distance (ILD)
3.8.5 ‘Fixed’ mobile
3.8.6 Basic service tariffs
4. Fixed Network Market
4.1 Background
4.2 Overview of operators
4.2.1 Bharat Sanchar Nigam Limited (BSNL)
4.2.2 Bharti Airtel (formerly Bharti Telenet)
4.2.3 Hughes Telecom
4.2.4 Mahanagar Telephone Nigam Limited (MTNL)
4.2.5 Tata Teleservices Ltd
4.2.6 Reliance Infocomm
4.2.7 Sistema (formerly Shyam Telelink)
4.3 International operators
4.3.1 Market development
4.3.2 Association of Competitive Telecom Operators (ACTO)
4.3.3 Tata Communications (formerly Videsh Sanchar Nigam Ltd (VSNL))
4.3.4 Data Access
4.3.5 Bharti Telesonic
4.3.6 Reliance Communications
4.4 Other fixed network operators
4.4.1 AT&T
4.4.2 Verizon
4.4.3 BT
4.4.4 Cable & Wireless (C&W)
4.4.5 France Telecom
4.4.6 Tulip Telecom
4.4.7 SingTel
5. Telecommunications Infrastructure
5.1 National infrastructure
5.1.1 Overview
5.1.2 Network development
5.1.3 National network
5.1.4 Infrastructure sharing
5.1.5 Rural and regional networks
5.1.6 Fibre optic cable projects
5.1.7 Wireless Local Loop (WLL)
5.2 Infrastructure developments
5.2.1 Voice over Internet Protocol (VoIP)
5.2.2 IP networks
5.2.3 Next Generation Networks (NGN)
5.3 International infrastructure
5.3.1 Background
5.3.2 Interconnect agreements
5.3.3 India-Pakistan
5.3.4 International service disruption
5.3.5 Submarine cable networks
5.3.6 Satellite communications
6. Internet Market
6.1 Overview
6.1.1 Growth path
6.1.2 Internet statistics
6.1.3 Growth issues
6.1.4 Service disruption
6.1.5 E-medicine
6.2 Regulatory issues
6.2.1 Internet policy
6.2.2 National Internet Exchange of India (NIXI)
6.2.3 Pricing
6.2.4 Domain names
6.2.5 Censorship and security
6.2.6 International connectivity
6.3 ISP market
6.3.1 Major ISPs
6.3.2 Content
6.3.3 Internet telephony licences
7. Broadband Market
7.1 Overview
7.1.1 Broadband statistics
7.2 Market development
7.3 National Broadband Policy
7.3.1 Implementation of National Broadband Policy
7.4 National Broadband Plan
7.5 Personal computers
7.6 Cable modems
7.7 Digital Subscriber Line (DSL)
7.8 Wireless broadband
7.8.1 WiFi
7.8.2 WiMAX
7.8.3 Spectrum auction
7.9 Satellite
7.10 Broadband over Powerline (BPL)
7.11 Other broadband networks
8. Broadcasting Market
8.1 Overview of Convergence
8.2 Overview of broadcasting market
8.2.1 Statistical overview
8.3 Regulatory issues
8.3.1 Background
8.3.2 Disputes
8.3.3 Cable Television Networks (Amendment) Bill
8.3.4 Convergence Bill 2001
8.3.5 Foreign investment
8.3.6 Conditional Access System (CAS)
8.3.7 Censorship
8.3.8 Viacom - Network18 joint venture
8.4 Digital TV
8.4.1 Internet Protocol TV (IPTV)
8.5 Cable TV
8.5.1 Market overview
8.5.2 Cable TV regulatory environment
8.5.3 Digitalisation of Cable TV
8.5.4 Pay TV
8.6 Satellite TV
8.6.1 Direct-to-Home (DTH) TV
8.7 Major cable and pay TV operators
8.7.1 Doordarshan
8.7.2 Asianet Communications
8.7.3 Hinduja Group (InCableNet)
8.7.4 Star TV
8.7.5 Zee Telefilms Limited (SitiCable)
8.8 Free-to-Air TV
8.8.1 Doordarshan
9. Mobile Communications
9.1 Overview of India’s mobile market
9.1.1 3G auctions
9.1.2 Consequences of the 3G auction
9.1.3 Market structure
9.2 Mobile statistics
9.3 Mobile market segments
9.4 Development issues
9.4.1 MVNOs
9.4.2 Spectrum
9.4.3 Rural expansion
9.4.4 Future growth
9.4.5 Foreign investment
9.4.6 Revenue and ARPU
9.4.7 Pricing and usage
9.5 Regulatory issues
9.5.1 Background
9.5.2 Year 2010
9.5.3 Year 2009
9.5.4 Year 2008
9.6 Mobile technologies
9.6.1 Overview of mobile technologies used in India
9.6.2 GSM
9.6.3 CDMA
9.6.4 Third Generation (3G) mobile
9.7 Major mobile operators in India
