PROJECT ON TELECOM INDUSTRY – A LEADING INDIAN SECTOR SUBMITTED BY RAIHAAN ESMAIL PROJECT GUIDANCE Prof:- SHARON MENEZES In the fulfilment of the requirement for the degree of Bachelor of Management Studies UNIVERSITY OF MUMBAI TYBMS ACADEMIC YEAR 2012-2013 CERTIFICATE This is to certify that RAIHAAN ESMAIL of T.Y. Bachelor of Management Studies 2012- 2013 has successfully completed the project on Telecom Industry – A Leading Indian Sector under the guidance of Ms Sharon Menezes and has submitted the same to the University of Mumbai in partial fulfilment of the requirement of the Bachelors of Management Studies Courses. Course coordinator Principal Signature of the External Examiner DECLARATION I, Raihaan Esmail, hereby declare that I have successfully completed the project on Telecom Industry – A Leading Indian Sector for the academic year 2012-2013. The project is done under the guidance of Prof. Sharon. This project work is submitted in fulfilment of the requirements for the award of the degree of ―Bachelor of Management studies‖. The information provided in the project is true and to the best of my knowledge. Date:- Signature of the Student ROLL NUMBER 112 TYBMS B ACKNOWLEDGEMENT ―Success can never be attained without valuable guidance.‖ The project titled ―TELECOM INDUSTRY – A LEADING INDIAN SECTOR‖ is the product of the support and guidance extended by the institute. It is not just the attempt to enrich myself with the last learning experience with the institute as a part of the curriculum but to do justice to my mentor‘s efforts in grooming me as a professional, spanning over three years of my course. During the perseverance of this project, I was supported by different people, whose names if not mentioned, it would be inconsiderate on my part. I want to grab this opportunity to acknowledge my sincere thanks to all of them while submitting this report. To start with, I would like to thank my project guide, PROF. SHARON MENEZES whose help and guidance has been of immense value throughout the completion of this project. She has helped me with all the problems I faced during the completion of the project. She also kept a constant supervision and made me available with all the sources for necessary information that would be required for the project. Last but not the least; I would like to thank my peers, colleagues, friends and all those who have helped me in bringing out my best to make this project a success. INDEX SR. NO TOPIC PAGE 1 HOW IT ALL BEGAN IN 7 – 8 INDIA & FIRST MEDIUM OF COMMUNICATION 2 THE FIRST FEW 9 – 11 COMPANIES 3 LIBERALIZATION & 12 – 13 PRIVATIZATION 4 PROGRESS IN THE 14 – 20 SECTOR 5 REASONS FOR GROWTH 21 – 22 IN THIS SECTOR 6 GOVERNMENT ROLE IN 23 – 29 THE TELECOM INDUSTRY 7 MAJOR COMPANIES & 30 – 37 PERSONALITIES 8 THE MARKETSHARE OF 38 – 42 COMPANIES 9 DIFFERENT 43 – 46 ENVIRONMENTS THE INDUSTRY IS AFFECTED BY 10 FDI IN THE SECTOR 47 – 48 11 INVENTION OF 3G 49 – 54 12 FEW FASCINATING 55 – 56 FACTS ABOUT THE SECTOR 13 INTERESTING 57 -63 STATISTICS OF THE INDUSTRY 14 2G SPECTRUM SCAM – 64 – 69 CASE STUDY 15 MANDATORY 70 – 71 DIGITIZATION OF CABLE TV 16 INDIAN TELECOM 72 – 78 SECTOR – AN INTERNATIONAL SUCCESS STORY 17 OPPORTUNITIES & 79 – 82 UNTAPPED MARKETS 18 CONCLUSION 83 – 84 19 BIBLIOGRAPHY 85 HOW IT ALL BEGAN IN INDIA & FIRST MEDIUM OF COMMUNICATION The history of Indian telecom can be started with the introduction of telegraph. The Indian postal and telecom sectors are one of the world‘s oldest. In 1850, the first experimental electric telegraph line was started between Kolkata and Diamond Harbour. In 1851, it was opened for the use of the British East India Company. The Posts and Telegraphs department occupied a small corner of the Public Works Department, at that time. In 1880, two telephone companies namely The Oriental Telephone Company Ltd. and The Anglo-Indian Telephone Company Ltd. approached the Government of India to establish telephone exchanges in India. The permission was refused on the grounds that the establishment of telephones was a Government monopoly and that the Government itself would undertake the work. In 1881, the Government later reversed its earlier decision and a licence was granted to the Oriental Telephone Company Limited of England for opening telephone exchanges at Kolkata, Mumbai, Chennai and Ahmedabad and the first formal telephone service was established in the country. On 28 January 1882, Major E. Baring, Member of the Governor General of India's Council declared open the Telephone Exchanges in Kolkata, Bombay and Chennai. The exchange in Kolkata named the "Central Exchange" had a total of 93 subscribers in its early stage. Later that year, Mumbai also witnessed the opening of a telephone exchange. THE TELEGRAPH Telegraph is the long-distance transmission of messages without the physical exchange of an object bearing the message. Thus semaphore is a method of telegraphy whereas pigeon post is not. 4,000 miles (6,400 km) of telegraph lines were constructed