Educational technology ,careers and future : India , The fastest Growing Telecom Market and Challenges

Monday, November 26, 2018

India , The fastest Growing Telecom Market and Challenges

India is still a developing country . Telecom sector in India grown slowly  till 2016 in terms of technology . Most of the telecom players were providing only GSM and 3G connectivity to its customers. Most of the operator were charging high while customers were not having too options in terms of pricing and service . But since the Launch 4G services by Reliance Jio nationwide ,India has seen rapid growth in terms of Data speeds .


Indian telecom market was opened for Private companies in 1998 but government arm DOT was the leading player providing wired line telecom service , which was opposed by private companies as will not give them fair chance  to compete in the market. In 1999 Indian Government decided to leave direct control of telecom services provided by DOT so new PSU was formed from DOT to provide telecom services . BSNL was only providing wired Line services while private companies tarted Mobile services but these service cost were too high . BSNL launched its mobile services in 2005  due to different initiative taken by BSNL like free incoming services , brought telecom services in reach of common man . After that with decreasing prices of mobile devices caused rapid growth in penetration of Telecom services. In 2010 , BSNL launched 3G service nationwide , slowly all operators started 3G services but still Data was not highly used by Indian customers due to high cost. Telecom operators need to take huge loans for paying 3G spectrum charges.


In 2016 auction of 4G spectrum took place . Government laid one condition ,  A company interested in buying spectrum in 700 MHz band will need to shell out a minimum of Rs.57,425 crore for a block of 5 MHz on a pan-India basis. This premium band alone has the potential to fetch bids worth over Rs.4 trillion.

 Existing operators were already burdened with heavy loans could not invest such a huge amount so they bought spectrum in 1800 and 2100 MHz band in selected circles. Thus RJIO became the only operator to posses nationwide 4G spectrum , this in turn gave RJIO an edge over other operators . 


As Reliance JIO was a new entrant in Telecom market and already have invested heavily in making robust 4G network in India , the main focus was to get large customer base. . Altough Airtel launched 4G mobile services in Feb 2014 in selected cities of India , first nationwide launch was done by RJIO in April 2016 and just to attract customers provided free 4G services for six months. Due to free service there was a rush to get RJIO SIM in India, people got their 4G SIM waiting in ques for hours . First time Indian customers experienced high Data speed of 4G .

 Although RJIO garnered good customer base ,with its free services but it was a setback for existing telecom operators as their revenue started dipping sharply, free service by RJIO was extended further by six months thus giving another blow to existing operators . As RJIO network was facing several issues in call setup and voice clarity , free services helped RJIO to retain all customers . Due to free services offered by RJIO data usage in India touched record high , and youngsters got addicted to various data service .RJIO range of services on its 4G network, JIO TV, JIO music, JIO money etc. After one year RJIO started charging for its services. In one year all telecom operators were under financial stress and forced to strengthen their network ,reduce voice and data charges.

RJIO added record 20 million customers in 3 years, while it took 10 to 15 years to other operators add that much customers.


Due to free services offered by RJIO revenue of all telecom operators, AIRTEL, VODAFONE, Reliance, Tata DOCOMO, UNINOR, AIRCEL, BSNL, MTNL fell drastically. Operators were not able to pay installments for their loans . Under severe financial stress many operators shut their business. AIRCEL, TATA DOCOMO, UNINOR, Reliance ore the operators closing their business . Infrastructure of Reliance owned by Anil Ambani bought by his elder brother Mukesh Ambani . Business of AIRCEL & TATA DOCOMO purchased by AIRTEL.  Due to closure of business by telecom operators huge number of people get unemployed working withn these companies directly or indirectly. Although customer is a winner of this cut throught competition but even Government is facing loss of revenue as operators are not able to pay spectrum related charge timely.

Since 2018 ARPU of operators has fallen from approx Rs. 180 to below Rs. 100. Even government owned PSU's, BSNL and MTNL are under severe financial stress .These two PSU's are still waiting for their 4G spectrum as  Government has not allotted them spectrum. Due to  lack of 4G spectrum their customer base and revenue is not increasing. 

Only 5 national telecom operators are left in India which will  further reduce to 4 from December 2018 due to merger of Vodafone and Idea. Due to merger of Vodafone and Idea , nearly 60,000 people working with these companies will loose their Jobs .

Total cumulative debt on Telecom operators has reached whopping 7.7 Lakh crore rupees . Although operators like AIRCEL, Reliance, TATA etc. closed their telecom business ,still struggling to pay their pending dues .


Since 2014 government of India is working towards Digital India Initiative Although 4G has helped for inclusion of Indian citizens in Digital India initiative, Rural India still lack reach of High speed Data. To fill this gap Government of India launched an Initiative of NOFN(National optical fiber network) to connect 2,50,000 village Gram Panchayats with optical fiber. BBNL, BSNL are playing crucial role to implement this project, this project is yet not completed .Still total data consumption has already crossed 2360 petabytes , with average consumption per user in 4G ,reaching 30 GB/month  per user in till September 2018, with year on year increase of 144 %.

5G in India

Facing huge competition in 4G all telecom operators are working towards further upgrade of their network . AIRTEL, VODAFONE , JIO all three major operators has given indication of early launch of 5G if spectrum is allotted. Government PSU , BSNL although could not get 4G spectrum but working towards launch of 5G with all other operators and have already done MOU with NOKIA and ZTE for necessary network planning . 

  Government of India has to work towards easing financial stress on telecom operators so that they can repay their debts and spectrum charges . If financial condition of the operators further deteriorates , it will further increase unemployment as well as affect further network upgrade of the operators.

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