Together good things happen - Airtel

ECONOMIC OVERVIEW
The global economy is recovering better than expected. With
the recovery gaining traction, risks to global financial stability
appears to be easing out. Better growth prospects in many
emerging economies and low interest rates in major
economies shall influence capital flows in emerging
economies. International Monetary Fund (IMF) estimates
global GDP to grow at 4.25% in 2010, following a 0.5%
contraction in 2009.
Amongst economies of size, India continued to be second
fastest growing in the financial year 2009-10. Following a
slowdown in the previous year, Indian economy rebounded
with a GDP growth of 7.4% as per the revised estimate of
Central Statistical Office, Ministry of Statistics and
Programme Implementation, Government of India. Sectors
of manufacturing, construction, trade, hotel, transport and
communication contributed over 50% towards GDP.
Importantly, all these sectors maintained a sustained growth
trend quarter-over-quarter during the year. This trend
together with the prediction of a favourable south-west
monsoon and accelerated spending on infrastructure
development shall help Indian economy return back to the
GDP growth range of 8.5-9.0% in the financial year 2010-11.
INDIAN TELECOM SECTOR
India is the second largest telecom market in the world and is
amongst the fastest growing markets. The country offers
robust growth opportunities driven by strong growth
fundamentals, increasing urbanisation, rising income levels
and favorable demographics. The majority of new customers
are likely to come from the rural areas with inadequate basic
infrastructure and limited or no connectivity, demanding
lower tariffs for voice calls and value added services like
information about market and commodity prices, weather
updates, health updates coupled with vernacular support at
the user interfaces. The urban consumer demands high speed
internet connectivity, audio video streaming, navigation and
location maps, music downloads, gaming, m-commerce, IPTV
and mobile TV. Innovations like shared infrastructure, new low
cost technology and energy saving devices are critical for
roll-out in rural areas. M-Commerce will emerge as the future
growth engine as the industry shifts from voice to data
services. The convenience of the mobile phone as an
instrument for conduct of financial transactions and its
potential in the process of financial inclusion and growth has
been well recognised. There is a large untapped potential for
these services in the Indian market. Given the huge growth
potential offered by the telecom industry through the
increased coverage and newer products and services, the
competition will remain intense with both existing and new
players attempting to maximise their share of the growing
telecom pie.
Indian telecom sector continued to register a robust growth
in the financial year 2009-10 and added 191.55 mn new
connections between April 2009 and March 2010.
The number of telecom subscribers in India reached
621.28 mn and the overall teledensity reached 52.74% at the
end of March 2010. Subscription in urban areas grew to
420.51 mn, recording an annual growth of over 37% and
taking the urban teledensity to 119.45%. Rural subscriptions
grew by over 62% to cross the 200 mn mark and improved the
rural teledensity to 24.31% during the year.
While wireline connections de-grew by 2.61% during the
financial year 2009-10, the growth of the telecom sector was
driven by wireless segment. The wireless segment grew by
49% during the year reaching 584.32 mn as on March 31,
2010.
Broadband subscriptions reached about 8.75 mn at the end
of March 2010. Broadband connectivity has reached 4,044
cities; 5,431 block headquarters and 613 district
headquarters covering about 106,559 villages.
RECENT DEVELOPMENT IN REGULATIONS
Telecom sector is one of the highly regulated sectors in India.
Beside Department of Telecom, the Telecom Regulatory
Authority of India set up by the Government of India is the
nodal authority, which regulates the telecom services
including fixation/revision of tariffs for telecom services in
India. During the previous year the key regulatory changes
were as follows:
Regulatory Changes
• Auction of 3G and BWA
On February 25, 2010, DoT issued a notice inviting
application (NIA) for 3G auction to invite potential bidders
to apply for 3G (2.1 GHz) and BWA (2.3 GHz) spectrum
auction. The 3G mobile services will allow high-speed
content download and broadband services. BWA
(Broadband Wireless Access), also known as WiMAX in
international jargon is wireless (not mobile) broadband
access technology.
The successful bidders will be allowed to offer 3G services
on commercial basis from September 1, 2010 while
fulfilling roll-out obligations within five years from the
time of the grant of spectrum.
• Mobile Number Portability
On September 23, 2009, TRAI issued “Telecommunication
Mobile Number Portability Regulations, 2009”. Subject to
fulfillment of certain conditions, the Regulation will allow
a mobile subscriber to switch to another service provider
with in the same licensed area at a nominal charge. The
date of enforcement of the Regulations is yet to be
notified.
• Launch of Calling Card by Long Distance Operators
On August 21, 2009, DoT has allowed the national and
international long distance operators to offer voice service
excluding IN based services i.e. tele voting, toll free
service, value added services, ringtones and local voice
service, through calling cards.