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Telecom Essay

979 words - 4 pages

India's teledensity has improved from under 4% in March 2001 to around 53% by the end of March 2010. Cellular telephony has emerged as the fastest growing segment in the Indian telecom industry. The mobile subscriber base (GSM and CDMA combined) has grown from under 2 m at the end of FY00 to touch 584 m at the end of March 2010 (average annual growth of nearly 76% during this ten year period). Tariff reduction and decline in handset costs has helped the segment to gain in scale. The cellular segment is playing an important role in the industry by making itself available in the rural and semi urban areas where teledensity is the lowest.

The fixed line segment has actually seen a decline ...view middle of the document...

Bargaining power of customers
A wide variety of choices available to customers both in fixed as well as mobile telephony has resulted in increased bargaining power for the customers.

Competition
Competition has intensified with the entry of new cellular players in circles. Reduced tariffs have hurt all operators.

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Financial Year '10
FY10 saw the continuance of strong growth for the Indian telecom market, which witnessed a 45% YoY increase in its subscriber base during the 12-month period. At the end of March 2010, the country's total telecom subscriber base (fixed plus mobile) stood at about 621 m. The tele-density level stood at about 53% by the end of the fiscal.

Growth remained robust in the GSM mobile space. GSM added 87 m subscribers during the year. After a strong 50% YoY increase in subscriptions during FY09, the GSM industry recorded another good performance during FY10, growing subscriber base by 22% YoY to about 479 m.

During FY10, India's mobile subscriber base grew by 49% YoY, from 392 m to 584 m, while the fixed subscriber base declined by about 3%, from 37.9 m to about 36.9 m.
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Prospects
As far as the fixed line business goes, the low penetration levels in the country and the increasing demand for data based services such as the Internet will act as major catalysts in the growth of this segment. The PSUs will however continue to retain their dominant position. This is on account of high capital investments required in setting up a nationwide network. As a result, the private sector players will have to rely on key business centers and pockets of high urbanisation for their growth.

Increasing choice and one of the lowest tariffs in the world have made the cellular services in India an attractive proposition for the average consumer. The segment's subscriber base has grown by over 49% YoY in FY10. As per Pricewaterhouse Coopers, India's mobile subscriber base is expected to exceed 1 bn by...

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