Telecom Sector in India: a Decadal Profile
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Telecom Regulatory Authority of India Telecom Sector in India: A Decadal Profile Telecom Sector in India: A Decadal Profile Telecom Regulatory Authority of India Mahanagar Doorsanchar Bhawan, Jawaharlal Nehru Marg, (Old Minto Road), New Delhi - 110 002 Telecom Regulatory Authority of India Telecom Sector in India: A Decadal Profile Telecom Regulatory Authority of India Mahanagar Doorsanchar Bhawan, Jawaharlal Nehru Marg, (Old Minto Road), New Delhi - 110 002 © Telecom Regulatory Authority of India, 2012 All rights reserved, no part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording and/or otherwise, without the prior written permission of the Telecom Regulatory Authority of India, New Delhi. Prepared at the behest of Telecom Regulatory Authority of India by National Council of Applied Economic Research, Parisila Bhawan, 11, Indraprastha Estate, New Delhi–110 002 ii | Telecom Sector in India: A Decadal Profile Telecom Sector in India: A Decadal Profile | iii iv | Telecom Sector in India: A Decadal Profile CONTENTS Foreword iii 3.5 Spectrum Management 53 List of Tables vii 3.6 Recommendations made by TRAI 55 List of Figures ix 3.7 Regulatory Timeline 55 List of Boxes x Executive Summary xi 4 Investment 59 4.1 Introduction 59 1 Introduction 1 4.2 Total Investment 59 1.1 Backdrop 1 4.3 Foreign Direct Investment (FDI) 62 1.2 Brief Overview of the Telecommunications Sector 1 4.4 Conclusion 69 1.3 Importance of the Telecommunications Sector 3 5 Socioeconomic Impact 71 2 Trends in the Telecommunications 5.1 Introduction 71 Sector 5 5.2 Macro Impact 71 2.1 Introduction 5 5.3 ICT and Economic Development 74 2.2 International Comparisons 5 5.4. Micro Studies on the Impact of ICT 75 2.3 Growth of Telecommunication Services in India 9 5.5 Individual Sections of Society 80 2.4 Regional Variations 39 5.6 Applications of Technology 86 2.5 Trends in Telecommunication Manufacturing 46 5.7 Conclusion 96 2.6 Conclusion 48 6 Conclusions 97 3 Evolution of Telecom Regulation 49 6.1 Introduction 97 3.1 National Telecom Policy (NTP), 1994 49 6.2 Challenges and Suggested Policies 97 3.2 New Telecom Policy (NTP), 1999 50 6.3 Other Challenges 99 3.3 Institutional Framework for Telecom Policy Regulation in India 50 Appendix 101 3.4 Licensing Framework 52 Abbreviations 105 vi | Telecom Sector in India: A Decadal Profile LIST OF TABLES 1.1 Snapshot of the Telecommunications Sector 1 2.13 State-wise Broadband Subscribers as on March 31, 2011 43 2.1 Estimates of Share of Expenditure on Mobile Phones 14 2.14 e-Readiness Index 43 2.2 PCO and VPT, March 2000–December 2011 2.15 Universal Service Obligation Fund (million) 21 Position (Rs crore) 46 2.3 Number of Subscribers for Other Value 2.16 Telecom Equipment Manufacturing in Added Services, March 2000– India (Rs crore) 47 December 2011 (million) 21 2.17 Revenue of Top 10 Telecom Equipment 2.4 Market Share of Leading ISPs in Terms of Players (Rs crore) 48 Subscribers, December 2011 24 3.1 Regulatory Reforms 56 2.5 Sector-wise EBITDA, PBIT, PBT 4.1 Total Plan Outlay and Outlay for (Rs crore) 29 Communications in Five Year Plans (Rs crore) 59 2.6 Sector-wise Profitability Ratios (%) 29 4.2 Foreign Direct Investment Policy 63 2.7 Composition of Revenue, December 2011 (%) 30 4.3 FDI in Telecommunications 2.8 Quality of Service Performance of Sector: April 2000–August 2010 66 Wireless Service Providers, December 2011 33 5.1 Summary of ICT4D Phases 74 2.9 Quality of Service Performance of Wireline 5.2 Mobile Information Services for Farmers 77 Service Providers, December 2011 35 5.3 Status of Women 83 2.10 Parameter-wise Status of QoS Benchmarks for Broadband Service, December 2011 37 5.4 Increased Use of Mobile Devices (%) 86 2.11 Service Area-wise Teledensity, 5.5 Bandwidth Required for Various December 2011 40 Applications 87 2.12 Mobile Ownership by Households 41 5.6 Super Specialty Consultations 90 5.7 Some Applications with Mobile Governance 91 Telecom Sector in India: A Decadal Profile | vii viii | Telecom Sector in India: A Decadal Profile LIST OF FIGURES 1.1 Share of Telecommunications as per cent of 2.15A Share of Service Provider in Wireline Subscriptions, 2001 (%) 22 GDP, 2000–01 to 2009–10 2 2.15B Share of Service Provider in Wireline 2.1 India’s Position in Telephone Subscriptions 6 Subscriptions, December 2011 (%) 22 2.2 India’s Position in Mobile Cellular Prepaid 2.16 Share of Service Provider in Wireless Tariffs (US$ per month), 2008 7 Subscriptions, February 2012 (%) 23 2.3 Internet