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ALLIANCE UNIVERSITY, SCHOOL OF BUSINESS

A STUDY ON THE TELECOM INDUSTRY IN INDIA

Under the guidance of

Prof. SamikShome

Prepared by: Marketing A Group no : 12

1.AninditaSircar (10SBCM0251) 2. Amrita Jha (10SBCM0250) 3. Abhinav Sharma (10SBCM0128) 4. Jaikrishna Kumar (10SBCM0076) 5. VivekChaturvedi (10SBCM0306)

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Master of Business Administration (MBA): July 2010-2012

Term ± III: Industry Analysis Report

DECLARATION
This is to declare that the report entitled ³A study on the telecomindustry in India´ has been made for the partial fulfilment of the course Industry Analysis in Term ± III (Batch: July 2010-2012). We the students of Group 12 of Marketing A would like to state that all work carried out in the project is through our own diligent work. The data and information have been collected through various articles which are recognised in the Bibliography.

Group Members

Roll number

Signature

ABHINAV SHARMA ANINDITA SIRCAR AMRITA JHA JAIKRISHNA KUMAR VIVEK CHATURVEDI

10SBCM0128 10SBCM0251 10SBCM0250 10SBCM0076 10SBCM0306

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ACKNOWLEDGEMENT
At the successful Completion of our project, we the students of Marketing µA¶ would like to express our heartfelt gratitude to all the people who have extended their undivided support and been an inspiration and immensely helpful to us to complete our project. At the very first moment, we would like to thank our institute ³Alliance University, School of Business´ for giving us the opportunity to undergo this research project. We would also like to acknowledge the constant help and encouragement of our enthusiastic and humble project guide Prof. SAMIK SHOME, who has given his valuable suggestion, expert guidance and support. We would also like to thank all those who have directly or indirectly helped us in the preparation of this report.

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CERTIFICATE
I, hereby certify that this report is an original work of the students of Group 12, Marketing A, MBA batch 2010-12, Alliance University ± School of Business, Bangalore.

The students successfully completed their Industry Analysis Report on INDIAN TELECOM INDUSTRY under my supervision and guidance as partial fulfilment of their requirements as per the Master of Business Administration course, Alliance University.

____________________

Prof. Samik Shome

Project Guide (faculty) Alliance University- School of business
Date:__________ Place: Bangalore

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TABLE OF CONTENTS
SL. NO. PARTICULARS Declaration Acknowledgement Executive Summary Introduction to Telecommunication Sector Overview of the Industry Objective of the study Literature Review Introduction TECHNOLOGY& FUTURE PROSPECTS 4G AND ITS VISION FROM TECHNICAL PERSPECTIVE MOBILE BROADBAND THE COMPETITION KNOWLEDGEMENT MANAGEMENT CONCLUSION Industry Analysis Market Share and Nature of Competition Market Segmentation PEST Analysis Business Diversification Consolidation ± M&A Technology Intensity 1 2 6 8 9 12 13 14 14 15 15 16 16 17 18 19 21 24 27 30 33 PAGE NO.

Chapter 1 1.1 1.2 Chapter 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 Chapter 3 3.1 3.1 3.2 3.3 3.4 3.5

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3.6 3.7 3.8 3.9 Chapter 4

Marketing Initiatives Future Outlook Comparison with US and Other Countries conclusion Conclusion References

37 42 45 49 50 52

FIGURE NO. TITLE 3.1 Market share of Indian Telecom Industry as on 31.12.2010 3.2 3.3 Subscriber base of major players in telecom industry as on Jan 2011 (in millions) Market segmentation on the basis age, gender, income

PGNO. 19 20 21

EXECUTIVE SUMMARY

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The Indian telecommunications industry is said to be one of the fastest growing in the world. The industry has witnessedconsistent growth during the last year with the rollout ofnewercircles by operators, successful auction of third-generation (3G) and broadband wireless access (BWA) spectrum, network rollout in semi-rural areas and increased focus on the value added services (VAS) market. According to the Telecom Regulatory Authority of India (TRAI), the number of telephone subscriber base in the country reached 742.12 million as on October 31, 2010, an increase of 2.61 per cent from 723.28 million in September 2010. With this the overall tele-density (telephones per 100 people) has touched 62.51. The wireless subscriber base has increased to 706.69 million at the end of October 2010 from 687.71 million in September 2010, registering a growth of 2.76 per cent. Also, Indian Global System of Mobile Communication (GSM) telecom operators added 17.45 million new subscribers in November 2010, taking the all-India GSM cellular subscriber base to 526.18 million, according to the Cellular Operators Association of India (COAI). The GSM subscriber base stood at 508.72 million at the end of October 2010. This report contains details about the market leaders, market challenger in the Indian telecommunication sector and also what chances the other players stand with respect to the market share. Market share is followed by the PESTL (Political, Economic, Social, Technological and Legal) analysis of the industry. The analysis tells us the influence of the various factors like political social economical technological and legal on the industry.Also this being a growing sector has many opportunities with respect to employment, public welfare and other such activities. TRAI (Telecomm Regulatory Authority of India) is the regulatory body for the telecom industry. This report also explores the role of the DoT( Department of Telecom) in framing policies and regulations for the sector.This report also takes a look at the players of the sector in terms of their business diversification and future expansion in business if any. It also provides a clear picture about the various mergers and acquisitions common to the sector (Tata DoCoMo, Bharti Airtel Zain).This report then takes a look at the international exposure that this sector has (it has already attracted players like Vodafone through the acquisition with Hutch) along with the Indian companies that are expanding themselves internationally.It gives an in-depth knowledge into the Research and Development part in this sector.Huge volumes of R&D are involved in the sector and this is majorly responsible for a lot of developments in the same. The later part of the report is about the international exposure and the national challenges the sector faces. Proper marketing of the services is very

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important in this sector to reach out to the masses and also to tap the untouched segment. The report also comprises of the future outlook of the industry along with its comparison to the the other countries.

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CHAPTER 1 INTRODUCTION

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1.1 OVERVIEW The Indian telecommunications industry has witnessed robust growth during the last year on the roll out of third-generation (3G) and broadband wireless access (BWA) spectrum, network rollout in semi-rural areas and increased focus on the value added services (VAS) market. According to the data released by Telecom Regulatory Authority of India (TRAI), the number of telephone subscribers in the country reached 806.13 million at the end of January 2011 from 787.28 million in December 2010, thereby registering a growth rate of 2.39 per cent. Overall tele-density (telephones per 100 people) has touched 67.67. The wireless subscriber base has increased to 780 million at the end of January 2011 from 752.19 million in December 2010, registering a growth of 2.52 per cent1. 1.1.1KEY PLAYERS With new players coming in, the competition in the industry has increased. The market share of the telecom companies reflects the uneven nature of the industry, with as many as 14 players..There are 14 service providers in India which is categorised into incumbents and new entrantslike :

a)BhartiAirtel Limited BhartiAirtel is the largest telecom company in India. It has a market share of 20.70%2.The company launched its services in 1995 in New Delhi. It acquired all India presence in year 2000 through organic as well as unorganic route. Airtel was the one to bring the trend of managed services in India. They optimised their cost by outsourcing its IT operations to IBM and network management to Ericsson, Nokia and Siemens in 2004.Airtel is an integrated Telecom player with presence in Broadband, NLD, ILD, IPTV, Mobile TV and Internet and is operational in 19 countries at present. b) BSNL BSNL is a 100% Government owned company, made as a separate entity in the year 2000 and operational in 20 circles in addition to Delhi and Mumbai, with market share of 11.43%3.

1 2

www.trai.com www.trai.com 3 www.trai.com

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c) Vodafone Vodafone has a market share of 16.70 4 %. The company has grown mostly through inorganic mode. The company has seen multiple changes in its brand name like Max Touch, Orange, Hutch and Vodafone. It acquired companies like Fascel, Usha Martin, Sterling Cellular, AircelDigilink and BPL Mobile. d) Reliance Communications RCom launched its services in 2002 on the CDMA platform and launched GSM services in 2008. It is operational in all 22 circles as an integrated telecom player and a dual technology player. Its market share is16.89%. 5 e) Idea Cellular Idea started its operation in Gujarat and Maharashtra circles in 1997 and it was known as Birla AT&T then. It merged with Tata Cellular in 2000 and the name changed to Birla Tata AT&T. The company is operational in all 22 circles. Its market share is 10.76% f) Tata Teleservices Tata teleservices initiated its telecom operations in 1997 in Andhra Pradesh and started mobile operations in 2000. In 2009 it became dual technology operator by launching GSM operations also in association with NTT Docomo. It is credited with innovative schemes like life time validity and one second billing. Its market share is 11.44%. g) Aircel Aircel started its operation in Tamil Nadu circle in 1999 and it acquired RPG cellular¶s Chennai circle in 2003. The company is today operational in 18 circles. The market share of Idea is 6.72%. h) MTNL MTNL was set up in 1986 to provide telecom services in Mumbai and Delhi. Majority of the shares are owned by the Government and it is a publicly listed company. Its market share is 0.76%. i)Videocon The company was earlier known as Datacom. Videocon launched its services in 2010. It got licence in 22 circles. Its market share is 0.79%.While MTS,Uninor,S Tel,Loop,Etisalat are some of the other players operating in the Telecom sector.

