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A STUDY ON GROWTH AND DEVELOPMENT OFTELECOMMUNICATION

SERVICE SECTOR IN INDIA

Article in The International journal of analytical and experimental modal analysis · May 2021

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The International journal of analytical and experimental modal analysis ISSN NO:0886-9367

A STUDY ON GROWTH AND DEVELOPMENT OFTELECOMMUNICATION

SERVICE SECTOR IN INDIA

*S. NITHIYA GOWRI, Ph.D., Research Scholar, Department of Commerce, Research

and Development Centre, Bharathiyar University, Coimbatore-641 046.

** DR. N. KESAVAN, Research Supervisor, Associate Professor of Commerce,

Annamalai University, Deputed to PG and Research department of Commerce,
Sethupathy Government Arts College, Ramanathapuram

ABSTRACT
This paper is to analysis growth and development of Telecommunication service
sector in India. The telecommunication sector in India had been under government
control since independence and the market was predominantly characterized by a
monopoly structure. Right now, India is the world's second-biggest broadcast
communications market with a supporter base of 1.16 billion and has enrolled solid
development somewhat recently. The media transmission area is comprised of
organizations that make correspondence conceivable on a worldwide scale, regardless of
whether it is through the telephone or the Internet, through wireless transmissions or
links, through wires or remotely. To study the cellular service providers and mobile
phone users' growth in India. To assess the productivity and efficiency of telecom firms
operating in India and to examine the determinants of productivity of these firms.More
often than not, people face issues with their cellular network. Sometimes the problem is
related to voice calls, and sometimes it is with the internet. For the analysis on tele-
density determinants, data on FDI has been composed from the website maintained by
“Department of Industrial Policy and Promotion, Government of India”. To deflate
nominal FDI figures the GDP deflator has been used. Data on these variables have been
collected from the “TRAI performance indicators reports”-various issues, published by
TRAI. As per the customer responses, customer role will not help in challenges and as
well as opportunities for the cellular services. The government should regulate and
revamp their departmental activities without the party interventions. The telecom industry
provides many inter-benefits to other industries through providing data and solutions.
Key words: Mobile Economy, Telecommunications, 3G, 4G, GSM, GSMA, CDMA,
Introduction

Telecommunication has changed the way we think about our future. It has entered
into our daily lives and is now a necessity without which the minimum basic needs of our
modern lives would remain unsatisfied. It has affected the rich and the poor, the old and
the young, the people from all walks of life dramatically and has literally turned the world
into a global village.. Infrastructure is vital for the economic growth of a country without
the support of which the overall development of a country cannot take place. One most
important constituent of economic infrastructure is telecommunication. It has been
perceived by the Government of India that arrangement for a-list telecom framework is
the way to quick financial advancement of a country as it has inescapable overflow
impacts on different areas of the economy. The telecommunication sector in India had
been under government control since independence and the market was predominantly
characterized by a monopoly structure. Right now, India is the world's second-biggest

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broadcast communications market with a supporter base of 1.16 billion and has enrolled
solid development somewhat recently. The Indian portable economy is developing
quickly and will contribute considerably to India's Gross Domestic Product (GDP)
according to a report prepared by GSM Association (GSMA) in collaboration with
Boston Consulting Group (BCG). In 2019, India outperformed the US to turn into the
second biggest market regarding number of application downloads. The liberal and
reformist strategies of the Government of India have been instrumental alongside solid
buyer interest in the quick development in the Indian telecom area. The Government has
empowered simple market admittance to telecom gear and a reasonable and proactive
administrative system that has guaranteed accessibility of telecom administrations to
shopper at moderate costs. The liberation of Foreign Direct Investment (FDI) standards
have made the area one of the quickest developing and the main five business opportunity
generator in the country.

Concept of Tele Communication

The media transmission area is comprised of organizations that make
correspondence conceivable on a worldwide scale, regardless of whether it is through the
telephone or the Internet, through wireless transmissions or links, through wires or
remotely. These organizations made the foundation that permits information in words,
voice, sound, or video to be sent anyplace on the planet. The biggest organizations in the
area are phone (both wired and remote) administrators, satellite organizations, link
organizations, and Internet specialist co-ops. Not very far in the past, the broadcast
communications area comprised of a club of huge public and territorial administrators.
Since the mid 2000s, the business has been cleared up in fast liberation and advancement.
In numerous nations all throughout the planet, government syndications are currently
privatized and they face a plenty of new contenders. Conventional business sectors have
been flipped around, as the development in portable administrations outperforms the
fixed-line and the Internet begins to supplant voice as the staple business.

Telecommunications Industry Segments

The telecommunications sector consists of three basic sub-sectors: telecom
equipment (the largest), telecom services (next largest), and wireless communication. The
major segments within these sub-sectors include the following: 1. Wireless
communications 2. Communications equipment 3. Processing systems and products 4.
Long-distance carriers 5. Domestic telecom services 6. Foreign telecom services 7.
Diversified communication services
Profile of the Cellular Service
BSNL
BSNL (Bharat Sanchar Nigam Limited) is India’s oldest Telecommunication service
provider in India, 4thth largest mobile network provider with about 118 million
subscribers in 2020. It is owned by Government of India. It limited 4G technology to
some cities in India and lost millions of subscribers. It is headquartered in New Delhi,
India.

