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Telecommunication
IBEF

Brief Introduction

Driven by wireless revolution, the Indian telecommunications industry is one of the fastest growing in the world. Government policies and regulatory framework implemented by Telecom Regulatory Authority of India (TRAI) have provided a conducive environment for service providers. This has made the sector more competitive, while enhancing the accessibility of telecommunication services at affordable tariffs to the consumers. According to TRAI's report 'Telecom Sector in India: A Decadal Profile', the tele-density has increased from 4.3 in March 2002 to 78.1 in February 2012, wherein the rural areas registered an increase from 1.2 in March 2002 to 38.5 in February 2012. Also, the share of telecommunication services (excluding postal and miscellaneous services), as per cent of the total gross domestic product (GDP), has increased from 0.96 in 2000-01 to 3.78 in 2009 -10. According to the same report, international comparisons (among 222 countries) show that India has the second largest number of telephone subscribers in the world accounting for 12 per cent of the world's total telephone subscribers.
Key Statistics

In its recent statement issued, TRAI has revealed that the country's mobile subscriber base has reached 951.3 million wherein the operators added 8 million subscribers in March 2012. The overall tele-density in India reached 78.66. The urban tele-density was recorded to be 169.55, while rural tele-density stood at 39.22. Total broadband subscriber base increased from 13.54 million in February 2012 to 13.79 million in March 2012, registering a growth of 1.86 per cent.
Market Size

According to a report 'India Monthly Mobile Handsets Market Review for November, 2011' by CyberMedia, total mobile handset shipments in India reached about 166 million units during the first eleven months of 2011, wherein Finnish handset maker Nokia accounted for 30.7 per cent share of the market, followed by Samsung with 14.9 per cent and Micromax with 5 per cent. The overall shipments included 14.4 million feature phones and 1.07 million smartphones. Nokia remained the leader in both the feature and smartphone segments, accounting for 30.2 per cent and 38.4 per cent, respectively, of the market. Smartphone shipments during the period stood at approximately 10 million. Samsung and BlackBerry smartphone-maker Research In Motion (RIM) were the second and third largest players in the smartphone segment with a 27.5 per cent and 15.5 per cent market share, respectively.
Sm artphones

Indian handset makers are venturing into smartphone segment by following the features of multinational companies and breaking the Rs 5,000 (US$ 88.6) barrier for entry-level phones. While Micromax is devising a speech-recognition application that replicates Apple's Siri, Karbonn Mobiles has developed its own instant messenger and push-mail service that is similar to BlackBerry's messenger. Karbonn Mobiles, on the other hand, is offering its handset at Rs 4,490 (US$ 80). The handset makers are targeting college students in tier II and III cities who wish to upgrade from a
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feature phone, but can't afford to buy premium brands. Lava has taken a different path to stay in the game. It has partnered with Intel to launch the computer chipmaker's first smart phone Xolo - packed with an Atom processor used in netbooks - only in India. The company hopes to cash-in the 'Intel Inside' faith from consumers while it has launched its product at an entry price of Rs 22,000 (US$ 389.72).
Key Developm ents & Investm ents

Swedish company Flexenclosure has formed a 51:49 joint venture (JV) in India with Mumbaibased Artheon group to enhance its relations with Bharti Airtel and forge into new ones with firms which are looking for environment-friendly solutions. Flexenclosure is a global developer for unconventional energy solutions for telecom companies. India's largest mobile operator Bharti Airtel has partnered with Oslo-based Opera Software to provide its customers across India, Africa, Sri Lanka and Bangladesh, access to a customised version of the latter's internet browser on their mobiles. This will bring 253 million more customers to the Norwegian browser maker for mobiles and enhance its value. Canadian phone maker RIM and Kerala-based business incubator Startup Village have jointly decided to launch the first BlackBerry Innovation Zone in India. First of its kind in the Asia Pacific region, the zone would be located at Rubus Labs with Startup Village. The labs will facilitate developer activities like BlackBerry Hackathons and Bar Camps. The partners will conduct training sessions across 126 engineering colleges in Kerala under the BlackBerry BASE (BlackBerry Apps by Student Entrepreneurs) program.
Governm ent Initiatives

The Cabinet has given its nod to National telecom Policy 2012. The policy directs new initiatives, which includes free roaming, unrestricted Net telephony and a new unified licensing regime for operators. The policy also endorses a boost to broadband expansion and an increase in local manufacturing of telecom equipment. The National Science and Technology Entrepreneurship Development Board (NSTEDB), the Department of Science and Technology (DST), Government of India, Technopark and MobME Wireless have joined hands to set up the Startup Village - Indian Telecom Innovation Hub in Kerala. The country's first Public Private Partnership (PPP) telecom business incubator is a step to support new product initiatives and turn them into successful ventures. TRAI is also doing its bit to achieve the aim of carbon emission reduction under which operators are directed to achieve carbon reduction to the extent of 5 per cent by 2012-13, 12 per cent by 2016-17 and 17 per cent by 2018-19. With regards to these norms under 'Green Telephony', TRAI has further mandated for all the operators that at least 50 per cent of all rural towers and 20 per cent of all urban towers are to be powered by hybrid power by 2015. The Government has also given its nod.
Road Ahead

Research firm KPMG predicts that 26 out of every 100 phones sold globally will be smartphones. The analysts added that smartphones will consist of 40 per cent of the total handsets sold across the world and India's situation would be similar. Smartphones segment is going to rule the future handset market undoubtedly. According to market intelligence and research firm IDC, the segment is poised to witness a substantial growth at 63.4 per cent from 2011-15 and is forecasted to achieve a shipment of 77.5 million by 2015 in the Indian market. Moreover, IDC predicts that India will be one of the top five country markets for Smartphone shipments by 2016. The gigantic growth would be driven through the roll out of 3G networks and data plans, while domestic vendors are seeking to enhance their value chains and upgrade from feature products to smarter ones. Exchange Rate Used: INR 1 = US$ 0.0177 as on June 21, 2012
References: Media Reports, Press Releases, TRAI report
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