4 5

www.trai.com www.trai.com

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1.1.2.VALUE-ADDED SERVICES (VAS) MARKET Mobile value added services (VAS) include text or SMS, menu-based services, downloading of music or ring tones, mobile TV, videos and sophisticated m-commerce applications. As per a report, µIndia Telecom 2010¶ released by KPMG in December 2010, currently, the VAS market is worth US$ 2.45 billion-US$ 2.67 billion, which is around 10 per cent of the total revenue of the wireless industry. The share of VAS in wireless revenue is likely to increase to 12-13 per cent by 2011, on the back of increased operator focus on VAS due to continuous fall in voice tariffs, increasing penetration of feature rich handsets, availability of vernacular content and increased user adoption of VAS applications.

1.1.3.POLICY INITIATIVES The government has taken many initiatives to facilitate the rapid growth of the Indian telecom industry. In the area of telecom equipment manufacturing and provision of ITenabled services, 100 per cent FDI is permitted According to the Consolidated Foreign Direct Investment (FDI) Policy document, the FDI limit in telecom services is 74 per cent subject to the following conditions:This is applicable in case of Basic, Cellular, Unified Access Services, National/ International Long Distance, V-Sat, Public Mobile Radio Trunked Services (PMRTS), Global Mobile Personal Communications Services (GMPCS) and other value added Services. FDI up to 49 per cent is on the automatic route andbeyond that on the government route. FDI in the licensee company/Indian promoters/investment companies including their holding companies shall require approval of the Foreign Investment Promotion Board (FIPB) if it has a bearing on the overall ceiling of 74 per cent. While approving the investment proposals, FIPB shall take note that investment is not coming from countries of concern and/or unfriendly entities.

1.1.4. FUTURE PROSPECT As per the 12th five year plan (2012-2017), the total number of telecom subscribers is projected to grow from the present 780 million to 1,200 million during the five year period. About 25 per cent (roughly 300 million) would be 3G/4G subscribers, which would require scaling up the infrastructure. The total investment in the pan-India

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broadband rollout is expected to be US$ 16.79 billion, while another US$ 9 billion will be invested in augmenting the transmission network.

1.2.OBJECTIVE OF STUDY Following are the objectives of the study: 1. 2. 3. 4. 5. 6. 7. 8. 9. To study the contribution of the telecom industry in the Indian economy. To study the market share of various players and the nature of competition followed. To identify the market segment with respect to demographics of the buyers. To conduct a PEST analysis of the industry. To identify the diversification in various companies. To have a consolidated picture about the mergers and acquisitions. To study the company¶s international exposure. To study the technological intensity of the industry in terms of R&D. To study the advertising, marketing expenditure involved.

10. To get an overview of the future outlook and its comparison with the U.S and the
other countries.

1.3.CONCLUSION The study of the telecom industry gives a brief about all the recent developments in the telecom space like 3G auctions, Value Added Services (VAS), National Broadband Policy and National Telecom Policy. It further provides information about the different policy adopted by TRAI and DoT over a period of time to keep the industry growing. The section ends with a list of primary objectives which is also our purpose of study.

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CHAPTER 2 LITERATURE REVIEW

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2.1. INTRODUCTION The telecom industry is dependent on constant research and development for its functioning. But basic research involves methods to capture the market and increase its subscriber base resulting in generating high revenues.

2.2. TECHNOLOGY& FUTURE PROSPECTS Another study was conducted on how far the mobile number portability will release the existing scenario competition in the country. The study highlights the history and evolution of MNP. It also identifies and explores the potential in India. The study makes the SWOT analysis MNP in India. Explains the changing nature of competition in the telecommunications sector in India as a result of the introduction of MNP in India from January 2011. The study further tries to investigate the possible changes in the strategies of the major telecom players in India to adopt to stay in business and to grow with this opportunity come with MNP. No analysis on the potential benefits and potholes for players of the industry. It also highlights how MNP will change the nature of competition in India. Also detailed that speaks to how it will be beneficial for customers. (Bhargava& Wei, 2011). As per a report on the Green, green trigger is all about reducing the carbon footprint of space telecommunications. India faced with rapid growth in telecommunications, will require a massive expansion of telecommunications infrastructure throughout India, with particular emphasis on the rural hinterland. So India will have many towers and necessary supporting infrastructure to be established. This will consume a significant share of our limited resources. The Paper highlights many startling facts about the carbon footprint in development and may, if the trend continues. It is essentially a discussion document wherein feedbacks are expected from all interested parties such as industry players, governmental agencies, civil society etc. It also highlights some of the alternatives for dealing with the problem.(TRAI, 2011)

2.3.4G OR FOURTH GENERATIONAND ITS VISION FROM TECHNICAL PERSPECTIVE 4G or Fourth Generation is future technology for mobile and wireless communications. It will be the successor for the 3Rd Generation (3G) network technology. Currently ,

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video and TV services are driving forward third generation (3G) deployment. And in the future, low cost, high speed data will drive forward the fourth generation (4G) as shortrange communication emerges. 4G visions from a technical perspective. After a brief review of it, It propose a 4G feature framework, in which features of 4G mobile communications are defined. The framework is based on the key concept of integration, and it has the following characteristics:

1) Targets in the framework include users, terminals, networks, and applications, which compass the entire technical domain and operating environment of 4G. 2) Core features of 4G are described as diversity and adaptability of the targets, leading to seamless integration. 3) The feature of diversity includes both external and internal diversity, in which adaptability is caused by external diversity and is solved by internal diversity. (Evans & Baugan, 2008)

2.4. MOBILE BROADBAND: A SURGE OF BUSINESS THAT IS DRIVEN BY APPLICATIONS Industry experts predict that mobile broadbandwill become a 1.8 billion-subscriber market by 2012. The number of mobile broadband subscribers will pass the number of fixed broadband subscribers worldwide by then. Players in this market use a variety of strategies.

1. Research in Motion (RIM), producer of the BlackBerry line of mobile email and smartphone devices, aimed its products at the B2B market, with e-mail as a key application. Now, the use of mobile broadband is expanding towards the consumer market. 2. With the iPhone, Applelaunched a device that is suited for social networking among many other things. Apple created an attractive ecosystem for application providers. If offers a strong brand, access to large numbers of customers, an open platform and a generous remuneration policy. Such a model attracts lots of application providers. And the providers, in turn, make the product more attractive. 3. Nokiaproved that relevant applications are successful when it triggered 1 million downloads of its free navigation software in the first week after launch.
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4. Companies like mobile communication service providers Nimbuzzand Fringposition their platforms as an ³all in one´ solution. Not only do they allow access to social networking platforms, but they also include voice and texting services.(Mobile Broadband, 2010)

2.5.THE COMPETITION Preportrayal of a stage of development in future requires understanding of the process of change, the dynamics that set law of motion. In attempting to do so, the author deciphers the recent past. Process of change is often volatile and responsive to intervention and global circumstances impacting it. In such an inherently dynamic situation it is convenient to assume that cross-country experiences incubate the most recent seeds of change. This is because countries at various stages of development encapsulate developmental experiences that occur with the passage of time. The author isolates the agents of change based on international experiences and situates India in this development continuum. The agents of change, as observed from international perspective, have been broadly categorized into economic structure, competition policy and technology. Economic reforms and liberalization have driven telecom sector through several transmission channels of which these three categories are of major significance. As it unfolds, the author has divided his into six sections. One section gives a brief account of the era of competition that was heralded in Indian telecom sector and the results achieved. Analysis of the results, particularly comparison with other major countries intrigued further discussions on economic structure, synergy between telecom and IT, competition policy and technology are dealt with.( Bhattacharya, 2002)

2.6. KNOWLEDGEMENT MANAGEMENT Purpose of the author is to give a clear insight of the industry to the managers of different organizations. Knowledge management will be the key to organizational success in this millennium quotes the author. This paper aims to analyze how the organizational culture and organizational learning impacts knowledge management, and ultimately the satisfaction of employees working in the firm. The design, methodology and approach used comprises of a survey instrument inturn comprising of organisational culture ethos, organisational learning diagnostics, KM orientation and employee satisfaction

development. Through a postal and personal survey, data were collected from the telecom

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sector in India. The sample included 80 knowledge workers, project managers, team members, consultants, researchersand designers randomly drawn from Indian telecom companies. The findings of the survey instrument was shown to be both reliable and valid. Statistical analytical tools such as F-test, t-test, ANOVA coefficient of correlation and multiple regressions and other descriptive statistics scores have been used. The results of the data analysis revealed sufficient evidence to establish a correlation between organisational culture, organisational learning, KM and employee satisfaction. The research limitations or implications show the accuracy of the analysis is dependent on the accuracy of the data reported by selected organizations. The practical implications show the results of this study would help telecom organisations to better understand the KM discipline, to facilitate its adoption and to prioritise its practices. Academics can use the results to build models that would further expand the KM domain. The originality or value of the study is probably the first to systematically determine the antecedents of KM implementation in the Telecom sector in India. It offers a beneficial source of information to telecom organisations, which are still lagging far behind when it comes to KM practices. (Sharma, 2007)

2.7. CONCLUSION The study explains different aspects of the telecom sector. It also includes insights from various research papers from the expertise in the respective fields. It speaks of mergers and acquisitions,the various players, the market leader, the market challenger, the technological advancements, the research and developments in the field.

