Indian Telecom Service Sector1
Rekha Jain2
Background
This note gives the status and an overview of the key developments in the Indian telecom sector
until April 30, 2014 beginning from deregulation and privatization that started in 1984. The
emphasis is on more recent developments.
Telecom Sector Structure3
The Department of Telecommunications (DoT) was the sole provider of all telecommunications
services and customer premises equipment until 1984 when deregulation started in the sector.
Subsequently, a corporate entity – Mahanagar Telephone Nigam Limited was created to provide
services in Mumbai and New Delhi. International services were provided by Videsh Sanchar
Nigam Limited, a state-owned enterprise. In 1989, the government set up the Telecom
Commission (TC)4 as a part of DoT as a policy and regulatory entity. The TC consisted of a
Chairman, who was Secretary, DoT, four full time members and four non-permanent members,
i.e., Finance Secretary, Secretary, Department of Industrial Policy and Promotion, Secretary,
Department of Information Technology and Secretary, Planning Commission. In 1997, the
government set up Telecom Regulatory Authority of India (TRAI). On October 1, 2000, DoT
was divided into two units – a policy making unit that continued as DoT and an operational arm
1
Research assistance provided by Ms. Sneha Jhala and Ms. Shivangi Mishra, IIMA-Idea Telecom Centre of
Excellence is acknowledged
2
IIMA Idea Telecom Centre of Excellence, IIM Ahmedabad
3
This section has been excerpted from Jain, R., “Spectrum Management in India (A)”
4
Details about Telecom Commission available at http://www.dot.gov.in/about-us/profile, accessed on June 25, 2013
1
that was set up as a wholly government owned corporation - Bharat Sanchar Nigam Limited
(BSNL). Also, TRAI was restructured into TRAI and the Telecom Dispute Settlement Appellate
Tribunal (TDSAT). TRAI was mandated with tariff regulation, fixing interconnection terms,
maintaining quality of services, etc. The TDSAT was a quasi-judicial body that adjudicated and
settled disputes between service providers or licensor and licensee and reviewed appeals against
TRAI directions. Exhibit 1 gives the institutional structure of the sector. Appeals against TDSAT
lay with the Supreme Court (SC). In 2002, VSNL was partially privatized and was later named
Tata Communications. International services were also provided by some private operators. Over
time, private operators had been introduced in all segments of services. By April 30, 2014
competition and private players had been introduced in all segments of the services such as fixed,
National Long Distance (NLD), International Long Distance (ILD), mobile, etc.
Evolution of Wireless Services
In 1992, two private mobile operators per service area and one fixed line operator had been
licensed through auctions. The services were licensed on the basis of service areas called ‘circles’
that were administrative units of DOT and later those of BSNL. These were usually co-terminus
with state boundaries. The mobile operators were required to use the GSM standard in the 900
MHz band. Besides the state owned incumbents, one private operator per circle could also
provide fixed services by participating and winning in the auction
2
Growth of 2G
Subsequent to winning the 2G bids, private operators claimed they had bid too high and could not
provide services in a commercially viable manner. The government then came out with a
National Telecom Policy, 1999 (NTP 99) that allowed the operators to convert their license fee
into a one time entry fee (which was much lower than the license fee) and an annual revenue
share for the duration of the license. In order to offset these changes in the license condition in
favour of the existing operators, the government introduced greater competition by allowing
entry of more mobile operators whose numbers would be based on TRAI’s recommendations on
a periodic basis. Any number of fixed line operators were permitted.
The government introduced the state owned operators, BSNL and MTNL as the third mobile
operator in each circle in the 900 MHz band. Subsequently, in 2001, the DOT auctioned licenses
for the fourth mobile operator, with the GSM standard in the 1800 MHz band. Some of the
operators, after acquiring fixed line licenses (whose entry fee was much lower and more
favorable regulatory regime than mobile service), that mandated CDMA based Wireless in the
Local Loop (WLL) services to provide “limited” mobility services. Given the advances in
technology, by the time licenses were rolled out, the range over which WLL could be provided
had significantly increased. These operators could essentially provide mobile services while
having a fixed service license. The Cellular Operators Association of India (COAI) consisting of
GSM operators saw this as a “back door” entry by CDMA operators for mobile services. After a
series of review processes, the COAI filed a petition in the TDSAT. Their contention was that
due to differences in the operational conditions of the two set of licenses, the fixed line operators
were essentially providing mobile services and using the regulatory disparity in license
conditions to their advantage. In its judgment dated August 8, 2003, the TDSAT allowed WLL
(LM) services to be offered as a fixed line service. In response, the COAI filed a Civil Appeal in
3
the SC, against the TDSAT judgment. The SC referred the matter back to TDSAT stating that
TDSAT’s interpretation that its jurisdiction was supervisory was incorrect. It felt that, TDSAT’s
non consideration of several materials placed before it had vitiated the decision. Therefore, the
SC decided to interfere with the TDSAT’s decision. On September 27, 2003, the SC referred the
matter back to TDSAT and asked it to develop a framework which would bring equivalence
amongst the license condition for the two sets of operators, an issue, which the SC found, had not
been adequately addressed by the TDSAT. It allowed CDMA operators to continue providing
services as it would facilitate growth in teledensity5. The SC allowed CDMA operators to
provide mobile services, after paying the license fee paid by the fourth cellular operator.
Subsequently, DOT came out with the Unified Access Service License (UASL) regime, under
which operators could provide either mobile or fixed line service using the same license. Calling
Party Pays regime was also implemented for all operators. These regulatory changes led to the
rapid uptake of mobile services, as due to competition, prices of services fell significantly.