Users in India and in the World, 2010 8 2.17 Share of Service Provider in Wireless 2.4 India’s Position in Fixed Internet Subscriptions Subscriptions based on GSM, in the World, 2010 9 December 2011 (%) 23 2.5 Total Number of Telephone Subscribers 2.18 Share of Service Provider in Wireless in India, 1981–2011 (million) 10 Subscriptions based on CDMA, December 2011 (%) 23 2.6 Total Number of Wireline Subscribers and Growth Rate in India, 1981–2011 11 2.19 Service Provider-wise Details of Data Services, December 2011 (%) 24 2.7 Total Number of Wireless Subscribers and Growth Rate in India, 1996–2011 11 2.20A Service Provider-wise Shares in PCO, December 2011 24 2.8 Teledensity, March 2000–February 2012 14 2.20B Service Provider-wise Shares in VPT, 2.9 Mobile Phone Prices in India 16 December 2011 24 2.10 Internet Subscriptions and Growth Rate, 2.21 Market Share of PMRTS Providers (%) 25 March 2000–December 2011 16 2.22 Market Share of VSAT Service Providers (%) 25 2.11 Wireless Subscribers Capable of Accessing Data Services/Internet March 2007– 2.23 Average Outgo* per Outgoing per Minute December 2011 17 (Rs per minute) for Postpaid, Prepaid and Blended (GSM and CDMA), 2007–11 26 2.12 Market Share of Internet Access Technologies including Broadband, December 2011 17 2.24A Telecom Sector Revenue, 2005–06 to 2010–11 (Rs crore) 28 2.13 Broadband Access, Technologies and Market Share, December 2011 18 2.24B Telecom Sector Revenue, 2005–06 and 2010–11 (Rs crore) 28 2.14 Public–Private Wireline Subscriptions, March 2000–December 2011 (million) 22 2.25 ARPU and MoU for Wireless Subscribers, 2000–01 to 2010–11 30 Telecom Sector in India: A Decadal Profile | ix 2.26 Revenue of Internet Service Providers, 4.5 FDI in Telecommunications (Rs crore) and June 2008–December 2011 31 Wireless Subscribers (million), 2000–01 to 2011–12 67 2.27 Minutes of Usage per Subscriber per Month of Dial-Up Access, 2005–06 to 2010–11 31 4.6 FDI in Telecommunications (Rs crore) and ARPU Rs per minute (GSM), 2.28 Total Duration of Usage for Internet Telephony, 2000–01 to 2011–12 68 2004–05 to 2010–11 (million minutes) 32 4.7 FDI and Gross Revenue in Telecommunications 2.29 Quality of Services for Wireless, 2003–10 33 Sector (Rs crore), 2000–01 to 2010–11 68 2.30 Average of Percentage of Calls Answered 4.8 FDI Inflow, Exports and Imports in by the Wireline Operators (Voice-to-Voice) Telecommunications Sector (Rs crore), within 60 Seconds across States, 2006–10 35 2000–01 to 2010–11 69 2.31 Percentage of Village Panchayats having 5.1 Relationship between Economic Growth and Broadband, March 2011 42 Telecom Services: 2008 71 4.1 Public and Private Sector Live Projects, 5.2 Total Teledensity ( June 30, 2010) and Share 2001–11 (Rs crore) 62 of GSDP as a percentage of Indian 4.2 FDI in Telecom Sector (Rs crore) and Growth GDP (2008–09) 73 Rate of FDI in Telecom, 2000–01 to 2011–12 64 5.3 Factors Influencing Tele-health Utilisation in 4.3 Share of FDI in Telecom Sector as Percentage Developing Countries 89 of Total FDI, 2000–01 to 2011–12 65 5.4 Diagrammatic Representation of the 4.4 Sector-wise FDI Inflows: April 2000– Process of Transfer of Funds 94 August 2010 65 LIST OF BOXES 2.1 The Budget Telecom Network Model 7 4.2 The Impact of the Crisis on Foreign Direct Investment in Telecommunications 64 2.2 Global System for Mobile Communication (GSM) 12 5.1 Rural Initiatives in ICT 76 2.3 Code Division Multiple Access (CDMA) 13 5.2 Impact of Information 78 2.4 Broadband Technologies 18 5.3 Technology Helps Deliver a Big Catch: Taking a Chance on New Information 79 2.5 Competition in the Telecommunications Sector 27 5.4 BPO Opportunities for Rural Women in India: The Case of Source for Change 81 2.6 USOF Schemes Currently Undertaken 45 5.5 Improvement in Productivity due to Mobile 4.1 Capital Employed, Return on Capital Phone: Case Study of a Woman 82 Employed and Capital Investment (Gross Block) in the Telecom Services Sector 60 x | Telecom Sector in India: A Decadal Profile EXECUTIVE SUMMARY he report presents the evolution of the telecomm- PMRTS and VSAT, while public service providers unications sector in India in the last decade. The dominate the other sectors. telecommunicationsT sector plays an increasingly important role in the Indian economy. It contributes to Gross Domestic International comparisons show that India has one of Product (GDP), generates revenue for the government the lowest mobile tariffs in the world. Between 2007 and and creates employment. 2010, prepaid and blended rates show a decline of 25.3 and 21.5 per cent, respectively.