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CHAPTER 3 INDUSTRY ANALYSIS

3.1. INTRODUCTION This chapter gives a deep insight about the top players in telecom sector in India and their subscriber base. It deciphers whether the top players are on the growth path and what
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reasons or initiatives have contributed to the growth. It studies the demographics of the buyers and analyses the factors on which market is segmented.

3.2. MARKET SHARE AND NATURE OF COMPETITION The Indian telecom industry is the second largest after China, in terms of number of subscribers in the world, is growing at the fastest rate (around 26%). Presently there are 806.12 million subscribers in Indiaand is expected to touch 1.159 billion by 2012 surpassing China to become the biggest global market. In terms of revenue generation it is expected to reach a size of Rs 350000cr by 2012. Indian telecom market is presently the most attractive telecom market in the world with a lot of attention being shown by global players.
1.45 1.01 0.26 0.16

Bharti airtel Reliance

Tata

6.72

Idea

ircel

10.76

BSNL
16.89

MTNL
n in r

11.44

Sistem

16.7

Fig 3.1 Market share of Indian Telecom Industry as on 31.12.2010 Source: www.trai.com The above pie chart shows the market share of fourteen telecom companies operating in India. We can easily observe that BhartiAirtel is the market leader with 20.70% of the total market share followed by Reliance and Vodafone. It is evident from the chart that 97% of the total operator market is shared only by eight companies which makes it an oligopolistic market, where few firms enjoy being at the top, entry barriers are high so it is very difficult for a new entrant to enter. Firms are interdependent.

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3.2.1HERFINDAHL INDEX: The Herfindahl index (also known as Herfindahl±Hirschman Index, or HHI) is a measure of the size of firms in relation to the industry and an indicator of the amount of

competition among them.

3.2.2 SUBSCRIBERS BASE OF MAJOR TELECOM PLAYERS IN INDIA Reliance and Tata offer CDMA technology while all the other players are in the GSM space. GSM has a 83% share of subscribers and now even Reliance and Tata have launched nation-wide GSM services. Apart from the current players, there are several new players like Aircel, Unitech-Telenor, Shyam-Siestema, Etisalat that have got the license and spectrum to launch mobile services in several telecom circles. ShyamSiestema is the only player to launch CDMA services while all the new operators are in the lucrative GSM space. India is predominantly prepaid market (93% of all subscribers are on prepaid) with low ARPU6 and minutes of usage (441 min per month in the quarter ending 2009). The GSM ARPU is Rs 144 per month.
5.15 51.8

156
83.5

Bharti Airtel

BSNL Idea

Aircell 83.6
127.36

MTNL

Fig 3.2 Subscriber base of major players in telecom industry as on Jan 2011 (in millions) Source: Telecomindiaonline.com

6

Average revenue per user

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BhartiAirtel has largest subscriber base of

156 million followed

by Reliance and

Vodafone with total subscriber base of 132.2 million and 127.36 million respectively. Vodafone has the largest addition of subscribers in Feb 2011 followed by BhartiAirtel. 7

3.3.MARKET SEGMENTATION OF INDIAN TELECOM INDUSTRY The market segmentation of Indian Telecom Industry is done on various parameters such as age group , income , geographical location , revenue potential etc. Market segmentation on the basis of above mentioned factors are explained below.

3.3.1. MARKET SEGMENTATION ON THE BASIS AGE, GENDER, INCOME The chart is shown below :

Source: India cellular The above segmentation is done on the basis of customer stage in life so to cater to each customer segment. Youth:Over the years, service providers have targeted youth as this segment has

emerged as biggest users of mobile phones. This segment values prepaid schemes with free messages.It is further seggregated into various segments on the basis of age etc. For eg. Youth in the age group of 19 to 23 years have many friends and easy access to money. Company thus focus on providing them with group talks and group sms to these segment.
7

www.mobileteleco.com

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Young Professionals: Customers who have entered the workforce and upgraded themselves from being dependent to independent comprise of this group.

Small and Medium Enterprise: This segment mainly consists of people who are switching over from landlines to mobile seeking a cost advantage.

Family:Family as a segment consists of more number of dependents. These dependants are serviced by prepaid schemes. Geographically dispersed families tied by the same cellular service providers may get cost advantages in terms of lower pulse rates.

Special: The µSpecial¶ category includes a small but growing segment which requires largely customized services sought by celebrities, politicians, CEOs . Tailor made schemes for each segment have witnessed a positive response.

3.3.2 MARKET SEGMENTATION ON THE BASIS OF REVENUE POTENTIAL The country was divided into 23 circles at the time of introduction of mobile phones in 1994. Separate licences were given to circles for operating in those regions. The circles were even broadly classified as circle A, B,C and the metro circle depending upon the revenue potential with metro and circle A expected to be the most promising potential markets The following table shows the current telecom circles and the corresponding subscribers base in each of them.

All Figures in Million

Population

Subscriber Base (As on 31st Aug¶10) Penetration

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Metros Bombay Delhi Chennai Kolkata A Circles Gujarat Andhra Pradesh Karnataka Tamil Nadu Maharashtra & Goa B Circles Punjab Rajasthan MP &Chattisgarh Kerala + Lakshadweep Haryana Uttar Pradesh ± West (UPW) Uttar Pradesh ± East (UPE) WB& AN, Sikkim C Circles Bihar & Jharkhand Orissa Assam North East Jammu & Kashmir Himachal Pradesh Total for India Source: Trai database 120.68 40.40 29.26 12.80 11.13 6.67 1,129.09 42.91 17.91 9.93 5.88 4.59 5.80 664.63 35.6% 44.3% 33.9% 45.9% 41.2% 87.0% 58.9% 27.73 62.03 89.11 35.02 21.81 69.17 120.98 74.56 23.10 36.70 35.49 26.65 16.50 35.85 51.40 30.06 83.3% 59.2% 39.8% 76.1% 75.7% 51.8% 42.5% 40.3% 56.04 83.65 58.01 62.58 89.87 37.33 51.36 42.07 48.60 48.99 66.6% 61.4% 72.5% 77.7% 54.5% 17.95 18.20 6.99 14.43 30.30 32.62 12.04 18.56 168.8% 179.2% 172.4% 128.7%

In circle A reliance is the one which gained maximum in the financial year ending feb 2010 from having a subscriber base of 341000 to 830000, other companies which were

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able to grow were BSNL, Idea, Reliance and TATA. The only company whose number of subscribers has come down is Airtel. In B circle the company to gain maximum is TATA whose total number of subscriber base has increased from 468000 to 1311000. Point to be noted here is Airtel which was loosing its subscriber base in circle A and metro circle is gaining here. In circle C as well we see airtel maintaining its growth, but the company important here is aircel which has shown a sizable increase in the subscribers base.

3.2. PESTL ANALYSIS
The pest analysis should be done for environmental scanning to analyze the scope of the telecom industry the impact of new entrants into this industry and various factors affecting it.The factor like political, economical,technological,social,and legal. Political factor includes government policies related to the industry, laws and regulations, tax policies, trade restrictions and tariffs etc. The economic factor mainly concern with the cultural aspects and include, population growth rate health consciousness, age distribution, change in tastes and buying patterns etc. The technological factors deal on the application of new inventions and ideas such as R&D activity, technology incentives, automation and the rate of technological change. Legal deals with the policies and guidelines set for the conduct of the operations.The telecom industry is analyzed with the PESTL factors influences the useful way of summarizing the industry as a whole.

3.2.1. POLITICAL ANALYSIS Indian telecom Industryis the world largest telecom industry after china and also world¶s fastest growing telecom, expectedto grow by 2012. There are some concerned authority related to telecom industry which is responsible for formulating the developmental policies, granting licenses for various telecom services. The department of telecommunications (DOT) is responsible for granting licences and service provision.In 1997 the TRAI (Telecom Regulatory Authority of India) was established under the Telecom Regulatory Authority Act 1997 which was amended by TRAI amendment act 2000. One more association called as COAI(cellular operators association of India) was registered in 1995 to the advancement of modern communication through the establishment of a high class cellular infrastructure and to delivering the benefits of
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affordable mobile communication services to the people of India. COAI core membership includes private cellular operators like ±Aircel ltd.,BhartiAirtelltd.,Idea cellular ,Unites wireless pvt ltd. , Videocon telecommunication ltd. , Vodafone operating across the whole country.

3.2.2. ECONOMIC ANALYSIS The telecom industry contributed nearly 2.1% in the GDP of India in 2011.earlier there was not much competition but now it has become highly competitive market. there are many major player in the industry like Airtel,Vodafone,Idea,Aircel,BSNL etc. The highly competitive environment has led to low pricing of goods and services which caters to the weaker sections of the society. The Indian Telecommunications network with 806 million connections (as on January 2011) is the second largest in the world. The sector is growing at a speed of 50-56% during the recent years.It is expected that ,India will continue its robust growth telecom story with the sector¶s revenue to be more than $30 billion by 2013,according to a global information technology research and advisory firm. Mobile market penetration is increase from 38.7% in 2009 to 63.5% in 2013,Gartner said and this is due to three factors increased focus on the rural market ,entry of consumer durable and electronic companies into the mobile handset segment ,and cheaper handset.According to Gartner , the number of people who have prepaid connection accounted fro 93% in 2008,will continue to increase to exceed 96% by 2013. Surpassing 740 million the postpaid subscriber base will exceed 29 million subscriber by 2013,growing 2.5 % from 2009.