Moreover, since the Indian economy had been growing at about 6-9% during these years, the
services became affordable to a large numbers of Indians leading to a urban teledensity of
145.78% and rural teledensity of 43.96% as of March 31, 2014. Exhibit 2 gives the teledensity
figures from 1999 to 2014. These show a significant increase in total teledensity from 2.3% in
March 31, 1999 to 75.2% in March 31, 2014. The urban teledensity has steadily increased from
6.9% as on March 31, 1999 to 169.6% as on March 31, 2012. However, it declined to 147% as
on March 31, 2013 and further to 145.8% as on March 31, 2014. The decline in teledensity after
2012 was predominantly due to the removal of inactive connections by service providers. The
rural teledensity as on March 31, 1999 was at 0.5%. It gradually increased to 44% as on March
31, 2014. The gap between urban and rural teledensity stood at 6.4% as on March 31, 1999, that
increased to 130.3% by March 31, 2012. The decrease in urban teledensity led to a reduction in
5
This section has been excerpted from Jain, R., “Spectrum Management in India (A)”
4
the gap to 101.8% by March 31, 2014. The exhibit further provides the details of wireless
subscriber base in GSM and CDMA technology. GSM subscriber base plummeted from 814.06
mn as on March 31, 2012 to 794.03 mn as on March 31, 2013. CDMA subscriber base nosedived
from 105.11 mn as on March 31, 2012 to 73.78 mn as on March 31, 2013.
The shift to UASL resulted in 5-6 operators per circle. The service licenses gave an initial
allocation of spectrum (4.4 + 4.4 MHz, which was later increased to 6.2 + 6.2 MHz), with the
proviso that additional spectrum would be allocated based on availability and operator
requirements. The allocated spectrum was far below the international norms where operators had
been given upwards of 12 + 12 MHz. As subscriber numbers grew exponentially, operators
clamored for more spectrum allocations. However, DOT claimed that there was shortage of
spectrum for commercial applications as various government departments (mainly the defence
services) had previously been allocated the spectrum in bands where commercial mobile services
could now be provided.
In order to prioritize spectrum allocation amongst competing bidders, DOT came up with a
Subscriber Linked Criteria (SLC) that allocated spectrum based on number of subscribers of the
operator in the respective service areas. SLC was not used anywhere else in the world as
operators elsewhere were given fixed amounts of spectrum. By January 2008, DoT had greatly
tightened the SLC. As a consequence, additional players could get UASL licenses and start-up
spectrum (minimum amount of spectrum required to start services). This led to a rush for UASL
licenses. 243 licenses were allocated. However, due to scarcity, start–up spectrum could be
allocated only to a few of the applicants.
Despite these regulatory hurdles, mobile services continued to grow as was the global trend.
Exhibit 3 gives details of revenue of basic services, cellular services, NLD, ILD, Internet and
5
other services for the years 2003 – 2012. During the period 2003 to 2012 the revenue share of
cellular services increased from 8,600 cr to 118,500 cr, for NLD it increased from 6,000 cr to
18,500 cr and for ILD it increased from 5,000 cr to 25,700 cr. On the other hand, the revenue
from basic services steadily declined from 25,900 cr on 2003 to 12,100 cr in 2012.
It was expected that with relatively inexpensive feature rich phones, consumer education,
economic growth (increasing the propensity to pay), VAS revenues both in absolute terms and in
relation to the total revenue was expected to grow. Exhibit 4 gives the detailed contribution to
telecom revenues. The percentage revenue from calls at 57.87% and 40.34% for GSM and
CDMA technology respectively is a major contributor in the revenue pie. Both the technologies
exhibit a similar pattern in terms of revenue contribution. A steep difference is noticed in data
usage pattern which is 33.72% for CDMA and 12.07% for GSM.
The sector attracted foreign direct investment (FDI) worth US$ 1,307 million during April 2013 to
March 2014. The cumulative flow of FDI in the sector from April 1, 2000 to March 31, 2014 was
US$ 14,163.01 million.6
Growth of 3G and Wireless Broadband
With developments in technology, several countries in Europe and Asia had allocated/auctioned
3G spectrum that allowed service providers to give faster download speeds and richer content on
mobile handheld devices. Initially, the cost of such services was high due to new equipment that
needed to be deployed in the network, higher cost of handsets and lower adoptions. Based on the
experience in several countries, it was observed that over time, such costs had come down as
adoption rates increased. When 3G services were initially deployed in any service area, it was
6
http://dipp.nic.in/English/Publications/FDI_Statistics/2014/india_FDI_March2014.pdf, accessed on June 19, 2014
6
expected that a lot of corporates, richer individuals and professionals would subscribe to such
services. On the other hand, 3G services were also expected to reduce the digital divide by
enabling mobile Internet services to those who could not afford PC costs for the Internet. In India
too, there had been a lot of debate regarding allocation of 3G licenses.
In India, the licensing framework for 3G envisaged that each service area would have 3-4
operators (depending upon amount of spectrum available). The amount of spectrum allocated
was 5 + 5 MHz in the 2.1GHz band, while initially DOT guidelines of August 2008 mentioned
that 5-10 bands would be available. Broadband Wireless Access (BWA) licensing in 2.3 GHz
band provided for two private players to be allocated 20 MHz each. BSNL and MTNL being
government owned incumbents were to get a pan India spectrum for 3G and BWA without
participation in auctions. They were required to pay the winning bid prices to the government.
3G auctions were held in May 2010. The possibility of generating high revenues and hopefully
high profits coupled with spectrum scarcity in the 2G bands had egged on companies to bid
aggressively. 3G auctions contributed Rs 67,719 cr (nearly 60% of the then sector revenues) to
the exchequer with Rs 50, 968 cr from the private sector and Rs 16,751 cr from BSNL and
MTNL. Exhibit 5 provides the detailed list of operators and their bids for service areas during 3G
auction. BWA auctions contributed Rs 38,543 cr to the exchequer with Rs 25,695 cr from the
private sector and Rs 12,847 cr from BSNL and MTNL. Exhibit 6 provides the detailed list of
operators and their bids for service areas during BWA auction.
