Transcript Slide 1

LIBERALISATION ERA FOR
INDIAN TELECOM REGULATION
INDUSTRY WORKSHOP
by
Rakesh Agrawal, ITS (Retd,)
Director, CMAI
Former Advisor Technology, DOT
Government of India
24th August, 2009
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2
SCENARIO IN EARLY INDIA
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In 1975, the Department of Telecom (DoT)
was separated from P&T.
DoT was responsible for telecom services
in entire country until 1985
Mahanagar Telephone Nigam Limited
(MTNL) was carved 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 as a part of LiberalisationPrivatization-Globalization policy.
SUPPLY AND DEMAND – 1981 TO 2001
DEL: SUPPLY AND DEMAND
WAITING LIST,DEL AND TOTAL DEMAND
(million)
40
35
30
25
20
15
10
5
0
YEAR ENDING MARCH 31
India
Teledensity
1.29
(1995)
3.38
(2001)
Total demand
Waiting List
Del
Government initiatives in Telecom
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1992- Private players were allowed in Value Added
Services
National Telecom Policy 1994
 Private sector to Supplement Government
 Provide world class telecom service at affordable
cost
Establishment of Telecom Regulatory Authority of
India (1997)
New Telecom Policy 1999
 Transition from Fixed license fee to Revenue
Share
 Introduction of Free Competition
 Technology Neutral Licenses
Govt. initiative in Telecom……
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Establishment of Telecom Dispute Settlement
Appellant Tribunal (2000)
BSNL was established by DoT
Opening of National & International Long Distance2002
Establishment of Universal Service Obligation Fund
Reduction of licence fees-2002
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2003- Calling Party Pays (CPP) was implemented
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2003- Unified Access Licensing (UASL) regime
introduced
2003- Reference Interconnect order was issued
Government Initiative
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Cont..
2004-Intra-circle merger guidelines established
2004-Broadband policy formulated—targeting 20
million subscribers by 2010
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2005-Attempted to boost Rural telephony
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2005-Number portability proposed (Expected Dec 2009)
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2005-FDI limit was increased from 49 to 74 percent
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2007-3G Spectrum Auctioning process . BSNL/MTNL
Launched.
2008 Decision on 3G services (awaited)
POLICY INITIATIVES HAVE FUELLED
GROWTH
16
Effective Charge (in Rs Per min)
Subscriber Base( in mn) Low ering of ADC from 1.5% to 0%
300
14
14
14
Low ering of ADC from 10% to 1.5%
of the revenue
NTP'99
12
Low ering of ADC from 30% to 10% of
the revenue
10
6
6
4
3rd & 4th Cellular
Operator
3.58
2
0
2
0.88
1998
1.2
1999
1.88
2000
3.58
2001
CPP
Introduced
6.5
2002
1.6
13
2003
52
33
0.44
2004
0.4
2005
150
100
97
Introduction of
CDMA
250
200
166
8
261
50
0.4
2006
0.4
2007
0.4 0
2008
All points of inflexion have yielded positive benefits for
the industry as well as the customers
Mobile Subscriber base (in
mn)
Effective Charge (in Rs
per min )
of the revenue
GROWTH TREND OF WIRELESS SUBSCRIBERS
INDIAN TELECOM TODAY
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World’s fastest Growing Telecom Market – 10-15
Mn. subscriber addition per month
Second largest in the world after China
430 Mn . Subscribers, Including wireless = 392
Mn.
Retail Market for Mobile Phones, accessories etc.
is worth over US$ 15 Billion and growth 15%
Internet Subscribers 10 Mn. Internet Mobile
31.30 Mn. Broadband 6.22 Mn.
INTERNET SUBSCRIBERS
2008-2009: 13.54mn
Urban & Rural Teledensity in India
Teledensity (%)
50
40
30
20
10
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
At Year Ending March
Urban
Total
TELEDENSITY March 2009: About 38%
Rural
The Future…
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2010
Telephone subscribers: 500 Mn. by 2010, 650 Mn. By
2012 and 800 Mn. By 2015 Add. Investment
required 25 Bn. US $ by 2010 and 30 Bn. US $ by 2015
PC Sales: 25 Mn.; installed base 65 Mn. by 2010
ITES & Software exports: USD 60 Bn. by 2010
40 Mn. new internet connection; 20 Mn. broadband
by 2010
Over US $10 Bn. investment in e-governance and
National ID Card by 2010
2015: Total expected Market US $ 320 bn;
Domestic production US $ 150 bn
India’s telecom Market is booming
Despite the economic slowdown,
India continues to add 10-15 Million wireless users every month
500
Today
350 Million
450
400
Wireless
Subscribers
Millions
350
300
250
200
150
Fixed Line
Subscribers
100
50
0
2003
2004
2005
Source : CII Broadband report
2006
2007
2008
2009
2010
• Despite the global economic
slowdown, India’s Telecom Market
continues to sizzle
• India is the fastest growing cellular
market in the world
• Has become the 2nd largest
market after china earlier this
year
• India is adding 12-15 Million new
wireless subscribers every month
• Broadband subscribers beginning
to pick up
• Expected to reach About 50%
tele- density by 2010 with 500
Million Subscriber
India Telecom Demand
Expected to reach US $ 18 Billion this year
90,000
70,000
60,000
50,000
Source: TEMA
40,000
IMPORTS
30,000
PRODUCTION
80,000
20,000
10,000
0
2005-6
$10 Billion
2006-7
2007-8
$12 Billion $16 Billion
2008-9
$18 Billion
• Over $100 Billion worth
of telecom equipment is
needed during next five
years.
• Thanks to the current
policy regime, Telecom
equipment production is
increasing.
• If the manufacturing
industry continues to
grow, over 50% of the
demand will be met by
local production, which
is global benchmark
India Telecom Manufacturing Industry
Expected to cross $ 10 Billion this year
66000
51,800
Source: TEMA
41,270
23,700
17,800
2005-6
2006-7
2007-8
2008-9
2009-10
• For the First time , the
equipment production is
expected to cross Rs.
50,000 Crores this year.
• The expected
production boom will
generate employment
for at least 10 Million (4
mn Direct; 6 mn
Indirect) by year 2010
• Local Production will
Service a major market
of 500 Million Subs.
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India Telecom Exports
Expected to cross $ 2 Billion this year
11,000
8,132
Source: TEMA
2,523
559
2005-6
2006-7
2007-8
2008-9
• Exports have taken off in
a big way since 2007-8.
• This year the Telecom
exports are expected to
cross Rs. 10,000 Crores
• The Telecom Export
Council set up recently by
the Government is in the
final stage of setting up
• Government has set up a
governing council to guide
promotion of Telecom
exports
THANKS….
FOR LISTENING