Asian Journal of Economics, Finance and Management

3(4): 18-33, 2021; Article no.AJEFM.403

Assessment of Telecom Industry in India – From 2007 to 2020

Aakash Agarwal1*, Kritika Sharma1 and Vignesh Ramanan1

1Doon University, Mothrowala Road, Kedarpur, P.O. Ajabpur, Dehradun, Uttarakhand - 248001, India.

Authors’ contributions

This work was carried out in collaboration among all authors. All authors read and approved the final manuscript.

Received 01 March 2021 Original Research Article Accepted 06 May 2021 Published 10 May 2021

ABSTRACT

The telecom industry in India underwent drastic changes over the past 13 years. It has gone from being the darling of investors in 2007 to being among the most heavily indebted industries in the country. This is a descriptive study that aims to analyse the past decade’s events to understand the reasons behind the indebtedness of telecom operators and stress in the industry. The study showed that the government regulations facilitated high levels of competition, with over 16 operators in the industry at its height, which put pressure on the pricing power and profitability of the operators. High reserve prices in spectrum auctions caused overbidding, contributing significantly to the industry’s debt. Taxes and levies eroded the operators’ profit margins. Coupled with the obligations of servicing the debt, it is no surprise that the industry was under tremendous stress. The services of Reliance offered at near free prices led to a wave of consolidation in the industry. From over sixteen operators, the industry currently has four. The current stability in the sector is fragile and any regulation or policy must be carefully measured before implementation.

Keywords: Telecom; India; regulation; competition; telecom policy; Jio; debt; spectrum auctions.

1. INTRODUCTION substantially. However, the operating expenses are negligible. This implies that the marginal cost 1.1 Overview of serving customers reduce with each additional subscriber, subject to the limit of network The nature of the telecom industry is such that capacity. Thus, for operators to serve a there are heavy sunk costs involved to build a geographic region, they require a minimum network, with further costs required to be number of densities [1]. This is probably why the incurred only when the user base increases opportunities in the rural market have not been

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*Corresponding author: Email: [email protected];

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adequately utilised [2]. Investments in telecom and two blocks of 15 MHz for CDMA services [1]. infrastructure have positively affected economic There are about three or four operators in most productivity and growth [3,4]. Considering its countries [8]. Spectrum allocation policy is to be strategic importance in national development and well thought out keeping in mind the security, the telecommunications is among the characteristics and conditions of the industry and handful of regulated sectors in India. The raw nation. No spectrum auction design fits all material for wireless services, airwaves markets [9]. (spectrum), is owned by the Government of India and is managed by the Department of Telecom The opportunity cost of spectrum in the 2010 (DoT). DoT is tasked with granting licences to auctions was higher in the metro circles than in telecom operators and providing them with other circles, indicating fierce competition to spectrum usage rights. obtain spectrum in strategically important markets. Due to the allocation of only two blocks 1.2 Trajectory of 5MHz each, mobile broadband has not taken off in the country [10]. The reserve price set for In February 2007, telecom stocks provided the 2010 3G auctions were significantly higher at investors with the maximum returns, indicatingan Rs. 3,540 crores ($ 0.48 billion) per MHz than optimistic outlook of the industry as a whole [5], what should have been at Rs. 850 crores ($ 0.12 with Vodafone entering the market by acquiring billion) [1]. When a government has undue Hutchison’s 67% stake in Hutchison Essar for $ control over aspects of an industry, regulations 11.72 billion [6]. The market was dominated imposed directly impact the industry [11,12]. In mainly by voice and SMS services. Almost all developing countries, operators are required to major real estate companies had applied for a serve large sections of the society who have a telecom licence in 2007. lower propensity to pay than their developed- nation peers. With a lack of wired infrastructure, However, from being the darling of investors, the institutions and mechanisms must facilitate industry’s trajectory over the next 13 years was spectrum sharing and trading [13]. in stark contrast to the optimism shown by the market. The sector was mired by controversial According to Investopedia, the Herfindahl- political and regulatory actions such as the Hirschman Index (HHI) is a market concentration spectrum allocation scandal, dubbed as the “2G measure, which is the sum of squares of the Scam,” which led to the cancellation of 122 individual market shares of the firms in an licenses issued in 2008 [7]. A significant increase industry. The formula for the HHI is as follows: in the industry debt levels and the erosion of 2 pricing power due to excessive competition led to HHI = ∑ si firms being under severe stress, with a wave of th consolidation hitting the industry by 2019. where: si is the market share of the i firm

This paper analyses the impact of government The determinants of profitability were noticed to policy and competition on the telecom industry be using internal funds for future expansions and since 2007. the growth of operations [14].