7
Competitive Scenario
There were six large players, Bharti Airtel, BSNL, Idea Cellular Limited (ICL), Reliance
Infocomm, Tata Teleservices and Vodafone, who had a pan India or almost pan India presence.
Some relatively smaller players (who had operations in a few circles only) were also active.
Exhibit 7 gives details of scope of operations for major operators as on December 31, 2013.
Among the large players, the scale and scope of operations varied considerably. Some of them
were a part of larger Indian industrial conglomerates, (ICL, Reliance and Tata Teleservices),
while some others were a part of larger global telecom companies (Vodafone, Sistema), or were
public operators (BSNL, MTNL) and yet others like Bharti had begun their operations in
telecom. Over time, although Bharti had diversified into insurance and other services, a large part
of its revenue came from telecom services. While players like Bharti provided a whole range of
telecom services including, fixed, NLD, ILD, satellite etc, others like Vodafone concentrated on
mobile voice and data. Exhibit 8 gives the details of the large operators in terms of their scope of
revenues and profits. For the financial year 2012-13 major operators like Bharti Airtel, ICL,
Reliance Communications and Vodafone gained profits while BSNL, MTNL, SSTL, Tata
Communications and Tata Teleservices reported losses.
Government Support for Rural Telecom Infrastructure and Services
Given the commercial unviability of rural telecom service, there was a need for the government to
develop a framework for the spread of such services. Although there had been efforts in the past
for supporting infrastructure and services, the outcomes had not been effective 7. As shown in
Exhibit 2 there was high disparity in rural and urban areas.
7
http://www.dot.gov.in/about-us/telecom-glance, accessed on June 26, 2014
8
To provide a dedicated source of funds for rural areas, the DoT set up the Universal Service
Obligation Fund (USOF) in 2002 to provide support for infrastructure and services in rural areas.
All telecom service companies contributed five per cent of their aggregate gross revenue to the
USOF. While the USOF was administered by the DOT, the annual allocations were made by the
Ministry of Finance. DOT identified the areas qualifying for USOF support based on nonavailability of towers, socio-economic profiles, etc.
Exhibit 9 shows that USOF had supported fixed lines predominantly. It gives the data on the
amounts collected, disbursed and utilized in the USOF and expenses in different areas. Although
USOF designed a program for supporting infrastructure and services for mobiles but after an
initial program to put nearly 7,000 towers, there was no further expansion in this area. The
inability of DoT to use the USOF funds effectively had led to a corpus that was continually
increasing. Its value as of March 31, 2014 was Rs. 33,671.69 cr8. The response of the operators
regarding this unspent amount was to push DoT for reduced contribution from their side. They
claimed that lower contributions from them to the USOF would lead to lower prices for their
customers and hence higher penetration. This would achieve the objectives of higher penetration
in rural areas as urban areas were already saturated. The growing concern with the large amounts
of available amounts with the USOF ultimately led the government to formulate the plans for
building a National Optical Fibre Network (NOFN) to be funded by the USOF.
The Government of India (GOI) set up its wholly owned entity - Bharat Broadband Network
Limited (BBNL) - to establish and manage the NOFN. The objectives of NOFN were to provide
broadband connectivity to:
8
http://www.usof.gov.in/usof-cms/usof_fundstatus.htm, accessed on June 6, 2014
9
i. All the 250,000 village administrative units in the country
ii. Service providers in rural areas in a non-discriminatory manner9.
BBNL would utilize the existing fibre capacity of three public sector units (PSUs): BSNL, RailTel
and Power Grid Corporation of India Limited (PGCIL) 10 and lay the incremental fibre required
for connectivity.
Emerging Policy and Regulatory Issues
In January 2008, DoT had allocated licenses to a large number of operators using first-come-firstserved (FCFS) in a way that was seen to be favouring some operators, some of which were found
to be subsequently ineligible as per the qualifications for the license.
During February – March 2008, three of the successful applicants offloaded their stakes in the
name of infusing equity. Swan Telecom Capital Pvt Ltd offloaded nearly 45% equity in favor of
Etisalat of UAE for over Rs 3,544 cr, Unitech offloaded its stake of 60% equity in favor of
Telenor Asia Pvt Ltd and TTSL transferred 27.31% of equity worth Rs. 12,924 cr in favor of
NTT DOCOMO and TTSL (Maharashtra) transferred 20.25% equity of the value of Rs 949 cr in
favor of NTT DOCOMO. This mechanism allowed these companies to earn huge amounts as the
license fee was far below the infusion of equity and these companies had hardly any assets.
On the basis of a writ petition filed by some NGO and citizens, in February 2012, the SC
cancelled the 122 licenses granted to eight companies in 22 service areas allotted during 2008.
Exhibit 10 provides details of cancelled licenses, their service areas, date of application, signing
9
http://www.bbnl.nic.in/content/faq/what-is-bbnl.php, accessed on June 6, 2014
http://www.pib.nic.in/newsite/erelease.aspx?relid=102010, accessed on June 6, 2014
10
10
license and effective date of license. The SC cited that the MoC&IT, Mr A Raja and the officers
of the DoT had virtually gifted away an important national asset at throw-away prices. SC ruled
that TRAI Recommendations on allocation of spectrum were flawed and its implementation by
DoT did not match the policy objective of NTP 99. It questioned processes adopted by DoT for
spectrum allocations and grant of licenses to ineligible applicants. SC also mandated TRAI to
come up with an appropriate auction design, and for DOT and TRAI to develop a framework for
managing spectrum. The DoT and the Ministry of Finance were required to draw a blueprint for
exploring a spectrum pricing formula as per the decision of the Council of Ministers in 2003. SC
fined millions of rupees as a penalty on various telcos.
