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Telecom Retailing in India - Evolving As the Organised Sector Grows

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Telecom Retailing in India - Evolving As the Organised Sector Grows INDIA CALLING 1194-203_2_8_Mobiles94-203_2_8_Mobiles & TTelecom.inddelecom.indd 119494 22008-09-14008-09-14 002:212:21 MERCHANDISE & SERVICE RETAIL Mobiles & Telecom The mobile and accessories retail market has shown fastest growth in 2007 (25.6 per cent) over the previous year, the other two prominent categories being out-of-home food (catering) services and books, music & gifts leisure. The dream to provide mobile phones industry as it is not just the growth of a to every third Indian seems to have sector but it has multiplier effect on the been realised, thanks to the huge lot of entire economy.” service provideRs.in the telecom se ctor. The wireless subscribeRs.are According to the Telecom Regulatory increasing at a much faster pace as Authority of India (TRAI), the total compared to wireline subscribers. In number of wireless subscribeRs.stood March 2008, operatoRs.added 10.16 at 261.09 million at the end of March in million wireless subscribeRs.compared opularity of mobile 2008. India has emerged as the second to 8.53 million added in the month of phones is to a large largest wireless network in the world February. Total 10.4 million telephone extent responsible for the after China by overtaking the US where connections (wireline and wireless) dampening of the overall the current wireless useRs.is estimated have been added during March, market growth in this to be around 257.89 million. The overall compared to 8.49 million connections Pcategory while the renewed enthusiasm tele-density increased from 16.9 per added in February. With this, the total in the organised segment is on account cent in December 2006 to 26.22 per number of telephone connections in of the fillip from luxury brands and cent at the end of March 2008, against the country reaches 300.51 million at offerings that are positioned more as 25.31 per cent in February 2008. the end of March, compared to 290.11 a hi-end lifestyle statement than on As the Department of million in last month. This addition the functionality aspect of the product. Telecommunications (DoT) points out, puts the telecom sector on a strong Consumer durables and the mobile “India has emerged as a major base foot to achieve its target of 500 million phone and accessories categories have for the telecom industry worldwide and subscribeRs.by the year 2010. both grown faster in 2007 as compared it is the endeavour of the Government The number of mobile phone useRs. to 2006. to facilitate further growth of this vital has been growing at a Compound INDIA RETAIL REPORT 2009 195 1194-203_2_8_Mobiles94-203_2_8_Mobiles & TTelecom.inddelecom.indd 119595 22008-09-14008-09-14 002:222:22 Annual Growth Rate (CAGR) of 87.7 per provider with an aggregate of 75 million cent since 2003, as per DoT, Ministry customers. Bharti Airtel has been rated of Communications & Information among the best performing companies Technology, Government of India, in the world in the BusinessWeek IT 100 estimates. Moreover, mobile phone tariff list 2007. & Uttaranchal, Madhya Pradesh & in India has been dipped among the Bharti Airtel is structured into three Chattisgarh, Gujarat, Maharashtra lowest by a vigilant regulatory authority, strategic business units - Mobile & Goa, Andhra Pradesh, Kerala and as compared to other countries, without services, Telemedia services and Karnataka. Besides, IDEA plans to start compromising on the service standards. Enterprise services. The mobile operation in Bihar, Jharkand, Orissa and TRAI has lowered roaming tariffs from business provides mobile and Tamil Nadu, before the end of the fiscal 22 per cent to 56 per cent and there has fixed wireless services using GSM year. Moreover, the deal for acquisition of been a steady decline in local call rates technology across 23 telecom circles. 40.8 per cent stake in Spice (for Rs.2,720 also by some service providers. Some The Telemedia business provides crore) will give Idea an entry into the operatoRs.also offer various schemes broadband & telephone services in 94 Punjab and Karnataka markets as well. under which STD call rates as well come cities and is foraying into the IPTV and down to Re 1 per minute irrespective DTH segments. All these services are Vodafone Essar Ltd. of the distance. And to top it all is the provided under the Airtel brand. Airtel’s Vodafone Essar, a subsidiary low cost mobile handsets, coupled with high-speed optic fibre network currently of Vodafone Group, commenced lower delivery cost of wireless services spans over 78,540 kms covering all the operations in India in 1994 when available in the Indian market, and which major cities in the country. The company its predecessor Hutchison Telecom has already driven the market in 2007. has two international landing stations in acquired the cellular license