2. LITERATURE REVIEW 3. RESEARCH METHODOLOGY

The initial licences (1995 to 2003) were bundled This is a descriptive study in which we have with startup spectrum of two blocks of 4.4MHz adopted an explanatory approach to describe the and 6.2 MHz, which could be increased to up to changes over the study period. The data two blocks of 12.5MHz based on the subscriber collected is longitudinal and is from secondary base of the operators. Between 2003 and 2006, sources. We have referred to data published by the policy was tweaked such that the licences TRAI and DoT, annual reports, published would be issued for a fixed fee and spectrum literature, and news articles from reputed would be allotted on payment of the amount as sources. The missing values identified in the data determined by the fourth-highest bid. There was have been filled by using simple averages. INR an operator holding limit of two blocks of 10MHz figures have been translated to USD using the for GSM and two blocks of 5MHz for CDMA exchange rate as on January 3 2021, Rs. 73.14 services. The global average of spectrum holding per USD. The statistics of minutes of usage per per operator was two blocks of 20MHz for GSM month per subscriber, outgo per subscriber per

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month, and average revenue per user have been service using any technology over liberalised averaged using the subscriber base of GSM and spectrum purchased at an auction. This was a CDMA users as the base. The figures have been positive step ahead of the previously restrictive standardised to represent a percentage of the licences [19]. total of individual items. From the 2012 auction onwards, the government 4. ANALYSIS AND INTERPRETATION provided the option of deferring the payment for spectrum rights won, along with interest. This 4.1 Government Regulation and increased the borrowing costs of the operators Intervention and negatively impacted their profitability.

4.1.1 Licencing and spectrum allocation In 2014, trading of the liberalised spectrum was permitted, and this opened up the opportunity for As mentioned before, DoT is the government operators to sell their underutilised spectrum with authority with the power to grant licences to other operators who faced a lack of spectrum, telecom operators and provide them with the thereby ensuring efficient utilisation of the rights to use airwaves. In 2007, the government airwaves [20]. decided to completely open up the telecom sector and allow for as much competition as 4.1.2 Revenue Share and other levies possible. They had removed the previously imposed cap on the number of operators The New Telecom Policy, 1999 provided for permitted per circle [15]. This generated operators to pay a proportion of their adjusted widespread interest, and in 2008, 120 licenses gross revenues as license and spectrum usage were granted to sixteen operators [16]. Until charges. The definition of AGR was a matter of 2007, spectrum was allotted based on licences dispute between the operators and the and specific technologies. Post-2010, all government. Adjusted gross revenues are the airwaves were allotted by way of auctions. The gross revenue net of service taxes and large number of operators coupled with a scarcity interconnection expenses. The point of conflict of airwaves led to overbidding in the 3G auctions was that telecom operators held that the gross held in 2010, garnering bids for over Rs. 1.06 revenues should only include income from trillion ($ 14.52 billion). This led to a considerable telecommunications services for which the increase in industry debt levels. The sustained license was granted, however, the government competition and scarcity of airwaves contended that it should consist of all company underpinned the success of further airwave revenues, including non-core telecom revenues. auctions held by the Department of These levies in addition to service tax and Telecommunications [17]. The auction interconnection charges, ate up 17% to 45.58% mechanism ensured that India had the cheapest over the period from 2006 to 2020. call rates, and the airwaves are among the most expensive in the world [18]. The government also The 14-year legal battle over this was settled by introduced a Unified Licence for which a one- the Supreme Court, whose verdict required the time fee of Rs. 1,650 crores ($ 0.23 billion) were telecom companies to pay Rs. 1.20 lakh crores required to be paid. With these licences, ($ 16.41 billion) in annual dues, penalty and operators could provide any telecommunication interest [21].

