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SUMMARY
India's telecommunications market began to be liberalised in 1992, when the
value-added services and metropolitan paging services markets were opened to
competition. Since then, additional markets have been liberalised and the
sector is now fully-open to competition. Nevertheless, the state-owned
domestic fixed-line and domestic and international long-distance carriers have
managed to maintain their dominance of the sector, partly due to their
entrenched position, partly because they have been able to draw on vast
amounts of finance, but mostly due to the complex regulatory regime and the
ineffectiveness of the supposedly independent regulator to get tough with the
incumbents. India's volatile economic and political climates have also
mitigated against many of the new entrants' success, but it should be noted
that a number of Indian conglomerates are the driving forces behind most of
the private operators that have been able to make headway.
Arguably, it was the liberalisation of the cellular and basic fixed-line
services markets that provided the crucible from which the new Indian
telecommunications market has been forged. Successful cellular operators are
those which have also been able to make progress in offering basic fixed-line
services, and these have naturally evolved to the point where they have
comfortably entered the domestic and international long-distance markets. The
liberalisation of the Internet access market has also provided much of the
impetus for change in recent years.
The Indian government controls the sector's largest operators, owning 100% of
Bharat Sanchar Nigam Ltd (BSNL), the operating arm of the Department of
Telecommunications (DoT) that was corporatised in 2000 and established as a
stand-alone, but state-controlled company. BSNL offers fixed-line and wireless
telecommunications services on a local and long-distance basis throughout
India, except in the cities of New Delhi and Mumbai, where 55.6% state-owned
Mahanagar Telephone Nigam Ltd (MTNL) is the incumbent. Shares, global
depositary receipts, and American depositary shares of MTNL have been traded
on local and international stock exchanges for many years, but listing on the
US stock market did not occur until 2002. Between them, BSNL and MTNL served
40.57 million active telephone lines at the end of December 2004. Plans to
merge these two companies have been put forward, but there can be no certainty
that such a merger will receive approval from the higher authorities.
The state also has a minority stake in Videsh Sanchar Nigam Ltd (VSNL),
India's incumbent international long-distance carrier and the sole provider of
Internet services until 2000. VSNL's shares have been publicly-traded for many
years, but 2002 saw the government sell a controlling stake of 45% to the Tata
group. The Tata companies have been actively involved in the
telecommunications sector for many years, having been among the first to set
up privately-owned cellular and local fixed-network businesses when these
sectors were liberalised. With VSNL forming a key part of their
telecommunications portfolio, the Tata group is one of the most potent
competitors to BSNL and MTNL. Another Indian conglomerate with a significant
presence is the Bharti group, which served more than 10.6 million fixed-line
and cellular subscribers at the end of 2004. Foreign investors in the Indian
market are now few and far between, with all but a handful of the European and
US telecommunications companies that flocked to capitalise on liberalisation
in the mid-1990s still holding on. Hutchison Whampoa of Hong Kong controls a
number of cellular operators in partnership with others. Singapore Telecom
holds a 16% stake in Bharti's telecommunications holding company.
The national long-distance services market was opened up to competition in
November 2001, with the first private licensee announced as Bharti Telesonic;
this company was already co-operating with Singapore Telecom on the
construction of an international submarine cable system, i2i. The
international long-distance market was opened to competition in April 2002,
ending VSNL's monopoly in that market; among the new licensees are Bharti
Tele-Ventures, Reliance Infocomm and Data Access. Internet telephony has also
been enabled by the opening-up of the international long-distance market. In
addition, fixed-line basic services operators have been allowed to deploy
wireless local loop (WLL) technology to offer "limited mobility" services,
much to the chagrin of the cellular operators. Increased competition is now
leading to consolidation: the Bharti group has made a number of acquisitions
of rivals and increased its minority ownership of certain operations to 100%
over the last five years; Hutchison has purchased cellular operators in areas
where it was not already active; and, VSNL has acquired successful Internet
service provider Dishnet DSL.
Background
Each extensive ITI Market Intelligence Report includes the following sections:
Economic, Social, Political, and Telecoms Indicators; key data presented in
tabular form. Regulation; a summary/overview of the market and regulatory
climate, followed by synopses of the regulator's powers and other competition
or ministerial bodies to which it reports or with which it co-operates. A
summary of the regulations in force, a list of differences in the types of
available licences and a list of the licences issued. Market Indicators; the
available data is presented in tabular form with commentary and graphics.
Major Operators; contact data and company information, including ownership,
background where relevant for pan-European carriers, licensed activities,
scope of activities/services, recent major equipment contracts, summary of
network status, references to major subsidiaries, joint ventures, and
alliances. Major Manufacturers; contact data and company information including
ownership, background where relevant, manufacturing & distribution activities,
recent major equipment contracts, references to major subsidiaries, joint
ventures, and alliances. Industry Associations; contact data and organisation
information covering background where relevant, activities/objectives and
references to members.
TABLE OF CONTENTS
- 1. Country Background
- General Information
- Economic and Social Data
- Telecommunications Data
- 2. Telecommunications Regulation
- Summary regulation
- Regulatory bodies and division of responsibilities
- Legislation
- Licensing
- Interconnection
- Numbering
- Other issues
- 3. Communications Market Indicators
- Comparison of Results with CMA Averages
- 4. Market Overviews
- Fixed-Line Market
- Mobile Communications Market
- Internet Service Market
- 5. Major Operators
- 6. Major Manufacturers
- 7. Industry Associations
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