3.2.3. SOCIAL ANALYSIS The social cultural factor includes the cultural aspects and population, growth rate, age distribution and emphasis on safety factor. The trend in social factor affects the demand for a company¶s product or services and helps in analyzing how that company operates. The telecom services have been recognized as the world over an important tool for social economic development. Telecom industry plays a very vital role in social stage. It is one of the prime support services needed for modernization and rapid growth of various sector of the economy.Telecom offers unlimited opportunities and possibilities in the present as well as future. The telecom sector is innovative and based on technology. Telecommunication sector offers a variety of career option because the coming of more
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and more projects, the telecom industry is going for high number of recruitment. The new projects, setting up of new service of coverage areas, network installation, maintenance etc. and more employment opportunities in the telecom sector. The driving forces for the increase in smart phones in the urban market was need for real time access for information and on demand access to application such as email, contacts, calendar and other information. With rolling out of 3G and wi-max existing player will need another 50,000 people ,most of the new players are looking for experienced hands, so getting people in such large numbers will be a great challenge. In present there are 1,50,000 employs,while providing jobs to another 1.5 million with tower construction , prepaid card seller and rental outlets .now a days mostly telecom players looking for rural market so they spend in the rural market, the demand for manpower is expected to go up in the coming time. One more important factor isRegional shift in populationso There has been a drastic shift with the increasing competition faced by various companies and so they plan in such a way that every region has a different segmentation of the customer so that their requirements can be fulfilled timely.

3.2.4. TECHNOLOGICAL ANALYSIS Technology plays a very important role in telecom industry because this is the field of innovation. There are many players who came up with new technologies time by time. This sector faced fierce challenges in the 1990s due to the development in the technological field. In 1984 first time telegraph introduced and has diversified into

various segments such as fixed line telephone, mobile telephone, GSM, CDMA and so on. and now it is the time for 3G technology. India has proved its dominance as a technology solution provider. It is expected that the telecom equipment and R&D shall be doubled by 2013 from present level of 15%. Telecom service provider now also focus upon rural area because there are lots of opportunities.3G and broadband wireless access (BWA) policies have since been issued also to improve the R&D infrastructure in the telecom sector and bridge the digital divide, cellular operators , top academic and the government of India together set up the Telecommunication centers of excellence (COEs).The industry and the government should carefully spend on the research and development so that the changing demands of the customers can be easily met. Since there are large number of competitors in this sector the new product, offers and services should always be introduced to sustain itself into this competitive marketplace.
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The latest innovation in telecom sector is MNP (mobile number portability) which was introduced January 20th, 2011 in India.

3.2.5. LEGAL ANALYSIS DOT (Department of Telecommunication) and TRAI (telecom regulatory authority of India) are regulator which regulates telecom industry in India.Till 2000, the DOT has the authority in granting licenses and service provision. The various power and function of TRAI are the authority sees that conditions and terms that it has formulated are being followed. TRAI is responsible for rendering legal advice to authority on all regulatory issues. According to Unified access licensing regime (UALR) plays are offer both mobile and fixed line service under a single license after paying an additional entry fee. This does not take international or national long distance service or internet access service. In 1994 the new economic policy adopted by the government to improving India¶s competitiveness in the global market. There are following steps in the policy. 1. Access to telecommunications is of great importance for achievement of the country's social and economic goals. 2. Encourage development of telecommunication facilities in hilly, remote, and tribal areas of the country. 3. Establish a modern and efficient telecommunications infrastructure taking into account the convergence of information technology, media, telecom and consumer electronics and thereby leading India into becoming an IT superpower. 4. Achieve efficiency and transparency in spectrum management system. 5. Protect defense and security and the interests of the country. 6. To establish Indian telecom player in global market

3.3. BUSINESS DIVERSIFICATION
Business diversification is nothing but a expansion of business into different fields or distribute the investment in order to average risk of loss. Diversification can happen either at the business unit level or at the corporate level. At the business level it is expand into a new segment of an industry which the business is already in. and at the corporate level , it is generally and it is also very interesting entering a promising business outside of the scope of the existing business unit. There are two type of diversification.
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1. Conglomerate 2. Standalone

Conglomerateis the type of diversification whereby a firm enters into different market that has little or no synergy with its core business or technology. Standalone is the type of diversification in which the corporation usually operates its business in one industry or sector, not much diversified. Some of leading companies in telecom industry following diversification strategy:\

3.3.1. AIRTEL- Bharti Group BhartiAirtel is the leader of telecom industry.BhartiAirtelis part of the conglomerate type of diversification.The company is structured into no of strategic business units such as:1. BhartiAirtel Ltd 2. Bharti Reality 3. Bharti Retail 4. Bharti Teletech 5. Bharti AXA Life Insurance Company 6. BhartiWalmart 3.3.2. VODAFONE- ESSAR Group Essar Group is one of the multinational conglomerate corporation in to various sectors headquartered in Mumbai. The Essar began as a Construction Company and diversified into manufacturing, communications and retail. The Vodafone Essar is a joint venture of the Essar communications Holdings Ltd and a UK based Vodafone group.The different diversified sectors of Essar group are 1. Vodafone Essar 2. Essar Steels 3. Oil and Natural Gas 4. Shipping ports and Logistics 5. Power

3.3.3. BSNL
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Bharat Sanchar Nigam Limited is standalone state owned company which is headquartered in New Delhi. BSNL is India¶s largest cellular service providers with over 8.3million subscribers as of January 2011 and the largest landline telephone provider in India.

3.3.4.RELIANCE Reliance is also a conglomerate company which is headed by Anil Ambani and it is among India¶s top 3 private sector businesses with a market capitalization of US$ 81billion.the company follows the Conglomerate Business diversification strategy.Reliance main subsidiaries are:1. Reliance Communications 2. Reliance Capital 3. Relianc Power 4. Reliance Infrastructure 5. Reliance Big Entertainment 6. Reliance Health 3.3.5. TATA DOCOMO ± TATA Group Group an Indian multinational conglomerate company has its headquarter in Mumbai.The Tata group comprises over 90 operating companies in seven business sectors. The Tata Group consists of 114 companies and subsidiaries in eight business sectors and some 27 are publicly listed. Their subsidiaries are:1. Tata Telecommunications 2. Tata Steel 3. Tata Motors 4. Tata Consultancy Services 5. Tata Tea 6. Tata Chemicals 7. Titan Industries 8. Taj Hotels

3.3.6. IDEA ± ADITYA BIRLA GROUP

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The Aditya Birla is a multinational conglomerate corporation having its subsidiaries that operate over different sectors which includes:1. Hindalco 2.Idea cellular 3.Grasim 4. Aditya Birla Nuvo 5. Ultratech cement

3.4.MERGERS & AQUISITIONS
Telecommunications industry gets a lot of competitive benefits after going through mergers and acquisitions. The mergers and acquisitions in Telecom Sector are regarded as horizontal mergers simply because of the reason that the entities going for merger or acquisition are operating in the same industry, that is telecommunications industry. In the majority of the developed and developing countries around the world, mergers and acquisitions in the telecommunications sector have become a necessity. This kind of mergers creates a lot of jobs. Both transnational and domestic telecommunication services providers are keen to try merger and acquisition options because this will helps the company in cutting down their expence, achieve greater market share and accomplish market control.

3.4.1. BHARTIAIRTEL, MTN IN $23 BILLION MERGER DEAL TALKS In spite of the massive downturn in 2009, the future of M&A deals in India looks promising. Indian telecom major BhartiAirtel is all set to merge with its South African counterpart MTN, with a deal worth USD 23 billion. According to the agreement BhartiAirtel would obtain 49% of stake in MTN and the South African telecom major would acquire 36% of stake in BhartiAirtel.

3.4.2.

