Communication Industry in India

Overall Rating: star ratingstar ratingstar ratingstar ratingstar rating[5/5]Total Votes [ 9 ]  
Rate this page:
The Communication Industry in India is one of the fastest developing sectors in the country and is estimated to become the second biggest international telecom market in the next few years. As per the report published by the Telecom Regulatory Authority of India (TRAI), the total number of telephone users in India crossed 806.13 million in January 2011 as compared to 787.28 million in the previous year during the same period. The Indian communication industry has thereby registered a growth of 2.39 %. The wireless telephone subscribers touched 771.18 million in January 2011 as against 752.19 million during the same period in 2010.

The growth in communication industry was triggered by an increase in the revenues generated from both landline and mobile facilities. As per the Business Monitor International report, the nation is all set to include 8 to 10 million cellular phone subscribers on monthly basis. At this pace the communication industry is expected to encompass more than half of India's population i.e. 612 million cellular phone subscribers by mid 2012.

In addition, as per a research carried out by Nokia, the communications sector is estimated to surface as the biggest driving component in India's GDP with a contribution of about 15.4% by the FY2014.

Key Players in Indian Communication Industry

With the coming in of several new players the level of competition has increased, tremendously in the telecom industry in India. Currently the industry is witnessing as many as 15 players. According to the latest data by Telecom Regulatory Authority of India of September 30, 2010, it is Bharti Airtel that is leading the communication sector in India with 20.8 per cent market share, followed by Reliance Communication which holds 17.1 per cent market share, Vodafone with 16.8 per cent market share, BSNL with 11.4 per cent market share, Tata with11.5 per cent, Idea with 10.8 per cent and Aircel holding 6.8 per cent. The remaining market share is held by the other small players that are relatively new in the industry.

Revenue and Profit of Top Company for year 2010

Company Revenue Profit
Bharti Airtel $9.290 billion $2.079 billion
Reliance $ 45.25 billion $ 99 million
BSNL 32,045 crore 78.06 crores
Tata Communications 11,025.56 crore 538.80 crore

India as an emerging Value-Added Services Market

As per a research conducted by KPMG, the Indian mobile value-added services (MVAS) reached US$ 2.45 billion in FY December 2010. Value-Added Services account for almost 10 percent of the total revenues earned by the wireless industry. Furthermore the revenues earned by VAS are going to increase by almost 12-13 per cent by the end of 2011. To benefit from the emerging MVAS market in India, Reliance Communications and Bharti Airtel Limited are all set to introduce online cellular phone applications in Indian retail stores.

India as an emerging telecom equipment manufacturing Market

The manufacturing of Cellular phone in India is predicted to expand at an annual rate of 28.3% till the FY 2011. The production would automatically generate profits and is predicted to increase at an annual rate of 26.6% till 2011, reaching the target of USD13.7 billion.

Chief Investments in the Communication Industry in India

Over the past one decade, the flourishing Indian Communication industry has been successful in drawing the attention of conglomerates that have invested and are willing to invest more in the sector. With the influx of new telecom giants in Indian market, the investments are likely to gain immense momentum:
  • As per data published by the Department of Industrial Policy and Promotion (DIPP), the communications industry in India received foreign direct investment (FDI) of about US$ 1.33 billion in January 2011. The total foreign direct investment received by the sector from April 2010 to January 2011 is around US$ 10.26 billion.

  • Investment of USD 6 bn by Vodafone Essar for the next 3 fiscal years in order to expand its list of cellular phone subscribers to 100 million against the existing 40 million.

  • Telenor, Norway based telecom giant has purchased 7% of shares in Unitech Wireless and now possesses 67.25% by bringing in an investment of USD 431.70 million.

  • Indian government owned telecom player, BSNL will invest USD1.17 billion in its WiMax scheme.

  • A proposal of foreign direct investment worth USD 660.1 million by Federal Agency for State Property Management of the Russian Federation has been recently approved by the Indian government. The Agency would be acquiring 20% stake in Sistema-Shyam after bringing in the investment.

  • A USD 1 billion investment will be brought in by Tata Teleservices in its newly introduced GSM facility Tata DoCoMo.

Future of Communication Industry in India

Indian Communication Industry has a flourishing future in its value-added services market. The pre-set target of the 11th plan from FY 2007 - 12 is to provide 600 million cellular phone connectivity aided by an investment of USD 74 billion.

Moreover, it is estimated that by the FY 2012 the profits generated by Indian Communication Industry will touch USD 55 billion against the current USD 31 billion.