AIRTEL

Airtel is the third largest mobile network operator in India and second largest in
the world. Airtel founded on 7 July 1995 by Sunil Bharti Mittal and headquartered in
New Delhi. It has about 280 million subscribers in May 2020.

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VODAFONE IDEA
Vodafone and Idea merged in august 2018 in Mumbai with headquarters based
in Mumbai, Maharashtra and Gandhinagar, Gujarat Vodafone India is the 3rd largest
Mobile network operator in India with 332 million subscribers which makes it second-
largest mobile network operator in India and 5th in the world.

JIO
Jio is the largest Mobile networks operator in India and third in the world with a
subscriber base over 376 million in May 2020. It launched its 4G LTE services in
September 2016, headquartered in Mumbai, India. It is owned and founded by Mukesh
Ambani(richest person in India).
Telecommunication Service in India
The Indian mobile economy is growing rapidly and will contribute substantially to
India’s GDP according to a report prepared by GSM Association. The exponential growth
over the last few years is primarily driven by affordable tariffs, wider availability, roll out
of Mobile Number Portability, expanding 3G and 4G coverage, evolving consumption
patterns of subscribers and a conducive regulatory environment. The Indian Mobile
Industry is expected to create a total economic value of $217.4billion by 2020. According
to the study by GSMA, smart phones are expected to account for 2 out of every 3 mobile
connections globally, making India the 4thlargest smart phone market by 2020. India is
expected to lead the growth of smart phone adoption globally with an estimated net
addition of 350 million by 2020. Telecom tower in India is set to boom as its tenancy
ratio will increase from 1.95 times in 2016 to 2.9 times by 2020 due to the expansion of
3G and 4G and the onset of 5G technologies. More than 60 companies have received
approval from the Department of Telecommunication in May 2017 to provide MNVO
services, the majority of which are focused on Tier 2 and Tier 3 cities. In March 2020, the
government approved the Production Incentive Scheme (PLI) for Large- scale Electronics
Manufacturing. The scheme proposes production-linked incentive to boost domestic
manufacturing and attract large investments in mobile phone manufacturing and specified
electronic components including Assembly, Testing, Marking and Packaging (ATMP)
units.

Growth and Evolution of the Telecom Sector in India

The Indian Mobile industry is relied upon to make an all out monetary worth of
$217.4 billion by 2020. The Telecommunications business is isolated into following
subsectors: Infrastructure, Equipment, Mobile Virtual Network Operators (MNVO),
White Space Spectrum, 5G, Telephone specialist organizations and Broadband.
According to GSMA, India is headed to turning into the second-biggest cell phone market
internationally by 2025 with around 1 billion introduced gadgets and is relied upon to
have 920 million interesting portable endorsers by 2025 which will incorporate 88 million
5G associations. Telecom tower in India is set to blast as its tenure proportion will
increment from 1.95 occasions in 2016 to 2.9 occasions by 2020 because of the extension
of 3G and 4G and the beginning of 5G innovations. 5G is set to be a distinct advantage
for the telecom business and is relied upon to yield tremendous monetary freedoms over
the course of the following three to five years. India can possibly open $48.69bn through
the sending of 5G over the course of the following four years More than 70 organizations
have gotten endorsement from the Department of Telecommunications (DoT) to give
MVNO administrations. Most of these organizations are centered on Tier 2 and Tier 3

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urban areas The DoT is focusing on a mix of 100% broadband network in the towns, 55%
fiberisation of versatile pinnacles, normal broadband velocities of 25 mbps and 30 lakh
kms of optic fiber rollouts by December 2022. By December 2024, it is taking a gander at
70% fiberisation of pinnacles, normal broadband velocities of 50 Mbps and 50 lakh kms
of optic fiber rollouts at a skillet India level.
Indian telecom area is over 165 years of age. Broadcast communications was first
presented in Quite a while in 1851 when the main operational land lines were laid by the
public authority close to Kolkata (at that point Calcutta), in spite of the fact that telephone
utilities were officially presented in India a lot later in 1881. Further, in 1883, telephone
utilities were converged with the postal framework. In 1947, after India accomplished
freedom, all unfamiliar telecom organizations were nationalized to frame the Posts,
Telephone and Telegraph (PTT), a body that was represented by the Ministry of
Communication. The Indian telecom area was completely under government possession
until 1984, when the private area was permitted in telecom gear fabricating as it were.
The public authority concretized its prior endeavors towards creating R&D in the area by
setting up a self-ruling body – Center for Development of Telematics (C-DOT) in 1984 to
create cutting edge telecom innovation to meet the developing necessities of the Indian
media transmission organization. The real advancement of the business began after the
Government isolated the Department of Post and Telegraph in 1985 by setting up the
Department of Posts and the Department of Telecommunications (DoT).