IDEA ±SPICE MERGER

The deal is finally over with, Idea has bought the Modi¶s 40.80 stake in Spice Communications at Rs 77.30 a share. The stake, valued at Rs 2,175 crore will see a non-compete fee of Rs 544 crore paid to the Modi¶s. Additionally, Telekom Malaysia will not hold more than 20% stake in the new entity according to Idea Chairman, K.M. Birla. Idea plans to to spend Rs 10,000 crore ($2.3 billion) over two years and the
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company does not plan any further acquisitions (Shah, 2008).Cerius Shah Jun 25, 2008

3.4.3. IDEA CELLULAR

MERGER

WITH

TATA

CELLULAR

AND

RPG

Idea Cellular was incorporated in 1995 as Birla Communication Ltd with licenses for providing GSM-based services in the Gujarat. In 1996, the name was changed to Birla AT&T Communications Ltd after it became a joint venture company of Grasim Industries and AT&T Corporation. In 2000, the company merged with Tata Cellular, thereby acquiring the original license for the Andhra Pradesh circle. In 2001, it acquired RPG Cellular Ltd and consequently the license for the Madhya Pradesh (including Chattisgarh) circle and changed the name to Birla-Tata- AT&T Ltd. 3.4.4. IDEA CELLULAR TO ACQUIRE ESCOTEL Hong Kong-based conglomerate First Pacific Co. said on Friday it plans to sell its 49 per cent stake in Indian mobile phone provider Escotel Mobile Communications Ltd. to Idea Cellular Ltd. for Rs 700 million ($15 million) in cash. Escorts Ltd., an Indian conglomerate, will also sell its controlling 51 percent stake in New Delhi-based Escotel to Idea Cellular, First Pacific said in a legal notice. It didn¶t disclose the price for that stake.Escotel is the seventh-biggest of 12 cellular communications providers with about 826,000 customers. It lost $13.4 million in 2002 and has a negative net asset value of $324.9 million. Idea Cellular¶s main corporate office is in Pune. First Pacific, a property-to-telecommunications conglomerate, said it remains committed to the telecommunications business in Asia but felt that Escotel was too small in the ³increasingly competitive´ Indian market. The sale of the 49 percent stake is subject to approval by its shareholders. 3.4.5. TATA TELESERVICES ACQUISITION OF HUGHES TELE.COM Tata Teleservices Limited (TTSL) today announced the completion of the acquisition of Hughes Tele.com (Idia) Limited (HTIL).TTSL has acquired a 50.83 per cent stake in HTIL from the erstwhile promoters, and a 20 per cent stake under an 'open offer' thereafter. On June 27, 2002, Tata Teleservices Limited (TTSL) announced that it had executed agreements with Hughes Network Systems (HNS), the Ispat Group and Alltel Corporation, the principal promoters of HTIL, to acquire 50.83 per cent of the paid-up equity capital of HTIL from the HTIL promoters. As consideration for the acquisition of 71.43 crore equity shares of HTIL, TTSL has today issued 71.43 crore 'redeemable non-cumulative convertible preference shares' (RPSs) of TTSL in favour of the HTIL promoters.

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3.4.6. DOCOMO ACQUISITION OF STAKE IN TATA TELESERVICES NTT DOCOMO, INC. acquired 26 percent of the common shares of Tata Teleservices Limited (TTSL), in accordance with the capital-alliance agreement announced by the parties in November 2008, for approximately 127.4 billion Indian rupees (JPY 250.0 billion). The acquisition included 20% newly issued shares and 6% shares purchased from shareholders. DOCOMO also is preparing to acquire roughly 12 percent of the common shares of Tata Teleservices (Maharashtra) Limited (TTML) for about 5.7 billion Indian rupees (JPY 11.0 billion) through an open offer*, as the tender offer period ended on March 12. DOCOMO will nominate three executives to serve on TTSL's board of directors and will work to increase the enterprise value of both TTSL and TTML while creating synergies with the companies through joint activities, including their Business & Technology Cooperation Committee. 3.4.7. BHARTIAIRTEL ACQUISITION OF ZAIN AFRICA BhartiAirtel, completed the acquisition of the African operations of Mobile Telecommunications Company (known as Zain), thus fulfilling the company's ambitions to expand into markets outside India.The agreement signed with Zain earlier this year covers 15 countries in Africa but not Zain's operation in Sudan, nor its investments in Morocco. BhartiAirtel had acquired Zain Africa for an enterprise value of US$10.7 billion. The acquisition gave BhartiAirtel a total customer base of 180 million, including 131 million subscribers it had in India at the end of April. A challenge for BhartiAirtel will be to integrate the operations of Zain Africa in all 15 countries, which currently operate largely as stand-alone units,Zain had received $7.9 billion in cash from BhartiAirtel. Over the next six months, Zain expects to receive an additional $400 million upon certain milestones being achieved, it said. The balance of $700 million is due one year from completion of the acquisition.(Ribeiro J,2010) 3.4.8. RELIANCE FLAG TELECOM ACQUISITION Reliance Infocom was the first company of reliance group to make an international acquisition of Flag Telecom for US$ 211 Billion (Roughly INR 950 Crore).Flag telecom started in 1990. In 2001 Flag filled for a bankruptcy. In 2002 it emerged out of bankruptcy. In Jan 2004 Reliance Infocom acquired Flag Telecom for a valuation of US$ 211 Million for a control of 100% equity of the company. Flag at its peak in stock market had a valuation of US$ 7 million. Post merger Flag was renamed as Reliance Globalcom and manages the Global Telecom operations of India¶s largest Integrated Telecom Service Provider.

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3.4.9. VODAFONE COMPLETES HUTCHISON ESSAR DEAL Vodafone acquired India¶s Hutchison Essar in 2007. The deal came upto $ 10.8 billion.³India is a tremendously exciting, fast-moving market and I am confident that the Hutch Essar business will make a major contribution to the Vodafone Group over the coming years,´ CEO ,Vodafone , ArunSarin said. The deal, one of the largest in Asia this year, took over two months to acquire regulatory approval as India¶s telecom and law ministries looked into charges that the ownership structure of Hutchison Essar violated rules that cap the foreign ownership share of telecom companies at 74%.

3.5. TECHNOLOGY INITIATIVES IN TELECOM SECTOR
Telecom is an area where technology plays an important role in the development of the total industry, main technological development in the Indian telecommunications sector began after liberalization. The process of liberalization of the country started in right earnest with the announcement of the new economic policy, in July 1991. telecommunications equipment Manufacture was delicensed in 1991 and added value services were declared open to the private sector in 1992.After adding a radio paging, cellular and other mobile services value gradually opened to the private sector. This has resulted in a large number of production units set up in the country. As a result most of the equipment used in the telecommunications sector is manufactured within the country. An important development was the Government's intention clear enunciation of the liberalization of the telecommunications sector in the resolution of the National Telecom policy 13th May 1994. 3.5.1.Technologies& Services: 1) GPRS: This is for General Packet Radio Service. It is a packet-switching technology that allows data transfers over cellular networks. This technology has enabled the use of the Internet, mobile telephony, MMS and other data communications. The speed limit is 115 kbps . GPRS is also called 2.5 G. 2) GSM:This means for global system for mobile communications. Is a digital cellular system that is widely used in Europe and other parts of the world. It uses a variant of time-Division Multiple Access. It was first launched in 1991 in Finland. Today, more than 690 GSM mobile networks offering services to 213 GSM countries and represents 82.4% of all global mobile connections. Since many GSM network operators have
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agreements with foreign businessmen often roaming users still can use their mobile phones when travelling in other countries. 3) CDMA:This means Code Division Multiple Access. Refers to the various protocols used in 2 G and 3 G wireless communications. It is a form of multiplexing, which allows numerous signals to occupy a single transmission channel, optimizing the use of available bandwidth. It used in the ultra high frequency cellular systems in the 800 MHz and 1.. 9 GHz CDMA is a military technology first used during the Second World War by English Allies blocked attempts to neutralize German broadcasts. The allies decided to transmit several frequencies, rather than one, makes it difficult for the Germans to pick up the complete signal . 4) 3G and Broadband Wireless Access: 3 G means third generation. The technology 3 G is used to improve the standards of mobile telephony. It helps to carry both voice data (a phone call) and non-voice data (such as downloading information, Exchange email and instant messaging). The labelling of 3 G video telephony.BWA technologies provides broadband wireless data from within the business and consumer markets. The most common example of BWA are wireless LAN but efforts continue intensively to deliver ubiquitous broadband access network in developing an adequate radio technologies such as MAN, 3 G and wireless LAN that can even be combined into a single device to ensure smooth operation. 5) WiMAX:This means for Worldwide Interoperability for Microwave Access. Is an IP-based broadband access and offers performance similar to 802.11/Wi-Fi with the coverage and quality of services of cellular networks. It is a system of wireless digital communications, also known as IEEE 802.16, intended for the wireless man. It can provide up to travel fixed BWA stations and 5-15kms for mobile stations. 6) IPTV:This means for the Internet Protocol television. In IPTV, same technology is used as the internet. In this TV channels are encoded in the format of IP and delivered to the Television using an intelligent electronic device. Is a system through internet delivered television services with the architecture and networking methods of internet protocol suite over a network packet mode infrastructure.