for Mumbai. However, taking wireless telephony Chennai that connects two submarine The company provides mobile services to the villages is still a challenge in the cable systems – i2i to Singapore and under the brand name Vodafone. With country. According to India Infrastructure SEA-ME-WE-4 to Europe. a customer base over 49.1 million, as Report 2008, about 68 per cent of on June 30, 2008, Vodafone coveRs.86 population lives in rural areas while the Idea Cellular per cent of India’s mobile telephony. mobile telephone penetration is just 1 Idea Cellular, an Aditya Birla Group The company is keen to see this figure per cent. In this scenario, an increased company, was incorporated in 1995 rise to 100 million. Vodafone reaches its penetration of mobile telephony in rural and today, is a leading GSM mobile customers.through 400,000 Vodafone India will give a major boost to the services operator and provides services Stores and Vodafone Mini Stores. subscriber base of most of the mobile in 14 Indian. Mumbai became the recent operatoRs.in the country. service area to form part of Idea’s Tata Indicom expanding reach with over 60 ‘My Idea’ Tata Indicom began pan-India MAJOR SERVICE PROVIDERS exclusive service centres. In addition, operations in 2004. It operates in more Idea reaches out to customers.through than 6,000 towns and continues to Bharti Airtel Ltd. 15,000 retail outlets. register the highest Compounded Annual Bharti Airtel Limited, a group IDEA Cellular currently runs Growth Rate (CAGR) at 113 per cent. company of Bharti Enterprises, is India’s operations in Delhi, Himachal Pradesh, The company currently already leading integrated telecom services Rajasthan, Haryana, Uttar Pradesh operates its retail business nationally 196 INDIA RETAIL REPORT 2009 1194-203_2_8_Mobiles94-203_2_8_Mobiles & TTelecom.inddelecom.indd 119696 22008-09-14008-09-14 002:222:22 MERCHANDISE & SERVICE RETAIL Mobiles & Telecom through over 3,100 outlets comprising of 600 TTSL owned stores and more than 2,500 stores in the franchisee format in city malls, high streets, kiosks and super markets across the country in the circles allotted to it. Tata Indicom already coveRs.the top 700 towns in India in terms of population through Tata Indicom exclusive stores. Most towns with a population of 50,000 and above Maharashtra, Goa, Kerala, Tamil Nadu (close to Rs.390 crore) to the group’s within the 19 circle of TTSL’s operation and Pondicherry. BPL Mobile runs turnover of 2,157 million (Rs.2,600 crore) would already have the presence of a its retail operations through Mobile in the previous quarter. Tata Indicom exclusive outlet. Galleries and BPL Mobile stores. The Aircel has a foothold in Chennai, Tamil Besides this, TTSL also operates Mobile Stores are smaller versions Nadu, Assam, North East provinces, Sansar stores. These Sansar stores of the galleries. At the end of 2006, Orissa, Bihar, Jammu & Kashmir, are the largest branded retail presence the company had altogether 209 Himachal Pradesh and West Bengal. in semi-urban and rural areas in the retail outlets. The telecom Regulatory Moreover, further allocation for new country. Recently it launched four Authority of India (TRAI) has placed service areas across India – including low-cost retail outlets in Ranga Reddy, BPL Mobile amongst top mobile service Delhi (Metro), Mumbai (Metro), Andhra Guntur and Nalgonda districts of Andhra provideRs.in terms of quality and voice Pradesh, Gujarat, Haryana, Karnataka, Pradesh and plans to set up at least 100 quality with scores ranging between Kerala, Madhya Pradesh, Maharashtra, more such outlets in the rural areas and 98.6- 99.5 per cent. Goa, Rajasthan, Punjab, UP (West) small towns keeping in consideration and UP (East) – by the Department of business opportunities for the small Aircel Ltd. Telecom (DOT) has given momentum entrepreneuRs.there as well as to Launched in 1999, Aircel Ltd. to Aircel. Usually recognised as the increase its presence. is a joint venture between Maxis regional operator, Aircel holds 18.2 per Communications, Berhad of Malaysia, cent market share. The company plans to BPL Mobile Communication Ltd and Apollo Hospital Enterprise Ltd become national operator by 2009. BPL Mobile started its services of India; with Maxis Communications The company plans to invest up to in 1995 in Mumbai and expanded holding a majority stake of 74 per cent. $5 billion by 2010 to launch operations its operations to other parts of In value, Aircel contributed 320 million across the country. As a part of the operation the company would add 14,000 additional cell sites in one year for service rollout, which would need Aircel plans to invest up to $5 billion by $1.6 billion. At present the company has 2010 to launch operations across the 7,000 sites. country. As a part of the operations the Virgin Mobile India Virgin Mobile India was launched in company would add 14,000 additional cell March 2008 with an association between sites in one year.
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