The SC judgment caused major upheavals in the industry. Telenor held Unitech liable for breach
of warrantees related to cancellation of licenses and threatened to seek compensation for
damages. Unitech, in response, also gave threat of legal action for damages caused by Telenor in
violation of its confidentiality obligation. Telenor and Sistema claimed that their investments
were covered under bilateral treaty agreements and they could go for international arbitration.
Unitech Wireless, S Tel, Loop Mobile Telecom and Etisalat DB also petitioned the DoT for
protection of their investments. ICL filed a clarificatory petition in the SC stating that since its
UASL application, which it had submitted in 2006, had been ‘unjustly’ delayed, its license
should not be considered for cancellation with those applicants who had applied in 2008.
In the subsequent auction for 800 MHz and 1800 MHz band on November 12, 2012 that resulted
as a consequence of the SC judgment, there were no bidders for the 800 MHz band. This was
possibly due to the high reserve price of Rs 3,640 cr per MHz (Rs 4,550 cr per 1.25 MHz). There
were
five
bidders
for
the
1800
MHz
band:
Airtel,
Idea,
Vodafone,
Videocon
11
Telecommunications Limited and Telewings Communications Services Private Limited11. The
government received bids worth Rs. 9,407 cr as compared to the target expectation of Rs. 28,000
cr. Out of the 140 blocks each of 1.25 MHz of spectrum on offer, 102 got bids. Exhibit 11 gives
details of India’s 2G spectrum auction result held in 2012. Due to the poor response vis-à-vis
government’s expectations, on January 17, 2013 the EGoM reduced the reserve price for 800
MHz band in all service areas by 50% and that for 1800 MHz by 30%.
There was no response to DOT’s subsequent auction for the 900 MHz and 1800 MHz that it
announced for March 2013. TRAI clubbed the auction of cancelled licenses with the auction for
Mumbai, Delhi and Kolkata circle in 900 MHz band. This 900 MHz band spectrum would
become available subsequent to the expiry of licenses in these areas. Sistema Shyam was the sole
bidder for the 800 MHz band and secured spectrum in eight circles for Rs 3,639 cr for 1.25 MHz,
very close to the reserve price as against governments’ revenue expectation of Rs 6,400 cr.
Operators cited high reserve price in the 900 MHz and 1800 MHz as a deterrent.
DoT decided to conduct the third round of spectrum auction based on a fresh reserve price
recommendation from EGOM in 800 MHz, 900 MHz and 1800 MHz band for the quantity that
had remained unsold in March 2013. TRAI recommended a reduction in the price for the pan
India 2G license from Rs. 2,379 cr per MHz to Rs 1,496 cr per MHz in the 1800 MHz band
(around 37% decrease) on September 10, 2013.
After a series of discussion between TRAI, DoT and the EGOM, the reserve price for 1800 MHz
was fixed at Rs 1,765 cr per MHz. In the 900 MHz band, the reserve price was fixed at Rs 360 cr
per MHz, Rs 328 cr per MHz and Rs 125 per MHz for Delhi, Mumbai and Kolkata respectively.
11
A fully owned Telenor Group company
12
The auctions were conducted in February 2014. Bids worth Rs. 23,590 cr and Rs. 37,572.60 cr
were received for 900 MHz and 1800 MHz band respectively. Exhibit 12 gives details of India’s
2G spectrum auction result held in February 2014.
DoT approached TRAI on April 18, 2014 seeking its recommendations on auction of airwaves
held by 29 licencees in 900 MHz and 1800 MHz that would expire in 2015-16 across 18 out of
22 service areas. Most of these licences has spectrum in the 900 MHz band for which the telcos
had paid twice more than the base price fixed by government in the recent auction mentioned
above. The telcos held about 172 MHz in 900 MHz, and 26 MHz in 1800 MHz band.
Besides this auction of 900 MHz and 1800 MHz band, government was also working on the
auction of 800 MHz for which TRAI had already given its recommendations.
Going Forward
The telecom sector in India had contributed significantly to economic growth and also in
providing infrastructure for other economic activities to be carried out efficiently.
With the growth and profitability in the domestic sector, Indian companies had sought
international opportunities. While Bharti had been providing services in Seychelles and Sri
Lanka after winning licenses in those countries, its acquisition of the African operations of
Kuwait based Zain Telecom for US $ 10.7 bn, had made it more visible globally.12
While the service sector was doing well, telecom R&D and manufacturing were areas of concern.
Since a lot of equipment was imported, it led to FDI outflows. Without indigenous R&D, India
12
http://articles.economictimes.indiatimes.com/2010-06-08/news/27617925_1_zain-s-africa-zain-telecom-largestever-cross-border-deal, accessed on June 24, 2014
13
specific solutions (erratic power supply, support for multiple Indian languages, low cost) were
unlikely to emerge.
There was also a concern that delays and uncertainty in the regulatory regime could hamper
growth. For example 3G auctions had been delayed by over 2 years.
The existing spectrum management and policy regime, largely “command and control”, was not
quick enough to respond to technological changes that were making new wireless services
commercially viable. Nor was it in tune with regulatory developments in other parts of the world,
where increasing amounts of spectrum were being made available in license exempt bands.
Though the broadband penetration in India almost doubled (95%) from September 31, 2012 to
September 31, 2013, it was only 1.1%13. The world average of broadband penetration was 9.9%
as of September, 2013. In addition, there were concerns that the large numbers of operators in
each circle were not commercially viable.
Without further regulatory and policy interventions, it would not be possible to have growth in
telecom services that was commensurate with that elsewhere in the world. Since telecom service
growth is closely linked to economic growth, this could impede India’s economic growth.