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7) EDGE:This means Enhanced Data Rates for GSM Evolution. It is a faster version of GSM andis a high speed 3G technology based on standard GSM EDGE networks and are designed for multimedia applications such as streaming television, audio and video for mobile phones at speeds up to 384 kilobits per second. The standard EDGE began in the USA in 2003. 8) Mobile Number Portability: MNP allows subscribers to retain their existing numbers while moving from one service provider to another irrespective of the mobile technology. This service has been introduced with the intent of creating a standard playing field for all operators by reducing barriers to entry. It was first introduced in Haryana in November 2010 and countrywide on 20 January 2011.TRAI has fixed charge at Rs. 19 for users who want to switch their numbers and they just have to do a SMS to the service provider they want to shift to and within window of 7 days there service provider will be shifted. 9) Green Communication: Telecom companies incorporate heavy costs on energy consumption. Besides being expensive, the resources used tax the environment heavily. With regard to this the ETIG Knowledge Forum in association with Global Group has attempted to articulate the road map to green telecom in India. Constantly evolving energy management products are leading the revolution and R&D has helped bring costs down. For instance, in the past, to deploy 2G, 3G, 4G technology, one would need separate base-stations. But today, a single base-station puts all the technology in one place such that one needs to simply change the radio configuration. Companies are on a continuous look-out for alternatives like solar panels and other types of sources of energy and their combinations to achieve cost-effectiveness. 10) IMS: IMS stands for IP Multimedia Services is an IP multimedia and telephony core network that is defined by 3GPP and 3GPP2 standards and organizations based on IETF Internet protocols. IMS is access independent as it supports IP to IP session over wireline IP, 802.11, 802.15, CDMA, packet data along with GSM/EDGE/UMTS and other packet data applications.IMS is a standardized reference architecture that consists of session control, connection control and an applications services framework along with subscriber and services data.
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W-CDMA downlink data throughput rates. It has 4 to 5 times that of currentgeneration 3 G networks (UMTS) and 15 times faster than GPRS. this technology enhances downlink speeds from the current end user speed of 384 kilobits per second (up to 2 Mbit/S in accordance with the standards) a maximum value in accordance with the standards of 14.4 Mbps. real-life end-user rates will be in the range of 2 to 3 Mbps.
12) Mobile TV:Mobile TV is the latest technology where the TV channels are directly

streamed on the mobile or hand-held devices. This technology will be going to get more and more prevalent over the next couple years .Till now, mobile TV is mostly streamed over 3G networks because of ability to hold larger bandwidth and high speed of data streaming 13) Mobile Virtual Network Operator (MVNO):It is a GSM phenomenon where an operator which does not own a licensed spectrum and generally without own networking infrastructure. Instead MVNOs resell wireless services under their brand name, using regular telecom operator's network with which they have a business arrangements. Usually they buy minutes of use from the licensed telecom operator and then resell minutes of usage to their customers of MVNO. Currently MVNOs are emerging in fast pace in European markets and beginning in USA also. Slowly MVNO phenomenon catching up in Asia and other parts of the world also. An example for MVNO is Virgin Mobile. Virgin Mobile plc is a mobile phone service provider operating in the UK, Australia and Canada, and the US. The company was the world's first Mobile Virtual Network Operator, launched in the UK in 1999. It does not maintain its own network, and instead has contracts to use the existing network(s) of other providers. In the UK, Virgin Mobile uses the T-Mobile network. In the US, the Sprint network is the carrier. In Australia, Virgin Mobile operates on the Optus network. In Canada, it uses the Bell Mobility network. These networks use different technology (GSM in the UK and Australia and CDMA in the US and Canada). 14) 4G: Fourth Generation is future technology for mobile and wireless communications. It will be the successor for the 3Rd Generation (3G) network technology. Currently 3G networks are under deployment. Approximately 4G deployments are expected to be seen around 2010 to 2015.The evolution from 3G to 4G will be driven by services that offer better quality (e.g. multimedia, video and sound) thanks to greater bandwidth, more sophistication in the association of a large quantity of information, and improved personalization. Convergence with other network (enterprise, fixed) services will come about through the high session data rate. It will require an always-on connection and a revenue model based on a fixed monthly
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fee. The i t on net ork capacit i expected to be si nificant. Machine -to-machine transmission will involve two basic equipment t pes: sensors (which measure parameters) and tags (which are generall read/write equipment).

3.6. MARKET
Long ago

INITIATIVE

eter Drucker, the father of business consulting, made a very profound

observation that has been lost in the sands of time:"Because the purpose of business is to create a customer, the business enterprise has two --and only two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business." o irrespective of the industry marketing has become has become an integral part because marketing is the only revenue generating process of a company rest all is cost to it. After liberali ation of telecom sector in 1995 there has been a boom in the cellular services in India and with presence of so much competition in the sector it has become very important for all the players to develop new and innovative marketing strategies. So we look into some of marketing strategies adopted by major market players in India.

3.6.1.Airtel Airtel being the leader in cellular services has spent a lot on advertising of their mobile service. Besides print advertising airtel has also tapped the out of home advertising option.Airtel has associated its brand with trust in order to emo tionally connect the product with their consumer and portrayed well by associating it with brand ambassadors like Shahrukh Khan, Sachin Tendulkar and A.R Rehman.

They replaced there old logo with just the letter 'a', because it felt the need for a symbol, so that the consumer can easily connect to their brand globally (across 19 countries). It also changed its positioning to 'Dil JoChahePaasLaye' which meant - whatever one's heart
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desires, Airtel will bring it closer. In order to capture attention of the mass population airtel has adopted different strategies. They have used electronic media to cover urban market whereas for rural market the walls of dhabas and mobile vans went through makeover and are rebranded with new airtel logo. T8 hey also started a new campaign µ¶The Name Game¶¶ which invites people to name their logo.

3.6.2. VODAFONE Vodafone was formed in 1982 and was launched on 1st January 1985, Vodafone name is derived from the voice and data services over cellular telecom networks. So VO represents voice and DA represents data. Vodafone speech mark logo was launched in 1997, where it represents start of communication. Vodafone entered India in December 2005 and rebranded Hutch as Vodafone. 1) Hutch¶s Pug Strategy Initially Hutchison Essar used pug in their advertising campaign with tag line µ¶wherever you go our network follows¶¶ depicting that there is no point on earth where you won¶t find network of Hutch.

2) Hutch to Vodafone In order to tell consumers about transition of brand Hutch to Vodafone they used their five year old mascot pug and leveraged on the idea by showing pug in a garden, moving out of a pink colored kennel and making his way into a red one (the Vodafone color). A new version of the µYou and I¶ the trademark tune of Hutch, plays towards the end, as the concludes with tag line, µChange is good. Hutch is now Vodafone¶.

8

afaqs

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3) Zoo Zoo¶s The campaign introduced new characters called Zoozoos. In order to advertise variety VAS offered by the company for e.g. stock alert, phone back-up, beauty tips etc, each ad used a different story which was enacted by the Zoozoos. Vodafone Essar chose the Indian Premier League 2 (IPL-2) as a platform to launch their advertisement. In the second phase, after the release of these ads, Vodafone promoted these characters on social media sites by introducing Zoozoo fan clubs are there on social networking sites like Facebook, YouTube, Orkut, Twitter, and many more, where they have a huge followings. Now Vodafone has launched Zoozoo goodies like zoozoo toys, zoozoo mugs, zoozoo key chains, zoozoo t-shirts, etc

3.6.3. IDEA Idea cellular was awarded with Economic Times¶ Emerging Company in the year 2009. It was a joint venture between AV Birla Group, AT&T and TATA. The company was known as AT&T in Maharashtra and Goa, TATA Cellular in Andhra Pradesh, RPG cellular in Madhya Pradesh and Chhattisgarh till 2002. In May 2002 it consolidated its brand under a single umbrella called Idea Cellular. Initially they positioned themselves with the tagline of ³An Idea Can Change Your Life´. In their annual report their operating expenses include around 3.4% of expenditure on advertisement and business promotion which constitutes about Rs. 4066.94 million and shows how much IDEA is spending on their promotion activities After that Idea started promoting its services through several innovative ads through 360 degree advertising. Idea did not hire any celebrity to promote its services till late 2007, but when Idea expanded its geographical presence to cover vast telecom circles in India, it hired film star AbhishekBachchan to endorse its brand in October 2007. Idea's also changed its focus from tariff plans to using mobile telephony to solve social issues for e.g. they made ad campaign like µ¶ Education for All and Use Mobile Save Paper¶¶ Idea also tied up with Indian Premier League (IPL) cricket team, Mumbai Indians, and popular players like Sachin Tendulkar and Zaheer Khan were used to promote the brand.

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In order to guide subscribers towards their network Idea has launched µ¶switch to Idea¶¶ campaign.

3.6.4. AIRCEL Aircel is a joint venture between Maxis Communication Berhad of Malaysia and Apollo Hospital Enterprise of India. Aircel commenced its operation in 1999 and has presence in 23 circles. Aircel is India¶s seventh largest service provider with customer base of 51.83 million and has market share of 6.72%.According to Mr. Tarun Nigam ED-India North and Pakistan Aircel wants its communication to have shock value and be differentiated and disruptive. Aircel has focused mainly on innovation as there branding strategy like. 1) Voicemail on Facebook Aircel has launched voicemail application on facebook which allows users to upload voice messages in facebook rather than same old plain text status messages, with this strategy within 10 days almost 190 users subscribed for this application and this was the first time an Indian telecom bran launched a voicemail service on facebook. By this they were able to target youth of the nation as social networking site like gives a vast youth base. 2) Broadcasting Launch Aircel has integrated with Star Plus in order to reach maximum consumers, in daily sops of Star Plus lead character of five top sops will talk about the launch of aircel on prime time and this was aired at a high frequency during launch week. Aircel also brought innovation while advertising on news channels like logo bug, score bug and animated aston bands and in print medium also they deviated from regular format by changing masthead of Times of India to µ¶MOVE ON INDIA¶¶ with brand tagline.

