India Telecommunication Industry Report - H1, 2013

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India Telecommunication Industry Report - H1, 2013

The telecommunication industry has played an important role in the development of the country’s economy over the last few years. Not only has it increased connectivity across the country, it has also helped in stimulating other sectors of the economy. The telecommunication sector in India comprises several segments, namely wireless services, wire line services, internet and broadband services, satellite and cable television services, mobile valued added services and telecom equipment manufacturing.

Other than the wireline segment, all other segments have witnessed growth in the past few years. Currently, India is the world’s second largest telecommunication market in terms of mobile cellular subscribers. The Indian telecommunication industry had a good year in terms of subscriber growth but was marred by policy and regulatory issues. In February 2012, Honorable Supreme Court of India cancelled 122 telecom licenses of 11 companies owing to their alleged involvement in 2G spectrum allocation scam. In view of the directions given by the Supreme Court, the government held auction for the 2G spectrum at the end of 2012. However, the 2G auction concluded in just two days with a tepid response. Only five players participated in the auction, of which only two were among those whose licenses had been cancelled. On 16 July 2012, the government in a move to push reforms allowed the much anticipated 100% FDI in the telecom sector.

The outlook for Indian telecommunication is positive as far as rural wireless, internet and broadband segment is concerned. The low penetration rates existing in these segments will enable high growth rates both in subscriber additions and revenue in the next few years.

Key Points:

• Over the last few quarters, the growth in mobile subscription has softened a bit. In Q2FY13, the wireless subscriptions declined by 2.9% for the first time in five years.

• In 9MFY13, the wireline subscriptions saw a year on year contraction of 5.8%. The contraction was acute in urban markets while rural markets unexpectedly recorded a growth during this period.

• In the past five years, the total number of internet subscriptions grew at a CAGR of 26% while broadband subscriptions grew at a CAGR of 36%. In 9MFY13, total broadband subscriptions grew by 13.1% year on year.

• The contribution of telecom sector to India’s GDP was around INR 2tn in FY12. The sector recorded a y/y growth of 8% in 9MFY13 in terms of gross revenues.

Table of Contents

1. Industry Profile
1.1 Sector overview
1.2 Sector size
1.3 Competitive landscape
1.4 Environmental scanning
1.5 Recent developments in the industry

2. Market Trends and Outlook
2.1 Key economic indicators-India
2.2 Mobile cellular segment
2.2.1 Subscriber base
2.2.2 Minutes of usage (MoU)
2.2.3 Average revenue per user (ARPU)
2.3 Wireline segment
2.3.1 Subscriber base
2.4 Internet & broadband segment
2.4.1 Subscriber base
2.4.2 Revenue of ISPs
2.5 Industry forecast

3. Leading Players and Comparative Matrix
3.1 Leading Players
3.1.1 Bharti Airtel Ltd
3.1.2 Idea Cellular Limited
3.1.3 Reliance Communications Limited
3.2 Comparative matrix
3.3 SWOT analysis

4. Tables and Charts

Table 1: Current status of different telecommunication services segments in India
Table 2: World mobile cellular subscription statistics
Table 3: Status of major types of licenses issued by DoT
Table 4: FDI allowed in various sub-sectors of telecom
Table 5: Chronology of events-2G spectrum allocation scam
Table 6: Key objectives under the National Telecom Policy-2012
Table 7: Wireless service areas in India
Table 8: Licenses sold in 2G auction
Table 9: Subscriber base of cellular service providers using GSM standard
Table 10: Subscriber base of cellular service providers using CDMA standard
Table 11: Wireline service providers in India
Table 12: Subscriber base of wireline service providers
Table 13: Balance sheet parameters
Table 14: Valuation matrix

Chart 1: Overall teledensity-India
Chart 2: Gross Revenues from Indian Telecom Sector
Chart 3: Composition of gross revenue
Chart 4: Market share of access service providers by gross revenue
Chart 5: Cumulative FDI in telecom sector
Chart 6: GNI Per capita, Atlas method
Chart 7: Quarterly GDP growth rate
Chart 8: Average monthly USD to INR exchange Rate
Chart 9: Inflation during FY13
Chart 10: Index of industrial production
Chart 11: GDP by sectors at factor prices
Chart 12: Percentage change over previous year- GDP by Sector
Chart 13: Number of wireless subscribers
Chart 14: Comparison of rural and urban penetration rates
Chart 15: Share of prepaid subscribers in overall subscriber base
Chart 16: Minutes of usage per subscriber per month
Chart 17: Blended average revenue per user per month
Chart 18: Number of wireline subscribers
Chart 19: Comparison of rural and urban subscriptions-wireline
Chart 20: Number of narrowband & broadband subscribers
Chart 21: Number of wireless data subscriptions
Chart 22: Market share of ISPs based on subscriptions
Chart 23: Broadband access technologies with market share
Chart 24: Market share of service providers in terms of data subscriptions
Chart 25: Quarterly revenues registered by ISPs
Chart 26: Forecast for broadband subscriptions
Chart 27: Bharti Airtel Limited- Shareholding
Chart 28: Annual consolidated revenues of Bharti Airtel
Chart 29: Profit margins of Bharti Airtel
Chart 30: Idea Cellular Limited-Shareholding
Chart 31: Segment wise revenues of Idea
Chart 32: Annual consolidated revenues of Idea
Chart 33: Profit margins of Idea
Chart 34: Reliance Communications Limited-Shareholding
Chart 35: Segment wise revenues of Reliance
Chart 36: Annual consolidated revenues of Reliance
Chart 37: Profit margins of Reliance

Number of pages: 36
Release Date: Tue, 23 Jul 2013