13
http://www.broadbandcommission.org/Documents/bb-annualreport2013.pdf, http://www.businessstandard.com/article/management/india-s-broadband-nirvana-114040600673_1.html, accessed on June 18, 2014
14
Exhibit 1: Institutional Structure of the Indian Telecom Sector14
Asectoral Regulation Competition
Commission
Judicial System
Supreme Court
Ministry of Communications and IT,
Department of Telecom, (Telecom
Commission)
Regulators
Telecom Dispute Resolution Settlement
Appellate Tribunal (TDSAT)
Telecom Regulatory Authority of India
Subscribers
Government / Partially Government Service
Providers
BSNL (Corporatized)
Fixed, Cellular, ISP,
NLD, ILD (All India
other than Mumbai
and Delhi)
)
VSNL now TATA
Communications
(Privatized
Incumbent)
International/National
Private Line Services
MTNL (Corporatized
and Partially
Privatized)
Fixed, Cellular, ISP,
NLD, ILD services
in Delhi and Mumbai
14
Private Operators
Bharti-Airtel
Fixed, Cellular, NLD,
ILD, VSAT, and ISP
Vodafone
Cellular
Idea
Cellular
Others
Fixed, Cellular, NLD,
ILD, VSAT, and ISP
Source: Jain, R. & Raghuram, G. (2012). Lessons of Telecom Sector Reforms for Other Infrastructure Sectors,
Paper presented at the International Telecommunications Society 2012 Asia-Pacific Regional Conference, New
Delhi, India, February 22-24, 2012
15
Exhibit 2: Teledensity15
Table A: Growth in Teledensity
Year
Urban Rural
Gap
6.9
0.5
6.4
1999
8.2
0.7
7.5
2000
10.4
0.9
9.5
2001
12.2
1.2
11.0
2002
14.3
1.5
12.8
2003
20.8
1.6
19.2
2004
26.2
1.7
24.5
2005
38.0
1.9
36.1
2006
50.0
4.9
45.1
2007
84.2
12.9
71.3
2008
89.4
14.9
74.5
2009
119.8
24.3
95.5
2010
157.3
33.8
123.5
2011
169.6
39.2
130.4
2012
147.0
41.0
106.0
2013
145.8
44.0
101.8
2014
15
(%)
Total
2.3
2.9
3.6
4.3
5.1
7.0
9.1
12.8
18.3
33.2
36.9
52.7
70.9
78.7
73.3
75.2
Source: TRAI Performance Indicator Reports 1999 to 2013 and Highlights on Telecom Subscription Data as on
31st March 2014, http://www.trai.gov.in/, accessed on June 7, 2014
16
Table B: Growth in Wireless Subscribers, by Technology16
Year ended
(March 31st)
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Dec 31, 2013
16
Subscribers
(mn)
GSM
CDMA
3.58
6.43
12.68
26.15
7.54
41.07
11.15
69.19
20.95
120.47
44.64
192.70
68.37
297.26
94.49
478.68
105.64
698.37
113.22
814.06
105.11
794.03
73.78
824.06
62.24
Source: TRAI Performance Indicator Reports 2001-2013, http://www.trai.gov.in/, accessed on June 7, 2014
17
Exhibit 3: Revenues from Different Services for the Years (2003-12)*17
Services
2002-03 2003-04
2004-05
25.9
33.0
32.6
Basic Services
8.6
14.3
23.3
Cellular Services
6.0
5.1
6.3
NLD
5.0
4.4
3.8
ILD
1.3
1.6
1.6
ISP
0.3
0.4
0.5
Others
47.1
58.8
68.1
Total
*Revenue data for the year 2012-13 is not available
17
2005-06
34.2
36.0
9.0
7.3
1.6
0.5
88.6
2006-07
30.2
56.2
7.2
11.5
2.0
0.6
107.7
2007-08
26.7
76.6
9.7
11.5
5.4
0.6
130.5
2008-09
24.6
93.5
14.4
15.0
7.5
0.5
155.5
2009-10
18.9
96.8
16.4
17.6
9.0
0.7
159.4
(Rs ‘000 cr)
2010-11 2011-12
14.9
12.1
101.4
118.5
21.8
18.5
25.6
25.7
163.7
174.8
Source: Voice&Data, from various editions, available at http://voicendata.ciol.com/, accessed on April 17, 2013
18
Exhibit 4: Contribution Pie of Telecom Revenues (as on December 31, 2013)18
S.No
1
1.1
1.2
1.3
1.4
1.5
1.6
2
2.1
3
Revenue (excl. service tax)
Per Subscriber Per
Month (in Rs)
GSM
CDMA
% Share of Total
Revenue from
Subscribers
GSM
CDMA
Item
Usage from Home Service Area
Rental Revenue
18.65
21.64
15.05
19.25
Revenue from calls
71.71
45.35
57.87
40.34
Revenue from SMS
4.2
1.87
3.39
1.66
Revenue from data usage
14.96
37.91
12.07
33.72
Revenue from other VAS
5.01
3.44
4.05
3.06
#
Other revenue
1.89
-0.71
1.53
-0.06
Usage outside Home Service Area
Revenue from outroamers
7.49
2.93
6.05
2.61
123.91
112.43
100
100
Total revenue from subscribers
(1+2)
4
Net inter-operator settlement
-11.97
-8.82
charges receivable *
5
111.94
103.6
Net Revenue (ARPU) per month
(3+4)
*includes Interconnect Usages Charges and roaming settlement charges
# Other Revenue is negative because of the adjustment of Exceptional Items (Bad Debt) by one
of the service provider.