Table 1. Spectrum auction proceeds

Year Bid (in cr) Upfront (in cr) Deferred (in cr) 2010 1 06 262.26 1 06 262.26 .00 2012 9 407.64 5 572.22 3 835.42 2013 3 639.48 1 626.32 2 013.16 2014 60 677.36 18 267.19 42 410.17 2015 1 09 227.78 32 377.85 76 849.93 2016 65 789.12 32 434.10 33 355.02 Cumulative 3 55 003.64 1 96 539.94 1 58 463.70 Source: Department of Telecommunications

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Table 2. Licence Fee and Spectrum Usage Charges as percentage of Gross Revenues

Year Service tax and interconnection Licence Spectrum usage Total charges Fees charges Charges 2006-07 6.99% 7.76% 2.25% 17.00% 2007-08 21.42% 6.48% 2.09% 29.99% 2008-09 25.83% 6.30% 2.09% 34.21% 2009-10 24.72% 6.30% 2.26% 33.28% 2010-11 29.21% 5.84% 2.24% 37.29% 2011-12 31.14% 5.71% 2.48% 39.33% 2012-13 33.49% 5.45% 2.45% 41.39% 2013-14 32.40% 5.41% 2.62% 40.43% 2014-15 30.90% 5.53% 2.72% 39.15% 2015-16 28.84% 5.70% 2.88% 37.42% 2016-17 30.67% 5.62% 2.56% 38.85% 2017-18 38.78% 4.93% 1.87% 45.58% 2018-19 38.11% 4.96% 1.79% 44.86% 2019-20 35.81% 5.14% 1.94% 42.90% 2020-21 38.05% 4.95% 1.76% 44.76% Source: TRAI Data

4.1.3 Cash flow pressure and insolvency dues led to concerns over the viability of proceedings , which abated only when further fusion of funds was announced [27]. The industry The method of spectrum allocation followed by has now stabilised with four operators serving the Indian government has been criticised by the populace. However, this is only fragile industry leaders and analysts several times over because there is no evidence that the future the year. They contended that the government auction reserve prices will be similar to those of focused on maximising revenues by setting 2016 [28]. astronomical base prices for spectrum auctions [10,22,1]. ’s Sunil Mittal commented The bankruptcy proceedings of and that the practice of auctioning spectrum and then had reached a charging a spectrum usage fee was like selling conclusion when the National Company Law an asset and then collecting rent on it [23]. Tribunal approved bids of reconstruction Through auctions alone, conducted between company UVARC. However, the proceedings 2012 to 2016, telecom operators racked up a were halted due to bickering among the Ministry debt of Rs. 1.58 lakh crores ($ 21.67 billion) as of Corporate Affairs and the Ministry of deferred dues on which operators had to pay Telecommunications over the sale of spectrum interest to the government. The amount of rights of the companies. This has stopped the upfront payment of Rs. 1.97 lakh crores ($ 26.87 recoveries of $5.7 billion [29], ultimately billion) made to the government for spectrum defetingthe purpose of the Insolvency and rights in auctions from 2010 to 2016 made a Bankruptcy Code, 2016, which aims to resolve significant contribution to the Rs. 4.6 lakh crores corporate insolvencies in a time-bound manner ($ 62.89 billion) of debt on the books of the to boost the confidence of creditors and increase telecom operators in 2018 [24]. the availability of credit.

In a price-sensitive market, indirect taxes serve 4.2 Competition as a drag on the profits of companies. Telecom in India, although an essential service for the 4.2.1 2008 to 2016 development of a nation, is heavily taxed. The revenues are subjected to GST (previously This period saw seventeen players providing service tax), licence fees, and spectrum usage services in cellular services using either GSM or charges, in addition to customs and income tax. CDMA technology, with the maximum number of Airtel’s Sunil Mittal in 2018, and Vodafone Idea licensed cellular operators reaching 15 between CEO Balesh Sharma in 2019, mentioned that the financial years 2009-10 and 2011-12. The telecom sector is taxed as heavily as the tobacco dominant technology in the industry was GSM or liquor industries [25,26]. The demand for AGR which commanded a market share of over 70%

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throughout the entire period, as per data from taxes and interconnection charges. Thus, it can TRAI. Fig. 1 shows the market share by GSM be said that it is the pure topline made from and CDMA users. telecommunication operations. We observed a considerable difference in the Herfindahl- It is to be noted that the level of concentration in Hirschman Index during the period. The average the industry was not straight forward. Market HHI based on AGR was 0.3387, which indicates share of each company was measured based on high concentration; the same based on Subscriber share and AGR. AGR reported is the subscriber count, was 0.1445, depicting a amount of revenue earned by operators from reasonably competitive market. telecommunications operations net of indirect

GSM CDMA e r a h S

t e k r a M

Period

Fig. 1. Market Share of GSM and CDMA based on Number of Subscribers Source: TRAI Data (Refer to Appendix 1)