9.7.1 Market overview
9.7.2 Unified Access Service Licences (UASL)
9.7.3 Market structure and earlier growth
9.7.4 Operator and market statistics
9.7.5 Bharat Sanchar Nigam Ltd (BSNL)
9.7.6 Bharti Airtel
9.7.7 Loop Mobile (formerly BPL Mobile)
9.7.8 Vodafone Essar (formerly Hutchison Essar Telecom Ltd)
9.7.9 Aircel
9.7.10 Idea/Spice
9.7.11 Mahanagar Telephone Nigam Limited (MTNL)
9.7.12 Reliance Communications
9.7.13 Spice Telecom
9.7.14 Tata Teleservices
9.7.15 Unitech Wireless/Uninor
9.7.16 Virgin Mobile
9.7.17 MTS (Sistema/Shyam Telelink)
9.7.18 S Tel
9.7.19 Videocon
9.7.20 Other operators
9.8 Mobile voice services
9.8.1 Prepaid
9.8.2 Satellite mobile
9.9 Mobile data services
9.9.1 Market overview
9.9.2 Alliances
9.9.3 Short Message Service (SMS)
9.9.4 Multimedia Messaging Service (MMS)
9.9.5 General Packet Radio Service (GPRS)
9.9.6 Push-to-Talk over Cellular (PoC)
9.9.7 Enhanced Data for GSM Evolution (EDGE)
9.9.8 i-mode
9.9.9 BlackBerry
9.9.10 Mobile TV
9.10 Mobile content
9.10.1 Gaming
9.10.2 Social networking
9.10.3 Mobile payments
9.10.4 Advertising and Marketing
9.11 Handsets
10. Forecasts
10.1 Overview
10.2 Forecasts - fixed-line market - 2015; 2020
10.3 Forecasts - Internet services - 2015; 2020
10.4 Forecasts - mobile market - 2015; 2020
11. Glossary of Abbreviations
List of Tables and Exhibites
Table 1 - Country statistics India - 2010
Table 2 - Telecom revenue and investment statistics - 2007
Table 3 - Telephone network statistics - 2009
Table 4 - Internet user statistics - 2009
Table 5 - Broadband statistics - 2009
Table 6 - Mobile statistics - 2009
Table 7 - National telecommunications authorities
Table 8 - Fixed-line services versus mobile services and penetration - 2009
Table 9 - 3G auction: Number of licences and total fees paid by operators - May 2010
Table 10 - Foreign Direct Investment in telecom sector - 2004 - 2008
Table 11 - Telephone services to villages - 2009
Table 12 - Number of telecom licences issued by category - 2007 - 2008
Table 13 - Fixed-line subscribers by operator - 2007 - 2009
Table 14 - Fixed-line subscribers and teledensity - 1995 - 2005
Table 15 - Fixed-line subscribers and teledensity - 2005 - 2011
Table 16 - Growth of VPT scheme - 2001 - 2009
Table 17 - PCOs in operation - 2003 - 2009
Table 18 - PCOs in operation and market share by operator - 2008
Table 19 - Fixed WLL subscribers - 2004 - 2006
Table 20 - Internet users - 1995 - 2011
Table 21 - Internet subscribers - 1995 - 2011
Table 22 - Dial-up Internet subscribers - 2007 - 2010
Table 23 - Internet (dial-up) ARPU - 2005; 2007 - 2009
Table 24 - International Internet bandwidth - 2000 - 2009
Table 25 - Number of licensed ISPs - 2002 - 2003; 2005; 2008 - 2009
Table 26 - ISP market - leading operators, subscribers and market share - 2009
Table 27 - Broadband subscribers - 2001 - 2011
Table 28 - Broadband subscribers and households - 2009
Table 29 - Broadband subscribers by access and annual change - 2009
Table 30 - Internet subscribers and market share by access type - 2009
Table 31 - India - Broadband and Internet subscriber targets - 2005; 2007; 2010
Table 32 - Cable modem subscribers - 2001 - 2009
Table 33 - DSL subscribers - 2001 - 2009
Table 34 - Wireless broadband subscribers - 2003; 2006 - 2009
Table 35 - Broadcasting market overview - 2009
Table 36 - Number of channels carried by cable operators - 2008 - 2009
Table 37 - Cable and TV households - 1995 - 2009
Table 38 - Total TV industry revenue - 2000 - 2009
Table 39 - Pay TV subscribers by technology - 2002 - 2009