18
Source: TRAI Performance Indicator Report October - December, 2013, available at
http://www.trai.gov.in/WriteReadData/PIRReport/Documents/Indicator%20Reports%20-%20Dec-2013.pdf,
accessed on May 11, 2013
19
Exhibit 5: Operators, Service Areas and Bids for 3G Auction19
Service Area
Delhi
Mumbai
Maharashtra
Gujarat
Andhra Pradesh
Karnataka
Tamil Nadu
Kolkata
Kerala
Punjab
Haryana
Uttar Pradesh (E)
Uttar Pradesh (W)
Rajasthan
Madhya Pradesh
West Bengal
Himachal Pradesh
Bihar
Orissa
Assam
North East
Jammu & Kashmir
Total Cost
Circles Won
19
Aircel
1373
1580
1465
544
312
322
Bharti
3317
3247
1373
1580
1465
Idea
1258
1076
1373
514
321
1258
1076
124
37
203
41
42
30
12294
13
Vodafone
3317
3247
1258
1076
1580
312
322
223
365
514
258
203
97
41
42
30
6498
13
Tata
1465
544
544
365
124
Reliance STEL
3317
3247
37
30
5768
11
312
322
223
322
321
258
124
37
203
97
41
42
30
8583
13
223
365
514
321
258
124
37
203
97
337
3
5864
9
11619
9
(Rs cr)
Circle Total
9951
9741
3774
3228
4119
4740
4395
1632
936
1288
669
1095
1542
963
774
496
148
812
291
123
126
120
50963
Source: DoT, http://www.dot.gov.in/as/Auction%20of%20Spectrum%20for3G%20&%20BWA/Auction%20results/3G_Auction_-_Final_Results.pdf, accessed on August
21, 2010
20
Exhibit 6: Operators, Service Areas and Bids for BWA Auction20
Service Area
Delhi
Mumbai
Maharashtra
Gujarat
Andhra Pradesh
Karnataka
Tamil Nadu
Kolkata
Kerala
Punjab
Haryana
Uttar Pradesh (E)
Uttar Pradesh (W)
Rajasthan
Madhya Pradesh
West Bengal
Himachal Pradesh
Bihar
Orissa
Assam
North East
Jammu & Kashmir
Total Cost
Circles won
Aircel
Bharti
916
1059
1543
2069
523
332
71
99
64
33
21
21
3437
8
3314
4
Infotel
2241
2293
916
614
1059
1543
2069
523
259
332
120
143
184
97
125
71
21
99
64
33
21
21
12848
22
Qualcomm
2241
2293
Tikona
Augere
614
259
120
143
184
97
125
21
4913
4
1059
5
125
1
BSNL
916
614
1059
1543
2069
523
259
332
120
143
184
97
125
71
21
99
64
33
21
21
8314
2
MTNL
2241
2293
4534
2
(Rs cr)
Circle Total
6723
6879
2748
1842
3177
4629
6207
1569
777
996
360
429
552
291
375
213
63
297
192
99
64
64
38544
20
Source: DoT, http://www.dot.gov.in/as/Auction%20of%20Spectrum%20for3G%20&%20BWA/BWA%20Auction%20Results/BWA_Auction_-_Final_Results.pdf,
accessed on August 22, 2010
21
Exhibit 7: Scope of Operations for Major Operators as on December 31, 201321
Sr. Service Provider
Area for Which Licensed with No.
No. (Year of Incorporation)
1
Bharti (1995)
All India (22)
2
Aircel Group (1999)
All India (23)
3
4
Reliance Communications Ltd
(2004)
Reliance Telecom Ltd (2004)
5
6
7
Vodafone (1992)
Tata Teleservices (1989)
IDEA (1995)
8
Shyam Telelink (1992)
9
10
11
12
BSNL (2000)
MTNL (1986)
Loop Telecom Private Ltd (2005)
Telewings Communication Services
Pvt. Ltd (2009)
13 Videocon Telecommunications Ltd.
(2008)
14 Spice Communications (1997)
15 Quadrant (1998)
UASLs/UL (AS):
145
CMTSs:
37
Total:
182
21
All India (except Assam & NE) (20)
Kolkata, MP, WB, HP, Bihar, OR, Assam
& NE (8)
All India (23)
All India except Assam, NE & J&K (19)
All India except KTK & Punjab (20)
Delhi, Kol., Guj., KTK, TN incl. Chennai,
Kerala, UP-W, Raj., WB (9)
All India (except Delhi & Mumbai) (20)
Delhi, Mumbai (2)
Mumbai (1)
MH, Guj., AP, UP-W, UP-E, Bihar (6)
UASL/UL (AS)
All India except NE
All India except Chennai &
TN
All
CMTS
NE
Chennai & TN
All
All
All
Mumbai, TN incl. Chennai,
Kol., WB, Bihar, OR,
Assam, NE & J&K
All
Delhi, MH, Guj., AP,
Kerala, Haryana, UPW, UP-E, Raj., MP, HP
All
All
Mumbai
All
Guj., Har., UP-W, UP-E, MP, Bihar (6)
All
KTK, Punjab (2)
Punjab (1)
All
Punjab
Source: DoT and service providers, http://www.dot.gov.in/, accessed on July 14, 2014
22
Exhibit 8: Financial and Subscriber Details for Various Operators22
Operators
BSNL
Bharti Airtel*
Idea Cellular*
MTNL
RCOM
SSTL
Tata Communications
Tata Teleservices
Vodafone Essar*$
Operators
2003-04
2004-05
2005-06
2006-07
Revenue Profit Revenue Profit Revenue Profit Revenue Profit
33919 5977
36090 10183
40177 8940
39715 7806
5003
584
7903 1212
8310 1685
14119 3490
1313
NA
2000
NA
2987 1086
4387 1486
6101 1278
5592
939
5249
579
5583 -216
2707 -390
5387
51
NA
NA
11762# 2409#
NA
NA
NA
NA
3
1
240
-41
3371
378
3412
708
4797
70
8856
15
598 -270
807
-528
1095 -541
1407 -311
4500
154
7090
220
10000
324
10565
NA
(Rs cr)
2007-08
Revenue Profit
38047
3009
21870
5927
6737
2269
5330
-180
13427
2586
117
-181
8538
10
1707
-126
18058
347
2008-09
2009-10
2010-11
2011-12
2012-13
Revenue Profit Revenue Profit Revenue Profit Revenue Profit Revenue Profit