0.4 0.35 0.3 0.25 I

H 0.2 H 0.15 0.1 0.05 0

Quarter

Revenue Subscriber Count

Fig. 2. Market Concentration between Q4 08-09 and Q2 16-17 Source: TRAI Data (Refer to Appendix 2)

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The average HHI of 0.1445 was because the 8.92% to 17.38%. The changes to AGR during subscriber base was divided relatively equal the period are shown in Fig. 3. among the industry. The large players throughout the period were Airtel and Vodafone, The major players based on AGR – Airtel, Idea, commanding a consistent subscriber base of and Vodafone, had a significant share of the 19% to 24% and 15% to 19%, respectively. subscriber base. This indicates a situation where Reliance Communications had a market share of the smaller players were charging lower prices to 17% during the fourth quarter of 2008-09 and lost gain a higher subscriber share. Several ground to end up at 9.57% by the first quarter of executives and experts in the media had 2016-17. Similarly, BSNL lost, and Idea gained addressed this situation as a “price war”. The ground during the same period with their price war led to erosion of earnings for the subscriber base from 19.01% to 9.73% and overall industry, as is evident by the trend of 9.05% to 16.59%, respectively. Aircel, Tata ARPU. Although the number of subscribers Communications and the Indian arm of Telenor increased, the average revenue earned declined were medium-sized players consistently during the period. This was due to a decline in throughout the period. the price charged to the customers per minute (average outgo per minute). The average HHI of 0.3387 was because, unlike the subscriber base, the AGR was not divided As can be seen in Fig. 5, despite an increase in fairly equal among the industry. As opposed to the overall subscriber base and relative stability four or five large players based on subscriber in the minutes of usage per subscriber, the base, there were three large players each of ARPU and average outgo per minute fell from whom had over 16% of the market size by Rs. 272.82 ($3.73) per user and Rs. 1.04 revenue. Airtel and Vodafone were consistently ($0.0146) per minute in the first quarter of 2007- large, with Vodafone increasing their market 08 to Rs. 124.10 ($1.70) per user and Rs. 0.48 share from 16.43% to 20.06% during the period, ($0.0066) per minute in the last quarter of 2015- while Airtel held its own with a fairly consistent 16. Due to capital input, the declining average market share of 28.79%. BSNL lost out fundamentals of the industry, coupled with high on its market share from a dominant 23.58% in debt service costs, put cash flow pressures on the fourth quarter of 2008-09 to a middling 6.98% the companies. The intense competition to gain a in the first quarter of 2016-17. higher share of the subscriber base and all the gained market share during the period from players’ delicate cash flow situation meant that

09-10 10-11 11-12 12-13 13-14 14-15 15-16

Aircel Airtel BPL/Loop BSNL DB HFCL/Quadrant Idea MTNL RCOM S Tel Spice SSTL TATA Unitech/Telewings/Telenor Videocon Vodafone

Fig. 3. Market share of operators based on subscriber count Source: TRAI Data

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09-10 10-11 11-12 12-13 13-14 14-15 15-16

Aircel Airtel BPL/Loop BSNL Etisalat DB HFCL/Quadrant Idea MTNL RCOM S Tel Spice SSTL TATA Unitech/Telewings/Telenor Videocon Vodafone

Fig. 4. Market share of operators based on AGR Source: TRAI Data

Subscriber Base ARPU MoU Outgo PM

Fig. 5. Per User Trends between 2007-08 to 2015-16 Source: TRAI Data (Refer to Appendix 3) the industry was ripe for consolidation. However, caved under the pressure of a behemoth of an only four operators exited the industry during this upstart, Jio Infocomm (Previously Reliance Jio period – operations of Spice Telecom were Infocomm). merged with Idea Cellular. Etisalat DB and S-Tel called it quits after the Honourable Supreme 4.2.2 2016 to 2020 Court cancelled all the telecom licenses issued to it on the grounds of graft, and Loop’s assets and In February 2016, Reliance Industries Ltd (RIL) operations were acquired by Airtel [30,31]. was India’s most profitable country and was Further consolidation in the industry came after ranked 215th on the Fortune Global 500 list [32]. the resilient mid-sized and small-sized operators RIL, in 2013, controlled Infotel Broadband