connecting Kolkata (then Calcutta) and Peshawar in the north along with Agra, Mumbai (then Bombay) through Sindwa Ghats, and Chennai (then Madras) in the south, as well as Ootacamund and Bangalore was started in November 1853.. A separate department was opened in 1854 when telegraph facilities were opened to the public. Telegraphy requires that the method used for encoding the message be known to both sender and receiver. Such methods are designed according to the limits of the signalling medium used. The use of smoke signals, beacons, reflected light signals, and flag semaphore signals are early examples. In the 19th century, the harnessing of electricity brought about the means to transmit signals via electrical telegraph. The advent of radio in the early 1900s brought about radiotelegraphy and other forms of wireless telegraphy. In the Internet age, telegraphic means developed greatly in sophistication and ease of use, with natural language interfaces that hide the underlying code, allowing such technologies as electronic mail and instant messaging. Telegraphs have existed in Europe from as early as 1792 in the form of semaphore lines, or optical telegraphs, that sent messages to a distant observer through line-of-sight signals. In 1837, American artist-turned inventor Samuel F. B. Morse conducted the first successful experiment with an electrical recording telegraph. A telegraph message sent by an electrical telegraph operator or telegrapher using Morse code (or a printing telegraph operator using plain text) was known as a telegram. A cablegram was a message sent by a submarine telegraph cable, often shortened to a cable or a wire. Later, a Telex was a message sent by a Telex network, a switched network of teleprinters similar to a telephone network. Optical, electrical and wireless are different types of telegraphies. THE FIRST FEW COMPANIES In the year 1975 Department of Telecom (DoT) was responsible for telecom services in entire country after separation from Indian Post & Telecommunication. Decade later Mahanagar Telephone Nigam Limited (MTNL) was chipped out of DoT to run the telecom services of Delhi and Mumbai. In 1990s the telecom sector was opened up by the Government for private investment. In1995 TRAI (Telecom Regulatory Authority of India) was setup. This reduced the interference of Government in deciding tariffs and policy making. The Government of India corporatized the operations wing of DoT in 2000 and renamed Department of Telecom as Bharat Sanchar Nigam Limited (BSNL). In last 10 years many private operator‘s especially foreign investors successfully entered the high potential Indian telecom market. Globally acclaimed operators like Telenor, NTT Docomo, Vodafone, Sistema, SingTel, Maxis, Etisalat invested in India mobile operators. DEPARTMENT OF TELECOM The Department of Telecommunications (abbreviated as DoT) is part of the Ministry of Communications and Information Technology in the executive branch of the Government of India. Telecom services have been recognized the world-over as an important tool for socio- economic development for a nation and hence telecom infrastructure is treated as a crucial factor to realize the socio-economic objectives in India. Accordingly, the Department of Telecom has been formulating developmental policies for the accelerated growth of the telecommunication services. The Department is also responsible for grant of licenses for various telecom services like Unified Access Service Internet and VSAT service. The Department is also responsible for frequency management in the field of radio communication in close coordination with the international bodies. It also enforces wireless regulatory measures by monitoring wireless transmission of all users in the country. BHARAT SANCHAR NIGAM LIMITED (BSNL) Bharat Sanchar Nigam Limited (abbreviated BSNL) is an Indian state-owned telecommunications company headquartered in New Delhi, India. It is the largest provider of fixed telephony and fourth largest mobile telephony provider in India, and is also a provider of broadband services. However, in recent years the company's revenue and market share plunged into heavy losses due to intense competition in Indian telecommunications sector. BSNL is India's oldest and largest communication service provider (CSP). It had a customer base of 95 million as of June 2011. It has footprints throughout India except for the metropolitan cities of Mumbai and New Delhi, which are managed by Mahanagar Telephone Nigam (MTNL). BSNL then known as the Department of Telecommunications had been a near monopoly during the socialist period of the Indian economy. During this period, BSNL was the only telecom service provider in the country. MTNL was present only in Mumbai and New Delhi. During this period BSNL operated as a typical state-run organization, inefficient, slow, bureaucratic, and heavily unionised. As a result subscribers had to wait for as long as five years to get a telephone connection.