35812
575
32045 -1822
29688 -6384
27933 -8850
27128 -7884
30419 6875
33128 9440
36340 8555
40309 8224
44023
7067
10154 2836
12499 3459
15503 3791
19541 5092
22458
6005
5250
212
5058 -2611
3992 -2802
3624 -4110
3714 -5321
13694 4803
12512
479
12614 -758
11863
156
12820
624
128 -1212
260 -2672
764 -2367
1508 -3159
1231 -2882
10206
315
11194 -598
12185 -777
14340 -795
17439
-623
1942 -160
2069 -298
2249
50
2470 -518
2608
-659
26651 -297
30863 -367
38207
149
42270
595
42855
2190
BSNL
Bharti Airtel*
Idea Cellular*
MTNL
RCOM
SSTL
Tata Communications
Tata Teleservices
Vodafone Essar*$
*EBITDA
$
Essar was acquired by Vodafone is 2006 and data from subsequent years is not available
#
For fifteen months ended March 31, 2007
22
Source: Company Reports, Bombay Stock Exchange and Voice&Data 2004, 2005, 2006, 2007 and 2008
23
Exhibit 9: Amount Collected, Disbursed and Utilized through USOF23
Financial
Year
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
Total
23
Funds Collected
as UAL (as per
DoT A/Cs)
1653.61
2143.22
3457.73
3215.13
3940.73
5405.80
5515.14
5778.00
6114.56
6723.57
6735.46
7885.23
58568.18
Funds
Allocated
300.00
200.00
1314.59
1766.85
1500.00
1290.00
1600.00
2400.00
3100.00
1687.96
625.00
2163.45
17947.85
Funds
Disbursed
300.00
200.00
1315.00
1766.85
1500.00
1290.00
1600.00
2400.00
3100.00
1687.96
625.00
2163.45
17948.26
Source: www.usof.gov.in, accessed on June 7, 2014
Reimbursement of
LF and Spectrum
Charges to BSNL
2300.00
2300.00
1765.68
582.96
0
0
0
0
0
0
0
0
6948.64
(Rs cr)
Balance
-946.39
-356.78
377.46
865.32
2440.73
4115.80
3915.14
3378.00
3014.56
5035.61
6110.46
5721.78
33671.69
Exhibit 10: List of Licenses Cancelled24
Name of the Operator
Brand
(Number of Licenses)
Name
Tata Teleservices Ltd (3)
Idea Cellular Ltd (9)
DoCoMo
Idea
Spice Communications Ltd
(4)
Swan Telecom Pvt. Ltd (13) Etisalat
DB
Allianz Infratech (P) Ltd (2)
S Tel Ltd (6)
S-Tel
Datacom Solutions Pvt Ltd
(21)
24
Videocon
Subscriber Service Area/s
Base as on
February 2,
2012(cr)
N/A Assam, Jammu &Kashmir, North East
0.66 Punjab
Assam, Jammu &Kashmir, Karnataka,
Kolkata, NE, Orissa, Tamil Nadu
(including Chennai), West Bengal
Delhi
Uttar Pradesh, Haryana, Maharashtra
0.17 Uttar Pradesh, Gujarat, Haryana,
Karnataka, Kerala, Maharashtra,
Punjab, Rajasthan , Tamil Nadu
(including Chennai), Uttar Pradesh
(East), Uttar Pradesh (West)
Delhi, Mumbai
Bihar, Madhya Pradesh
0.36 Orissa
Assam, Jammu & Kashmir, North
East
Bihar, Himachal Pradesh
0.55 Uttar Pradesh, Assam, Bihar, Gujarat,
Haryana, Himachal Pradesh, Jammu
& Kashmir, Karnataka, Kerala,
Kolkata, Madhya Pradesh,
Maharashtra, North East, Orissa,
Rajasthan, Tamil Nadu (including
Date of
Application
Date of
Issue of
LOI
Date of
Signing of
License
Effective
Date of
License
21.06.06
26.06.06
26.06.06
10.01.08
10.01.08
10.01.08
03.03.08
27.02.08
28.02.08
25.01.08
25.01.08
25.01.08
31.08.06
31.08.06
03.02. 07
10.01.08
10.01.08
10.01.08
03.03.08
29.02.08
03.03.08
25.01.08
25.01.08
25.01.08
03.02.07
09.06.07
07.07.07
07.07.07
10.01.08
16.07.08
10.01. 08
10.01. 08
27.02.08
08.07.08
03.03.08
03.04.08
25.01.08
31.07.08
25.01.08
25.01.08
07.07.07
28.08.07
10.01. 08
10.01. 08
29.02.08
27.02.08
25.01.08
25.01.08
Source: IBNLive.com, http://ibnlive.in.com/news/list-of-122-cancelled-2g-licences-are-you-are-affected/226535-53.html, Column 1, 4, 5, 6, 7 & 8, accessed on April 15, 2013,
http://www.trai.gov.in/WriteReadData/PressRealease/Document/InfoPress-Telecom%20Subscription%20Data_%2029022012.pdf, Column 2 & 3, accessed on June 25, 2013
Name of the Operator
(Number of Licenses)
Loop Telecom Private Ltd
(21)
Brand
Name
Loop
Adonis Projects Pvt Ltd (6)
Aska Projects Ltd (3)
Nahan Properties Pvt Ltd
(6)
Volga Properties Pvt Ltd
(3)
Azure Properties Ltd (1)
Hudson Properties Ltd (1)
Unitech Builders & Estates
Pvt Ltd (2)
Shyam Telelink Limited
Unitech
MTS
Subscriber Service Area/s
Base as on
February 2,
2012(cr)
Chennai), Uttar Pradesh (East), Uttar
Pradesh (West), West Bengal
Delhi, Mumbai
0.32 Bihar, Gujarat, Himachal Pradesh,
Kerala, Kolkata, Punjab, Rajasthan ,
Uttar Pradesh (East), Uttar Pradesh
(West), West Bengal
Uttar Pradesh, Delhi, Haryana,
Karnataka, Maharashtra, Orissa,
Tamil Nadu (including Chennai)
Assam, Jammu & Kashmir, North
East
Madhya Pradesh
Haryana, Himachal Pradesh, Punjab,
Rajasthan, Uttar Pradesh (West)
Jammu & Kashmir
Uttar Pradesh, Kerala
Karnataka
Bihar, Uttar Pradesh (East.)