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Services Ltd paid Rs. 1,658 crores towards opted to provide voice calls over IP, which would obtaining a unified licence to enable them to drastically bring down the cost of providing provide cellular services on any liberalised services. As mentioned before, the nature of the spectrum [33]. This marked the beginning of the telecom industry is such that even a previously disruptive behemoth, Jio Infocomm (Jio). In the net-debt free entity like RIL had a total debt of financial years 2014-15, 2015-16 and 2016-17 Rs. 1.6 lakh crores ($21.88 billion) against cash (till September 2016), Jio spent Rs. 1.12 lakh and cash equivalents of Rs. 84,472 crores crores ($ 15.37 billion) on developing and ($11.55 billion) [34]. On September 2, 2016, the deploying Fourth Generation cellular services pricing of services was revealed to the public. It technology, and committed to pay Rs. 65,553 was revealed that Jio would offer 1GB of 4G data crores ($8.96 billion) for acquiring spectrum at Rs. 50 ($0.68) and voice calls will be free for a rights. Extract from the balance sheets of Jio is lifetime [35]. Not only were the significant as follows Table 3. investments in technology and spectrum rights backed by the cash-rich RIL, but the launch On December 27 2015, Jio’s 4G services were pricing was also fueled by the cash generated by officially unveiled to the world. The company the refining operations of RIL. The competitors of

Table 3. Non-Current Assets and Liabilities of Jio (all figures in crores rupees)

Particulars 2014- 2015- 2016- 2017- 2018- 2019- 15 16 17 18 19 20 Non-Current Assets Property, Plant and Equipment 882 937 972 95 769 74 633 1 02 864 Capital Work in Progress 33 701 64 687 1 12 61 025 30 965 21 176 424 Intangible Assets 4 3 2 59 760 59 367 60 563 Intangible Assets under Development 26 595 41 385 65 553 8 962 3 643 82 Non - Current Liabilities Borrowings 18 691 30 067 38 436 35 192 65 613 0 Deferred Payment Liabilities towards 7 388 13 821 20 137 20 209 18 839 18 839 Spectrum Source: Company Annual Reports

16-17 16-17 16-17 16-17 17-18 17-18 17-18 17-18 18-19 18-19 18-19 18-19 19-20 19-20 19-20 19-20 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Subscriber Base ARPU MoU Outgo PM

Fig. 6. Per User Trends between 2015-16 to 2019-20 Source: TRAI Data (Refer to Appendix 3)

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Jio criticised them for subsidising the prices with suite of entertainment and utility apps. The oil money in a bid to capture market share. telecom venture was, in essence, a data highway However, the true disruption lay in the approach connecting the masses to the internet, and it was of RIL. The launch of Jio was accompanied by a the services provided over the internet that would push in the development of Reliance Retail and a be monetised [36].

35.00%

30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00% 16-17 17-18 18-19 19-20

Aircel Airtel BSNL HFCL/Quadrant Idea Jio MTNL RCOM SSTL TATA Unitech/Telewings/Telenor VI Videocon Vodafone

Fig. 7. Market share of operators based on subscriber count Source: TRAI Data

45.00% 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% -5.00% 16-17 17-18 18-19 19-20 Aircel Airtel BPL/Loop BSNL Etisalat DB HFCL/Quadrant Idea Jio MTNL RCOM S Tel Spice SSTL TATA Unitech/Telewings/Telenor VI Videocon Vodafone

Fig. 8. Market share of operators based on AGR Source: TRAI Data

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0.45

0.4

0.35

0.3

0.25 I H H 0.2

0.15

0.1

0.05

0 16-17 16-17 17-18 17-18 17-18 17-18 18-19 18-19 18-19 18-19 19-20 19-20 19-20 19-20 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Quarter

Fig. 9. Market Concentration between Q3 16-17 to Q4 19-20 Source: TRAI Data (Refer to Appendix 2)