Table 40 - 3G auction: Number of licences by operator - May 2010
Table 41 - Overview of India’s mobile market - 2009
Table 42 - Mobile subscribers and annual change - 2006 - 2011
Table 43 - Mobile subscribers (GSM and CDMA) - 2002 - 2009
Table 44 - GSM mobile subscribers and annual change - 1997 - 2009
Table 45 - Mobile penetration urban and rural - 2007; 2009
Table 46 - Mobile services revenue - 1996 - 2012
Table 47 - Mobile ARPU by technology, prepaid/postpaid/blended - June 2009
Table 48 - Mobile ARPU (GSM and CDMA) - 2005 - 2009
Table 49 - Mobile subscribers and market share by region/circle - 2008
Table 50 -GSM mobile subscribers by region/circle - 2007; 2009
Table 51 - GSM ARPU - 2003 - 2009
Table 52 - GSM ARPU by region/circle, prepaid/postpaid/blended - 2009
Table 53 - GSM ARPU by operator grouping, prepaid/postpaid/blended - 2009
Table 54 - CDMA mobile operators, subscribers and market share - 2009
Table 55 - CDMA ARPU - 2003 - 2009
Table 56 - CDMA ARPU by region/circle, prepaid/postpaid/blended - 2009
Table 57 - 3G auction: Number of licences and total fees paid by operators - May 2010
Table 58 - Mobile operators and subscribers - 2009
Table 59 - Total mobile subscribers (GSM and CDMA) by operator and market share - 2009
Table 60 - GSM mobile operators, subscribers and market share - 2009
Table 61 - CDMA mobile operators, subscribers and market share - 2009
Table 62 -Overall mobile ARPU - 2005 - 2009
Table 63 - Mobile ARPU (GSM and CDMA), postpaid/prepaid - 2009
Table 64 - Mobile ARPU (blended) for selected operators - 2009
Table 65 - BSNL mobile subscribers - 2002 - 2009
Table 66 - Bharti Airtel mobile subscribers - 2002 - 2010
Table 67 - Bharti Airtel mobile ARPU - 2004 - 2005; 2007 - 2009
Table 68 - Loop Mobile (BPL) mobile subscribers - 2002 - 2009
Table 69 - Vodafone Essar mobile subscribers - 2002 - 2009
Table 70 - Vodafone Essar mobile ARPU - 2008 - 2009
Table 71 - Aircel mobile subscribers - 2004 - 2010
Table 72 - Idea/Spice mobile subscribers - 2002 - 2009
Table 73 - Idea/Spice mobile ARPU - 2007 - 2009
Table 74 - MTNL mobile subscribers - 2002 - 2009
Table 75 - Reliance mobile subscribers - 2002 - 2010
Table 76 - Reliance mobile ARPU - 2007 - 2010
Table 77 - Spice Telecom mobile subscribers - 2002 - 2008
Table 78 - Tata Teleservices mobile subscribers - 2002 - 2010
Table 79 - MTS (Sistema/Shyam) mobile subscribers - 2008 - 2010
Table 80 - Prepaid mobile subscribers: share of total market - 2003 - 2009
Table 81 - Monthly ARPU for mobile subscribers by technology, prepaid/postpaid/blended - 2009
Table 82 - Forecast fixed line subscribers and penetration rates - 2015; 2020
Table 83 - Forecast Internet subscribers - 2015; 2020
Table 84 - Forecast mobile subscribers - 2015; 2020
Exhibit 1 - Overview of FDI policy for India’s telecom sector - 2009
Exhibit 2- Fixed-line basic services by operator - 2009
Exhibit 3 - ISRO satellite network - May 2010
Exhibit 4 - Broadcasting Standard and major broadcasters
Exhibit 5 - Information on FTA turned Pay and New Pay Channels
Exhibit 6 - Overview of major channels available to consumers in India
Exhibit 7 - Operators issued DTH licences - 2009
Exhibit 8 - CDMA 3G commercial deployment in India
Exhibit 9 - 3G auction results: Service area licences by operator - May 2010
Exhibit 10 - BSNL ‘mega-contract’ procurement process timeline - 2005 - 2007
Exhibit 11 - Bharti Airtel - key operational statistics
Exhibit 12 - Major shareholders in Bharti Airtel - September 2009
Exhibit 13 - Vodafone Essar - key operational statistics

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