Assam, North East, Orissa, West
Bengal
Gujarat, Madhya Pradesh, Maharshtra
Kolkata
Delhi
Tamil Nadu (including Chennai),
3.63 Mumbai
1.41 Madhya Pradesh, Mumbai
Date of
Application
Date of
Issue of
LOI
Date of
Signing of
License
Effective
Date of
License
28.08.07
09.06.07
10.01. 08
10.01. 08
28.02.08
03.03.08
25.01.08
25.01.08
09.06.07
10.01. 08
03.04.08
25.01.08
09.06.07
10.01. 08
03.05.08
25.01.08
09.06.07
24.09.07
10.01. 08
10.01. 08
29.02.08
28.02.08
25.01.08
25.01.08
24.09.07
24.09.07
24.09.07
24.09.07
24.09.07
10.01. 08
10.01. 08
10.01. 08
10.01. 08
10.01. 08
29.02.08
28.02.08
29.02.08
28.02.08
29.02.08
25.01.08
25.01.08
25.01.08
25.01.08
25.01.08
24.09.07
10.01. 08
28.02.08
25.01.08
24.09.07
24.09.07
24.09.07
10.01. 08
10.01. 08
10.01. 08
29.02.08
29.02.08
29.02.08
25.01.08
25.01.08
25.01.08
25.09. 07
10.01. 08
03.03.08
25.01.08
Name of the Operator
(Number of Licenses)
(21)
Brand
Name
Subscriber Service Area/s
Base as on
February 2,
2012(cr)
Bihar, Gujarat, Himachal Pradesh,
Kerala, Kolkata, Punjab, Uttar
Pradesh (East), Uttar Pradesh
(West), West Bengal
Uttar Pradesh , Delhi, Haryana,
Karnataka, Maharashtra, Orissa,
Tamil Nadu (including Chennai)
Assam, Jammu & Kashmir, North
East
Date of
Application
Date of
Issue of
LOI
Date of
Signing of
License
Effective
Date of
License
25.09.07
10.01. 08
03.04.08
25.01.08
25.09.07
10.01. 08
03.05.08
25.01.08
25.09.07
10.01. 08
03.07.08
25.01.08
Exhibit 11: India's 2012 2G Spectrum Auction Results25
Service Area
Price
Telecom Operator
(Rs cr) Telenor Airtel Idea Vodafone Videocone
Andhra Pradesh
287
4
Assam
9
1
4
2
Bihar
46
4
1
2
4
Delhi
Gujarat
225
4
4
Haryana
47
2
4
Himachal Pradesh
8
1
Jammu & Kashmir
6
4
2
Karnataka
Kerala
65
1
Kolkata
114
4
Madhya Pradesh
54
2
4
Maharashtra
263
4
1
Mumbai
North East
9
4
2
Orissa
20
4
2
Punjab
67
1
Rajasthan
Tamil Nadu
306
4
UP (East)
76
4
1
4
UP (West)
107
4
2
4
West Bengal
26
5
2
Total Cost (Rs cr)
4018
9
2031
1128
2221
Circles
6
1
8
14
6
Blocks Won
24
1
30
23
24
* Figures vary due to rounding-up of values
25
Total Price
(Rs cr)
1148
61
511
0
1799
279
8
38
0
65
455
324
1314
0
53
122
67
0
1224
686
1074
181
9408*
18
Total
Blocks
4
7
11
0
8
6
1
6
0
1
4
6
5
0
6
6
1
0
4
9
10
7
102
Source: http://www.medianama.com/2012/11/223-indias-2g-auction-ends-results-chart-operatorwise-results-what-next/, accessed on June 17, 2014
Exhibit 12: India's 2014 2G Spectrum Auction Results26
Circle
900 MHz
Delhi
Kolkata
Mumbai
Total Cost
Circles Won
1800 MHz
Andhra Pradesh
Assam
Bihar
Delhi
Gujarat
Haryana
Himachal Pradesh
J&K
Karnataka
Kerala
Kolkata
Madhya Pradesh
Maharashtra
Mumbai
North East
Orissa
Punjab
Rajasthan
Tamil Nadu
UP (East)
UP (West)
West Bengal
Total Cost
Circles Won
Overall Cost
Circles Won
26
Airtel
Idea
Jio
4446
1362
2815
8623
3
3705
1434
978
945
195
2548
218
380
162
1966
1427
61
16
1364
260
365
292
1632
49
80
443
213
1040
(Rs cr)
Uninor RCOM Aircel Vodafone Total
Cost
3705 11855
1362 2725
6194 9009
11261 23589
3
3705
1
228
217
95
98
2912
1046
65
11
775
520
353
2613
544
35
775
260
365
323
1452
1795
45
80
775
364
584
163
2230
13
432
42
32
21
115
256
1290
115
190
108
138
9905 7010 11056
15
11
14
18528 10715 11056
18
12
14
845
5
845
5
163
1
163
1
30
211
5
210
5
Source: http://dot.gov.in/sites/default/files/Provisional_results.pdf, accessed on June 17, 2014
3683
412
95
7644
2854
227
61
27
3689
1404
1314
968
4065
6365
141
160
907
276
2330
486
190
276
37573
8383
11
19644 61162
14