Close to 70% of the telecom sector’s revenues 5. CONCLUSION were from voice calls which were now being offered for free. The Jio approach proved to be Although the final nail in the coffin was the the driving force behind the consolidation the launch of Jio, which changed the rules of the industry saw during the two years from game, it must be understood that the government September 2016 [37]. The operations and policies contributed significantly to the inability of spectrum rights of and the incumbents to react to the pricing strategy of Telenor were acquired by Airtel, and Idea and Jio. The government regulations permitted Vodafone merged to form a new entity – several operators to enter the market, set high Vodafone Idea. Reliance Communications reserve prices at spectrum auctions, and heavily attempted a 3-way merger with Sistema and taxed the industry. The ensuing wave of Aircel. However, could only merge the operations consolidation managed to bring the amount of of Sistema. Subsequently, Videocon, Aircel and competition to be in line with other countries ie. Reliance Communications filed for bankruptcy 3-4 operators in a country. The introduction of and are currently in the middle of bankruptcy unified licences and the liberalisation of proceedings [38]. spectrum purchased in an auction, revamped the licence system and done away with business- After the wave of consolidation, the market in specific or technology-specific licences 2019-20 has four prominent players – Jio, Airtel, previously issued. Vodafone Idea, and BSNL. They serve 98.99% of the telecom subscriber base (Fig. 7), with the The spectrum management policy of the remainder 1.01% being served by MTNL, Tata government is a lingering matter of concern. The Communications and Reliance Communications fragile stability in the industry can be easily (the latter two being enterprise services). These undone if the reserve prices in future auctions four players have 96.41% of the industry AGR. are kept at expensive levels as has been the practice till now. Considering the importance of The consolidation led to a change in pricing the industry on the development of the country, it power, as the convergence can be seen in Fig. 9. is advisable that the government not indulge in All operators have similar levels of pricing per the practice of selling spectrum rights at high subscriber. In the third quarter of 2018-19, the prices and then collecting rent on it as revenue HHI based on revenue was 0.2753 and based on share. subscriber base was 0.2715.

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18. Toness, B. V. (2015, March 30). Mobile Available:https://www.livemint.com/industry call rates set to rise as telcos garner funds /telecom/taxes-on-telecom-similar-to-non- for spectrum bill. Livemint. essential-items-like-liquor-vodafone-idea- https://www.livemint.com/Industry/JvMxCZ ceo-1555508294190.html WHYNZWYeQFBC4QSK/Mobile-call- 27. PTI. We may be down to two telcos if the rates-set-to-rise-as-telcos-garner-funds- third one doesn’t put in capital: Sunil Mittal. for-spe.html Livemint; (2020b, August 25).. 19. Ghosh, S. (2013, March 8). No bar on Available:https://www.livemint.com/industry BWA spectrum holders for voice services: /telecom/we-may-be-down-to-2-telcos-if- DoT. Livemint. the-third-one-doesn-t-put-in-capital-sunil- Available:https://www.livemint.com/Industr mittal-11598355668868.html y/tZ2wA8sa2XY1BbHXCtzD7M/DoT-says- 28. Guha I. Next spectrum auction could be there-was-never-any-bar-on-BWA- repeat of 2016, say experts. Livemint; spectrum-holders-for.html (2020, October 7). 20. Ghosh, S. (2015, September 10). Stage Available:https://www.livemint.com/industry set for telecom consolidation. Livemint. /telecom/next-spectrum-auction-could-be- Available:https://www.livemint.com/Politics/ repeat-of-2016-say-experts- pfY34SKSwqJSN7wnoqOt6J/Cabinet- 11602088182863.html approves-spectrum-trading-norms.html 29. Livemint. $6 billion telecom bankruptcies 21. PTI. (2020a, February 17). Payment of left hanging in India as ministries argue. AGR dues to bring down fiscal deficit to Livemint; (2020, September 25). 3.5% in FY20: SBI. Livemint. Available:https://www.livemint.com/industry Available:https://www.livemint.com/industr /telecom/-6-billion-telecom-bankruptcies- y/telecom/payment-of-agr-dues-to-bring- left-hanging-in-india-as-ministries-argue- down-fiscal-deficit-to-3-5-in-fy20- 11601012232629.html 11581941336177.html 30. Ghosh S. Loop Telecom to shut, seeks 22. Philipose M. Telecom: strangling the Rs3,800 crore. Livemint; (2012, April 10). goose that lays the govt’s golden eggs. Available:https://www.livemint.com/Compa Livemint; (2016, March 17). nies/n6SXHXVbCnwliriICBO1ZM/Loop- Available:https://www.livemint.com/Money/ Telecom-to-shut-seeks-Rs3800-crore.html DTLhUU8um19M4SDQkO523M/Telecom- 31. Mishra AK, Ghosh S, Sanjai PR. The strangling-the-goose-that-lays-the-govts- curious case of Airtel’s Loop buyout. golden-eg.html Livemint; (2014, October 15). Available:https://www.livemint.com/Industr 23. Shrivastava B, Kumar S. Airtel’s Sunil Bharti Mittal sees more telecom price pain y/L2JmiP3gddvNNJtag51DCN/The- as govt mulls relief. Livemint; (2017, curious-case-of-Airtels-Loop-buyout.html November 24). 32. Rishi B, Kacker A, Gupta S. Entry of Reliance Jio in the telecom industry: a Available:https://www.livemint.com/Industr ripple in the ocean. Emerald Emerging y/EvYydWgAlg5YugB4HIh1cN/Airtels- Markets Case Studies. 2018;8(3):1–17. Sunil-Bharti-Mittal-sees-more-telecom- DOI:https://doi.org/10.1108/EEMCS-07- price-pain-as.html 2017-0167 24. Livemint. India’s telecom industry: Survival 33. Datta A. Reliance Jio gets unified telecom of the fittest. Livemint; (2018, March 1). licence. Livemint; (2013, October 25). Available:https://www.livemint.com/Opinion Available:https://www.livemint.com/Compa /WBHke2KCy8RztkusVjFmKO/Indias- nies/PgpsIsAiOsHF0HaI6MOVwL/Reliance telecom-industry-Survival-of-the-fittest.html -Jio-gets-unified-telecom-licence.html 25. PTI. Telecom sector highly taxed like 34. Mukherjee P, Pillay A. Reliance Jio launch tobacco industry, says Sunil Mittal. in December, says Mukesh Ambani. Livemint; (2018, October 25). Livemint; (2015, June 13). Available:https://www.livemint.com/Compa Available:https://www.livemint.com/Compa nies/iQRgRkO48ylITWuQxauGbN/Teleco nies/nwFRWTlp73IEeX0nMX2GvK/Mukes m-sector-highly-taxed-like-tobacco- h-Ambani-sets-December-date-for- industry-says-Suni.html Reliance-Jio-launch.html 26. PTI. Taxes on telecom similar to non- 35. Khanna S, Pathak K. Reliance Jio sends a essential items like liquor: Vodafone Idea message to rivals: It’s war. Livemint; CEO. Livemint; (2019, April 17). (2016, September 2).

