Article on Indian Telecom Industry

The Evolution

The India Telecommunication began with the introduction of the Telegraph. In 1850 the first experiment electric telegraph line was started. In 1881 the first formal telephone service was established in the country.  In 1991, the private investment was allowed as Value Added Services & Cellular Telecom Sector was opened up for competition. In 1994, the National Telecommunications Policy was introduced to expand the telecom facilities in all villages.

The first mobile phone & Internet was introduced in 1995.  In 1997 the TRAI was set up by the Indian Government to boost Telecom sector.

The Current Scenario

India’s Telecom is currently the second largest fastest growing Telecommunication Industry and has the third highest number of Internet users in the world. It contributes 400 billion in terms of GDP.

In last 10 years, Indian Telephone Subscriber has expanded at a CAGR of 20% to close to 1059 million & tele – density of 83.4%.  The Internet users are 462.12millions. Broadband Internet users are 171.7 million. In addition there are 869 channels & 345 Radio stations

The mobile subscribers are 1,034 billions & 24.51 million Fixed line subscribers.

The wireless segment (97.50% of total telephone Subscription) dominates the market, while the wire line segment accounts for the rest.   Urban regions accounts for 58.60 % of Telecom Subscriptions, while the rural areas constitute the remaining.   (Source TRAI)

According to recent study conducted by GSMA, India is all set to become the forth-largest smart phone market by 2020.

Major sectors of the Indian telecommunication industry are telephone, Internet and television broadcast through Radio/ Television

The Government of India liberal policy has created a strong consumer demand in rapid growth in Indian Telecom Sector. The regulatory framework has ensured availability of Telecom Services at very affordable prices.  Healthy competition is ensured between service providers to create a win – win situation. The deregulation of sector has been opened Foreign Direct Investment FDI which has made the sector as one of the fastest growing & top five employment generating sector in the country.

The sector is expected to generate four million direct & indirect jobs over the next 4 -5 years as per study conducted. The penetration will be now in rural India & rapid increase in Smart Phone gradually upgrading to 4G.

Total Mobile services market revenue is expected to be 37 billion by 2017 moving by CAGR of 5.2%. India is expected to have over 180 million Smart phones by 2019, contributing around 13.5 % to the global market. The market is likely to grow by 10.3% on year-to-year basis to reach at 104 billion by 2020. As per study the Smart phone subscriptions is expected to grow to 810 million users & Broad Band services user base in India is expected to grow to 350 million connection by 2121.

In terms of investment the Telecom Sector has attracted FDI worth 18.50 billion during last 16 years.

The major worldwide players who are benefited with India’s Liberal Policies are Le Eco, Gionee, Singtel, Axiate Digital, Vodacom SA, Swedish Telecom, and American Tower Corporations. The Government is tracking reforms in the sector and continuous to be proactive in providing growth for telecom companies.

The major Indian players who are benefited are Bharti Telecom, Reliance communication, Idea Cellular, Vodafone, BSNL, VSNL, Tata Tele Services, GTL

Some of recent initiatives that will boost the telecom sectors are:

  • Digital India
  • Smart Cities
  • Moving to Cashless Economy
  • E Commerce
  • Media & Entertainment
  • Academic program – on line content

The emerging trends are

  • Consolidation of Network Market – will lead to merger/acquisition
  • High speed Network experience to prevail over customer service experience
  • OEM to go up the value chain to protect revenue
  • Focus will shift to GPS & on line Applications taking away controls from Telecom on Monetization i.e. Pay TM, Pay U Money E wallets etc.
  • Enhance regulator focus & scrutiny on network quality Improvement

The major benefits provided by Telecom Sector are

  • Socio Economic Development
  • Narrow down the Digital divide between Urban/Rural India
  • Transparency in Governance – e governance
  • Mass Education Program
  • Virtual world Operations

The Telecom Sector is facing the following major HR challenges

  • Attracting the right /quality Talent
  • Engaging, Retaining, Rewarding the key & critical talent
  • Compensation structure to recognize differentiators
  • Managing Diversity & Inclusion
  • Integrated workforce management
  • Managing the Outsourced Employees
  • Managing Millennial

Going forward India will emerge as a leading player in the virtual world by having 700 million Internet users of 4.7 billion global users by 2025. With the Indian Government favorable policy telecom market will witness a much faster growth in next few years.

Deepak Bharara

Former Director Human Resources

LANCO INFATECH LIMITED

deepakbharara@gmail.com

09810048409

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