3) Gateway of India In Mumbai aircel projected its logo on Gateway of India in order to project historic structure as gateway of new consumers of aircel

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4) Other Innovative strategies Aircel put up IPL scorecard billboards on busy highway to keep track of scores thus helping them to form brand image in consumers mind. One of the most innovative strategy used by Aircel was on Milan subway in Mumbai just before the floods, on billboard there was a inflated boat tied to it and billboard says µ¶in case of emergency cut the rope¶¶

And when flood came the rope was cut and Aircel employees were there to help people sail through the flooded streets of Mumbai.

3.7.FUTURE OUTLOOK

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Telecom industry in India has undergone a tremendous revolution in the recent years. The country is ranked second worldwide in terms of having the largest telecommunication network, after China. With the on-going investments into infrastructure deployment, the country is projected to see high penetration of Internet, broadband and mobile subscribers. According to our new analytical study on the sector ³Indian Telecom Analysis (2008 2012)´, mobile telephony continues to fuel growth of the Indian telecom sector, with mobile subscribers projected to grow at a CAGR of around 11per cent between 2013-14. The other segments of the industry such as Internet and broadband are also anticipated to witness strong growth in terms of both subscriber addition and network infrastructure deployment over the forecast period. Tele-density in India has improved significantly over the recent years and has reached around 51per cent in the fiscal year 2009-10, owing to improving network infrastructure. The launch of advanced telecom services like 3G and IPTV will also drive the growth in Indian telecom subscriber base over the forecast period. Furthermore, the mobile handset market is also expected to register a robust growth in near future. Also, various factors driving the overall telecom market in market have been thoroughly analysed in the report. The report provides a detailed study of the Indian telecom sector and gives an analysis of the competitive environment prevailin in the g industry. The report thoroughly studies fixed, mobile, Internet and broadband markets in terms of players and number of subscribers. It also presents the future outlook of the Indian telecom sector to help clients identify the growth opportunities in the market. There are various new technologies that have come out like the present 3G, the industry is expected to have 4G and 5G services as well. The 3G technology transmits packet switch data efficiently at better and increased bandwidth. It offers more advanced services to mobile users. The spectrum efficiency of 3G is better than the 2G technology. Spectral efficiency measures the rate of transfer of information over any communication channel. The industry speaks of coming up with 4G technology which offers more bandwidth and services than the 3G. It is expected to provide high quality audio/video streaming over end to end IP. The 5G technology will be a new revolution in the market. With the coming out of new cell phones like PDA, the 5G technology will be a new revolution in the market. With the coming out of new cell phones like PDA, working with office on your phone becomes easy and convenient. It will provide very high speed of connectivity. With mobile subscribers growing at the pace of over 15 million every month, the telecom sector is likely to witness huge investments to the tune of Rs five lakh crore . The two telecom

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private sector units BSNL and MTNL are expected to make investments to the of Rs one lakh crore during the five years to ramp up their telecom infrastructure. Private players, on the other hand, are expected to invest Rs four lakh crore during the same period(2012-2017) in expanding their infrastructure.This information from the Department of Telecom says the total investment in telecom infrastructure is pegged at Rs five lakh crore (USD 110 billion) during the 12th Plan period, starting from April 2012.The total number of telecom subscribers is projected to grow from the present 780 million to 1,200 million during the 12th Plan.According to the statistics around 25 per cent (roughly 300 million) would be 3G/4G subscribers, which would require scaling up and expanding the infrastructure to accommodate the rising number of users.About Rs 2.85 lakh crore is estimated to be invested in rolling out greenfield 2G, 3G/4G and WiMax networks, while Rs 1 lakh crore would be required to set up an extra 200,000-odd telecom towers across the country.The total investment in the pan-India broadband rollout is expected to be Rs 75,000 crore, while another Rs 40,000 crore will be invested in augmenting the transmission network. FromResearch shows that by March 2013 the wireless subscribers base is expected to touch 638 million which will lead to a tele density of 53per cent.Memorandum of understanding growth is expected to decrease slowly due to decrease in elasticity and low usage subscribers. ARPU (Average Revenue Per User) is projected to decrease rapidly in the next 2 years due to increase in competition and implementation of MNP (mobile number portability). The mobile operators profit is expected to decline over the next 2 years due to rising cost, falling ARPU and growing competition. Entry of new players in the business is bleak, because of the relatively high cost structure and low quality subscriber base. The 3G services are expected to attract 63 million subscribers in India till next 5 years.

3.7.1. CHALLENGES TO BE FACED The biggest challenge which the telecom industry is facing today is that they are in search of new and cost effective ways to establish themselves in the rural areas. They
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need to choose proper and effective technology for deployment and leverage on the use of available infrastructure to reduce cost and time to role out their services. Those service providers who get these aspects right will emerge as winners while the others will remain as spectators. Network connectivity and cost of bandwidth are also important to facilitate broadband usage. Most of the content available on website today is in English and this is seen as a big disadvantage. Communicating through local and regional language will increase interest of the local population in broadband utilization while giving them a clear picture about things they need to know about in the telecom sector. Emergence of new applications and technologies is another thrilling area. There is a lot of revolution round the corner in broadcasting and entertainment industries. The emergence of Internet protocol TV, mobile TV will change the scenario in the coming years. Wireless technology is the future growth driver for which spectrum is the most important input. The task of spectrum management in a multiuser and multi usage scenario is more daunting and crucial than ever before. Some of the major challenges can be listed below :

1. It would be increasingly difficult for a new entrant to lure customers, as there is nothing extra for a new player to offer. 2. Return on investment or capital employed for a late entrant would be significantly lower. 3. Expansion has to be done with a long sighted view for profitability. 4. It will be an era where there will be stiff competition among the strong regional and other national level players.

3.7.2.COMPARISION WITH U.S. AND OTHER COUNTRIESUNITED STATES The comparative study is done to see how different is the Indian telecom industry from the other countries and in what respect. The comparison is shown below :

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U.S. telecom industry is the most prosperous telecommunication industry in the world, which covers a wide range of areas and services like telephone, television, Internet, radio and so many more. The U.S. telecom industry primarily deals with the services of transmitting message through mediums like cables, satellites etc. There are a few principal divisions of the U.S. telecom industry.U.S. telecom industry specifically consists of three primary sections namely technical, regulatory and economic. These three sectors work together to make the U.S. telecom industry what it is today. U.S. telecom industry began with the telegraph industry and gradually the focus shifted towards wireless andonline services.Components and services of U.S. telecommunication industry include wireless technologies, digital technologies and mobile network services.Wireless technology is a form of technology for data communication without wires, which is alternatively called radio transmissions. This technology is more affordable and easy to use. American engineers started using digital technology from the mid-twentieth century and with the use of ISDN(Inter Services Digital Network), information will be transmitted in a completely digital fashion. From the economic perspective of U.S. telecom industry, it is the key force of the economy. The U.S. telecommunication industry extends its activities in almost every sector, from education to health care or banking and finance. U.S. telecom industry enables an overall of 75 per cent U.S. labor productivity gains.Prime objective of U.S. telecommunication industry is to provide employment.U.S. telecommunication industry is designed to achieve the target of creating more than 212,000 jobs. Besides creating new job opportunities, some other objectives of U.S. telecommunication industry include adding customer value by providing them innovative services like VoIP (Voice over Internet Protocol), creating an overall of $58 billion capital investment opportunities and generating $113 billion new revenues in its telecom industry.

CHINA Since the completion of recombination and the issue of 3G licenses, China's telecom industry has set up a three-way struggle, and the competition of the telecom industry has entered a new stage of development. The year of 2009 became the start of this stage. The
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development of the telecom industry so far is observed to be driven by investment. Since 2010, China¶s investment in 3G reduced gradually, and the telecom industry entered a "post-3G" era. Additionally, there was a slowdown of investment-led growth, and the development of the telecom industry was solely dependent on consumption. It is expected that the adjustment of market policies for China's telecom industry will enable telecom operators to face a more relaxed, free, and pro-competitive environment, which indicates that more incentive competition will come into being. In 2011-2012, China will accelerate the combination of telecom network, broadcast network and Internet, and promote interoperability, resource sharing, and the development of information and cultural industries, by using of related policies. This interoperability is not only an opportunity but also a challenge for the industry.

JAPAN Japan¶s telecommunications sector is one of the most active markets in the world. Entering 2011 the country was witnessing the continued growth of VoIP and strong competition among the mobile operators in the 3G segment of the market. Japan has also become the fourth country to introduce LTE (Long Term Evolution) services with NTT DoCoMo leading the charge. Especially noteworthy has been the continued strong uptake of FttH(Fiber to the Home) services (with a corresponding move away from digital subscriber line also called DSL) and the big strides taken in developing digital and mobile broadcasting. The telecommunications regulatory authorities in Japan have been very active in shaping the industry in this country.

SOUTH AFRICA It should come as no surprise that the country that invented touchtone dialling offers worldclass telecommunications.Telecommunications is one of the fastest growing sectors of

Africa's economy, driven by rapid growth in mobile telephony and broadband connectivity.