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APPENDIX

1. Market Share of GSM and CDMA Services

Period GSM CDMA 07-08 Q1 73.43% 26.57% 07-08 Q2 73.65% 26.35% 07-08 Q3 73.72% 26.28% 07-08 Q4 73.81% 26.19% 08-09 Q1 74.08% 25.92% 08-09 Q2 74.11% 25.89% 08-09 Q3 74.44% 25.56% 08-09 Q4 75.88% 24.12% 09-10 Q1 76.96% 23.04% 09-10 Q2 78.56% 21.44% 09-10 Q3 80.29% 19.71% 09-10 Q4 81.92% 18.08% 10-11 Q1 83.02% 16.98% 10-11 Q2 84.12% 15.88% 10-11 Q3 85.31% 14.69% 10-11 Q4 86.05% 13.95% 11-12 Q1 86.57% 13.43% 11-12 Q2 87.13% 12.87% 11-12 Q3 87.93% 12.07% 11-12 Q4 88.56% 11.44% 12-13 Q1 89.05% 10.95% 12-13 Q2 89.21% 10.79% 12-13 Q3 91.01% 8.99% 12-13 Q4 91.50% 8.50% 13-14 Q1 91.84% 8.16% 13-14 Q2 92.77% 7.23% 13-14 Q3 92.98% 7.02% 13-14 Q4 93.69% 6.31% 14-15 Q1 93.93% 6.07% 14-15 Q2 94.19% 5.81% 14-15 Q3 94.37% 5.63% 14-15 Q4 94.62% 5.38% 15-16 Q1 94.91% 5.09% 15-16 Q2 95.17% 4.83%

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2. Market Concentration based on HHI

