Telecom Industry: An overview
Telecommunication industry of India is the second largest telecom network after china. It is the
world's fastest growing telecommunications industry, with 671.69 Million telephone (landlines and
mobile) subscribers as of June 2010. A very large population, under penetrated market and growing
per capita income makes it an attractive destination for investment and growth. The tariffs have
gone down from whooping Rs 27/min in 2000 to 1p/2sec in recent times. The catch here lies in
volumes in terms of no of subscribers, spending in Value added services and reduction of
operational expenditure. The Telecommunications sector is primarily engaged in operating, and/or
providing access to facilities for the transmission of voice, data, text, sound, and video.
Transmission facilities may be based on a single technology or a combination of technologies.
Establishments in the Telecommunications sector are grouped into four industry groups. The first
three are comprised of establishments that operate transmission facilities and infrastructure that
they own and/or lease, and provide telecommunications services using those facilities. The
distinction among the first three industry groups is the type of infrastructure operated (i.e., wired,
wireless, or satellite). The fourth industry group is comprised of establishments that provide
support activities, telecommunications reselling services, or many of the same services provided by
establishments in the first three industry groups, but do not operate as telecommunications
carriers. The success of the sector can be attributed largely to the growth in the wireless segment,
with the operators reporting additions of approximately 10-15 million subscribers every month.
Mobile Subscribers
1,800,000
1,600,000
1,400,000
1,200,000
Mobile Subscribers
1,000,000
800,000
600,000
400,000
200,000
0
2007 2008 2009 2010f 2011f 2012f 2013f 2014f
The overall tele-density in India reached 52.74%. Over the period 1998-2009 the number of telecom
subscribers in India grew at a CAGR of 33.44%. Mobile penetration rates had reached 44.9% at the
end of 2009, revealing that maturity has yet to be reached in rural markets, where two-thirds of
India’s population resides. As per the data of mobile market share, Bharti Airtel leads with over
22.6% market share followed by reliance and Vodafone. Government operated BSNL captures a
market of 12% covering 23 circles.
Telecoms network still connect only about 4,500 towns and cities and 65,000 villages in the country.
To extend network coverage, India’s mobile operators are in the process of extending their
infrastructures to rural parts of the country. This is expected to push up penetration rates
significantly over the next few years. The share of fixed line users is declining due to reduction in
mobile tariffs. BSNL is market leader in fixed line segment owing to its huge infrastructure covering
several villages and towns.
Fixed Line Subscribers
40000
39000
38000
37000
36000 Fixed Line Subscribers
35000
34000
33000
32000
31000
30000
2007 2008 2009 2010f 2011f 2012f 2013f 2014f
The latest data that has been made available for India’s fixed-line urban/rural split is for the quarter
ended September 2009 as provided by the TRAI. Market-dominant BSNL retained a stronghold in
both the urban and rural markets. The operator had a 67.5% share of the urban market with a total
base of 18.36mn lines, while it enjoyed a monopolistic status in the rural market, with a share of
99.6% through its 10.09mn lines.
There is greater diversity in the urban fixed-line markets with no less than seven operators
providing services, compared to the rural market’s four operators; Reliance is the fourth operator in
the rural market but has yet to deploy services despite owning a license. Within rural India, a focal
point of BSNL fixed-line network deployment strategy has been the development of rural public
telephones (VPTs). According to the regulator, there are 593,731 villages in India (figures are based
on the 2001 census). Liberalization policy and some socio-economic factors are mainly responsible
for the immense growth in the sales volumes. The lifestyle of the people has changed. They need to
be connected to the other people all the time. With the lowering down of the tariffs the
affordability of the mobile phones has increased. The finance sector has also come up with loans for
handsets on 0% interest rate. Mobile services providers are also expanding their coverage area by
installing more and more antennas and other equipments. The telecom sector in the country has
already adopted the latest technological advancements to cater to the demands of the growing
market. Telecom Expo India, Convergence India, VAS India and IPTV India being organized year to
year are all efforts in this direction. Also, the telecom industry is focusing more on rural areas to
connect them with the urban areas so that the farmers and the small-scale industries can have
faster access to information related to whether conditions. With the coming of more and more
projects, the telecom industry is going for higher scale recruitments. There is a huge demand for
software engineers, mobile analysts, and hardware engineers for mobile handsets. Besides, there
are ample opportunities for marketing people whose services are required to capture more and
more customer base. The new projects, setting up of new service bases, expansion of coverage
areas, network installations, maintenance, etc are providing more and more employment
opportunities in the telecom sector. Given the exciting times ahead, the sector is a huge
employment generator, likely to generate over 3 lakh new jobs over the coming 5 years. There is a
huge demand for qualified and skilled professionals with technical knowledge and hands on
experience. In order to fulfill their rapid growth plans, players lure talent with handsome rewards.
Suitably skilled candidates can expect a significant premium salary even at the starting level, due to
the challenges the industry is facing in terms of finding and recruiting proper talent. Industry
experts believe that the talent crunch in this sector will push salaries even further than the current
15% hike.