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With a network that is 99.9 per cent digital and includes the latest in fixed-line, wireless andsatellite communication, the country has the most developed telecoms network in Africa.In 2009, South Africa was ranked 34th in the world in terms of fixed-line

telephony, with over 4.3 million fixed-line connections.Fixed-line telephony is still dominated by Telkom, which is listed on the JSE( Johannesburg Stock Exchange) and a majority is owned by the DoC(Department of Communications).Telkom's monopoly in running fixed-line services came to an end in 2006, when the country's second fixed-line operator, Neotel, began its operations. Majority-owned by India's Tata Communications, Neotel offers telephony and data services using CDMA technology.The introduction of number portability means that customers can switch between Telkom and Neotel, as well as between mobile networks, and retain their existing numbers.The Independent Communications Authority of South Africa has been working to bring down the costs of telephony by regulating mobile termination rates ± the amount that operators have to pay for using another operator's network. In case of mobile telephony, South Africa is one of the fastest growing mobile communications markets in the world. As of 2009, there were over 46.4-million mobile users in South Africa, ranking the country 26th in terms of subscriber numbers.The mobile landscape is dominated by multinational companies Vodacom and MTN Group, with the smaller Cell C( South Africa¶s cellular network provider) coming in third position.In 2010, Telkom also entered the mobile market with its own offering, 8ta, which will run off MTN's network infrastructure until Telkom rolls out its own base stations.There are also two mobile virtual network operators (MVNOs), which are cell phone companies that operate in partnership with an existing mobile company, whose infrastructure they also use.Both existing MVNOs operate in partnership with Cell C: Virgin Mobile has been operating since 2006, and has recently secured investment from a Bahamas-based investment company, while energy drink manufacturer Red Bull entered the market in 2011.South African mobile companies are also making inroads internationally, with MTN leading the way: the company has well over 100million subscribers in more than 20 countries in Africa, Asia and the Middle East.

UNITED KINGDOM

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It is hard to think of a day in life without the dependence on Information and Communication Technologies (ICT) like internet or mobile phones, in a fast changing world. The Telecommunication era began with the invention of Alexander Graham Bell¶s invention of Telephone and Marconi¶s invention of radiograph. The Telecom Industry Association (TIA) 2008 report revealed that the global telecom market will hit $3 trillion by 2010 and can become an important factor for the growth in the world economy. The telecom industry has evolved from being a simple set of wire that connected locations with a switchboard to mobile devices in a period of 3 decades, with ³punch cards´ in the initial days to semiconductors and silicon based chips. The evolution of semiconductors enabled new devices to connect to the network in parallel to the revolution in information technology (IT). This Telecom Industry in conjunction with the IT industry, developed new products that are taking the telecom industry to the next level of invention. The UK telecommunications industry provides communication and information services, i.e. delivery of voice, data and media over different networks like mobile, telephone networks and television networks. The Telecommunication in the UK was a state monopoly since reorganization in 1969 as post office telecommunications, which later split into Post Office and British Telecommunications corporations (BT) in 1981. BT had a duopoly competition with Mercury Communications until 1991, after which the UK government set to free its telecommunications network and services policy to new competitors gradually. Today, the growth in the Economy and technological developments in the telecom industry is clearly evident from the Office for National Statistics (ONS) survey, estimating that total UK telecoms turnover was £62.2bn in 2008, a 22 per cent increase from £50.8bn reported in 2003. The 2009 IHS Global Insight report reveals that the UK Mobile Industry had tremendous growth in the last 15 years and reached a maturity stage with the UK Mobile Market penetration rate of 121 per cent in 2008. A UK Research groupdeclares that Telecommunications is a key input factor for the UK economic growth, a facilitator of socio-economic advancement and a critical utility for economic development, much like water and energy. This statement is in line with the telecom¶s growing share of world output and household spending. The World Bank estimates global telecommunications spending as a share of global gross domestic product was 2.5 percent in 1990. Analysts at Insight Research estimated that in 2006 telecom spending had grown to 4.8 percent. The Insight Research further estimates telecom spending will grow to 5.9 percent of global GDP by 2013, despite the current recession and credit crunch. With this
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numeric evidence, it is clearly evident that there is a great potential in the global and UK telecom industry. But on a still more closer look, we find significant challenges that the industry is currently facing that makes more of the telecom firms to rethink their strategic decisions, both on a short term as well as on a long term.

3.8. CONCLUSION The study explains different aspects of the telecom sector. It also includes the analysis of telecom sector in details which covers the full explanation of market share, its segment and also for what reason the market share increase or decrease. It also explains the different way of advertisement and their strategy. It speaks of mergers and acquisitions, the various players, the market leader, the market challenger, the technological advancements, the research and developments in the field.

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CHAPTER 4 CONCLUSION

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4.1. CONCLUSION India is in its way to become economic power, telecom sector is integral part of its economy and plays a major role in its GDP. The two major reasons that have fuelled the growth in this sector are low tariffs coupled with falling handset-prices. Surprisingly, CDMA market has increased its market share upto 30% owing to Reliance Communication. However, across the globe, CDMA has been losing out numbers to popular GSM technology, contrary to the scenario in India. The other reason that has tremendously helped the telecom Industry is the regulatory changes and reforms that have been pushed for last 10 years by successive Indian governments. The telecom reforms have allowed the foreign telecommunication companies like Vodafone to enter Indian market which has got huge potential. Though fixed line market share has been dropping consistently, the overall (fixed and mobile) subscribers have risen and reached to 806.13 million subscribers. In Telecom sector in India BhartiAirtel is the market leader with 20.70% of market share followed by Reliance and Vodafone. Due to huge population and low handset cost as well as low tariffs mobile handset have become handy which is very good for service providers and opens lot of scope for development. Initiatives like Mobile Number Portability (MPN) implemented in 2011 bring changes in the mobile service without chaging the number encourages consumer centric approach. In addition to services like GSM,GPRS AND CDMA other services like internet, WiMax, broadband further strengthened the telecom sector.2G, 3G and now the latest 4G has brought drastic change in the technology. The major mergers and acquisitions in the telecom industry was also an important factor for the development. This also gave way for telecommunications providers to provide their services in the urban and rural market. Reliance introduced new plans with low rates which made it very cheap and affordable for low income groups. Through Aggressive marketing and promotional strategies the players have increased their services compete with each other on point to point basis which is advantageous for the consumers.

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The FDI entry and the spectrum licensing which was given by the Telecom Regulatory Authority of India (TRAI) will bring some enormous growth in the future of the telecom industry.

CHAPTER 5

REFERENCES

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1. www. economywatch .com/ world-industries-industries/ telecommunications/ustelecom-industry.html 2. www. marketresearch.com/ product/ display.asp?productid=2874689 3. www. businesswire .com/ news/ home/ 20110315007343/ en/ Research -MarketsJapan---2011-Key-Statistics 4. www.researchmarkets.com/ research/ 9ada1e/ japan-key-statistics-telecom-marketregulatory 5. www.southafrica.info/ business/ economy/ infrastructure/ telecoms.html 6. vinodhsolly.wordpress.com/ 2010/ 02/ 12/ an-analysis-of-uk-telecom-industry 7. http://technology.ezinemark.com/indian-telecom-analysis-2008-201216be2edcf4a.html 8. The future outlookhttp://industrytracker.wordpress.com/2011/02/25/telecomFEB

industry-in-http://www.indialawoffices.com/pdf/telecommunication.pdfindia/25,2011 SONAL THAKUR

9. http://www.indialawoffices.com/pdf/telecommunication.pdf- INDIAN TELECOM SECTOR 10. http://www.ibef.org/artdispview.aspx?in=72&art_id=27608&cat_id=470&page=3ibef 11. http://business.mapsofindia.com/communications-industry/reforms-india.html 12. http://findarticles.com/p/articles/mi_7058/is_1-2_17/ai_n28556200/ 13. www.trai.gov.in 14. www.afaqs.com 15. http://www.adityabirla.com/ 16. https://www.crisilresearch.com/CuttingEdge/ 17. www.webopedia.com 18. http://www.telecomspace.com/emerging.html 19. http://www.bharti.com/wps/wcm/connect/BhartiPortal/Bharti/home/our_companies 20. APA Citation Style ± Cornell University Library 21. http://www.aircel.com/AircelWar/appmanager/aircel/delhi?_nfpb=true&_pageLabel= pages_homh

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22. http://www.ideacellular.com/IDEA.portal?_nfpb=true&_pageLabel=IDEA_Page_Ide ainMedia&displayParam=IDEA_MNP.html 23. http://findarticles.com/p/articles/mi_m0EIN/is_2007_August_24/ai_n27354642/?tag= rel.res1 24. Shah.C (2008, Jun 25).IDEA ±SPICE MERGER, IDG News 25. http://www.icicidirect.com/ULFiles/UploadFile_200729193835.pdf 26. Deccan Heralad, Saturday, January 17, 2004 27. http://www.tata.com/company/releases/inside.aspx?artid=zoOarzwuq58 28. (2009, Mar 27).DOCOMO Completes Acquisition of Stake in Tata Teleservices Limited, JCN Newswires 29. Ribeiro, J. (2010, Jun 8). India's BhartiAirtel Completes Acquisition of Zain Africa, IDG News 30. B.G. Evans and K. Baughan, ³Visions of 4G,´ Vol. 12, No. 6, pp. 293±303, Dec. 2008. 31. ³Mobile Broadband,´ Vol. 234, No. 16, pp. 293±303, Dec. 2010.

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