Period HHI Based on Revenue Subscriber Count 08-09 Q4 0.3172 0.1594 09-10 Q1 0.3188 0.1585 09-10 Q2 0.3774 0.1572 09-10 Q3 0.3171 0.1536 09-10 Q4 0.3230 0.1498 10-11 Q1 0.3211 0.1469 10-11 Q2 0.3214 0.1429 10-11 Q3 0.3253 0.1387 10-11 Q4 0.3274 0.1371 11-12 Q1 0.3217 0.1359 11-12 Q2 0.3219 0.1356 11-12 Q3 0.3269 0.1344 11-12 Q4 0.3341 0.1335 12-13 Q1 0.3321 0.1347 12-13 Q2 0.3329 0.1349 12-13 Q3 0.3384 0.1359 12-13 Q4 0.3467 0.1407 13-14 Q1 0.3468 0.1429 13-14 Q2 0.3419 0.1432 13-14 Q3 0.3413 0.1436 13-14 Q4 0.3466 0.1441 14-15 Q1 0.3483 0.1443 14-15 Q2 0.3500 0.1443 14-15 Q3 0.3593 0.1454 14-15 Q4 0.3526 0.1467 15-16 Q1 0.3591 0.1478 15-16 Q2 0.3576 0.1483 15-16 Q3 0.3601 0.1501 15-16 Q4 0.3591 0.1516 16-17 Q1 0.3342 0.1539 16-17 Q2 0.3527 0.1541 16-17 Q3 0.3706 0.1451 16-17 Q4 0.3975 0.1427 17-18 Q1 0.4036 0.1448 17-18 Q2 0.3305 0.1451 17-18 Q3 0.3371 0.1548 17-18 Q4 0.3668 0.1680 18-19 Q1 0.3520 0.2040 18-19 Q2 0.2638 0.1904 18-19 Q3 0.2753 0.2715 18-19 Q4 0.2788 0.2687 19-20 Q1 0.2739 0.2689 19-20 Q2 0.2938 0.2736 19-20 Q3 0.2965 0.2729 19-20 Q4 0.2881 0.2736

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3. Per user Trends

Quarter Total Subscriber Base Average Revenue Minutes of Average Outgo Per (mn) per User Usage Minute 07-08 Q1 184.92 272.82 472.28 1.04 07-08 Q2 209.07 248.13 449.09 0.95 07-08 Q3 233.62 238.66 440.61 0.95 07-08 Q4 261.07 236.50 462.10 0.89 08-09 Q1 286.87 213.08 465.86 0.80 08-09 Q2 315.31 195.37 455.77 0.76 08-09 Q3 346.89 192.14 463.80 0.74 08-09 Q4 391.76 179.43 453.37 0.71 09-10 Q1 427.29 163.57 428.19 0.70 09-10 Q2 471.72 147.92 398.35 0.68 09-10 Q3 525.09 131.78 392.67 0.62 09-10 Q4 584.32 121.06 391.38 0.56 10-11 Q1 635.5 113.85 383.68 0.54 10-11 Q2 687.71 104.12 354.50 0.54 10-11 Q3 752.19 99.57 346.78 0.51 10-11 Q4 811.59 95.26 337.00 0.50 11-12 Q1 851.69 93.43 329.77 0.50 11-12 Q2 873.62 90.17 318.00 0.50 11-12 Q3 893.85 93.22 319.21 0.51 11-12 Q4 919.17 94.48 332.62 0.49 12-13 Q1 934.1 92.81 333.19 0.48 12-13 Q2 906.62 93.17 329.38 0.48 12-13 Q3 864.72 96.38 347.40 0.47 12-13 Q4 867.81 104.15 373.82 0.48 13-14 Q1 873.36 109.94 379.03 0.49 13-14 Q2 870.59 108.21 366.83 0.51 13-14 Q3 886.3 111.44 371.49 0.51 13-14 Q4 904.51 113.43 381.80 0.50 14-15 Q1 914.92 118.57 383.50 0.51 14-15 Q2 930.2 115.65 369.67 0.50 14-15 Q3 943.97 117.49 369.58 0.51 14-15 Q4 969.89 119.35 376.65 0.50 15-16 Q1 980.81 125.03 381.64 0.49 15-16 Q2 996.66 121.23 368.30 0.48 15-16 Q3 1010.89 122.07 370.25 0.47 15-16 Q4 1033.63 124.10 375.84 0.48 16-17 Q1 1035.12 125.00 371.46 0.49 16-17 Q2 1049.74 121.53 364.43 0.48 16-17 Q3 1127.37 104.49 358.60 0.44 16-17 Q4 1170.18 83.52 403.32 0.31 17-18 Q1 1186.84 80.39 426.39 0.27 17-18 Q2 1183.04 84.33 435.16 0.23 17-18 Q3 1167.44 79.14 493.28 0.19 17-18 Q4 1183.41 76.01 582.10 0.16 18-19 Q1 1146.5 68.89 606.45 0.18 18-19 Q2 1169.29 67.00 627.00 0.12 18-19 Q3 1176 70.00 667.00 0.11 18-19 Q4 1161.81 71.00 692.00 0.13 19-20 Q1 1165.46 74.00 701.00 0.13 19-20 Q2 1173.75 74.00 691.00 0.13 19-20 Q3 1151.44 79.00 712.00 0.11 19-20 Q4 1157.75 91.00 750.00 0.06 ______© Copyright Global Press Hub. All rights reserved.

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