Review of Related studies

Yuvraj Sharma andBharat Kumar Dak, et.al (2017) have studied on
“Emerging trends in mobile apps market and their potential impact on mobile users
engagement in the global economy”. They stated that the importance and selection of
mobile apps in the mind of people in forms of speed, costs, installation, simplicity and
integration criteria’s. Kishore Kumar Morya, and Ajit Shankar (2019) have studied on
“Diffusion of Mobile Telephony Services in India”, stated that the diffusion of mobile
telephony services in India is an interesting study not only because of the sheer magnitude
of the market but also because of the diversity in adoption rates across time and
geography Marginal decrease in subscriber numbers and consequent increase in VLR
percentage cannot be ruled out due to the impact of consolidation in the operator space
and removal of inactive numbers from subscription list. Sohail imran khan and Dhuha
saad ismael (2020) have wrote an article on “Drivers of Customer Satisfaction for
Mobile Service Provider in Maharashtra (India)” and they found that the cellular
companies have occupied a strong market position with cut-throat competition. Gone are
the days when mobile customers’ satisfaction depends on the how much money a
consumer is getting for a recharge. These days almost all the companies have the same
base plan of giving free internet and unlimited calling and thus this research work exhibits
the same. Competitive, Trustworthy and Network Coverage are driving all dimensions of
Customer Satisfaction more than Market Image, Cellular Quality and Value Added
Features.

Statement of the Problem

More often than not, people face issues with their cellular network. Sometimes the
problem is related to voice calls, and sometimes it is with the internet. The users face
network issues not just limited with one or two telecom operators, but all of them. There
are many things that you can do to resolve the problems which you are facing with your

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network. Be it voice calling or internet issues; there is a fix for everything. So if you want
to know how you can fix these problems by yourself, keep reading ahead. India has very
little penetration of fixed-line in its network whereas most of the developed countries
have a very high penetration of fixed lines (telephone line that traveled through a metal
wire or optical fiber as part of a nationwide telephone network). Only around 25% of
Towers in India are connected with fiber networks, whereas in developed nations, it is in
excess of 70%.5G Network requires towers to be connected to with very high-speed
systems. Those high speeds are not possible on the present radio systems.

Objectives of the Study

1. To study the cellular service providers and mobile phone users' growth in India.
2. To assess the productivity and efficiency of telecom firms operating in India and
to examine the determinants of productivity of these firms.
3. To examine the productivity and efficiency of the telecom service firms operating
in India.
4. To make a causality study between tele-density and economic development.

Data Sources and Methodology

This paper based on study is secondary data. Data on them were gathered from the
RBI report “Handbook of Statistics on the Indian Economy”. For the analysis on tele-
density determinants, data on FDI has been composed from the website maintained by
“Department of Industrial Policy and Promotion, Government of India”. To deflate
nominal FDI figures the GDP deflator has been used. Data on these variables have been
collected from the “TRAI performance indicators reports”-various issues, published by
TRAI.
Statistical Tools Analysis

(a) Descriptive Statistics

Descriptive statistic helps in transforming raw data into an interpretable form and
characterizing various aspects of selected variables to provide descriptive information.
(b) Compound annual growth rate (CAGR)
Compound annual growth rate (CAGR) is a rate that measures an investment
upsurges ordeclines year over year. It can also be understood as an annual average rate of
return for aninvestment during a period.

CAGR = [(Ending Value/Beginning Value) ^ (1/N)]-1

Analysis and Discussion

Table 1: Revenue and growth service providers in India (Rs. in Crores)
Service Provider 2018-2019 2019-2020 % of Change
Airtel 80780.2 87539.0 +08.37
Reliance Jio 48660 68462 +40.69
Vi 37823.6 45996.8 +21.68
BSNL 19308 18906 -02.08
Source: The Indian Telecom Services Performance Indicators

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Figure 1 : Revenue and growth service providers in India

2018-2019 2019-2020 % of Change

87539
90000 80780.2
80000 68462
70000
60000 48660 45996.8
50000 37823.6
40000
30000 19308 18906
20000
10000
0
-10000 Airtel Reliance Jio Vi BSNL

.
The changed gross income in the telecom administration area was Rs.160,814
crore (comparable to Rs.1.8 trillion or US$25.5 billion out of 2019) in 2017 as against
Rs.198,207 crore (identical to 2.3 trillion or US$32.1 billion of every 2019) in 2016,
enlisting a negative development of 18.87%. The significant commitments to this income
are as per the following (in INR crores): Airtel obtained Telenor India in May 2018 and
the information of Airtel and Telenor India has been blended. On 31 August 2018,
Vodafone and Idea converged to frame the world's second-biggest telecom organization,
and the biggest in India, formally known as Vi and both the organizations' information
has been converged On 1 November 2017, MTS India converged with Reliance
Communications and their information has been combined. Videocon shut down its
organization and ceased tasks in the Gujarat and UP (West) circles on 26 December 2015,
and in the Haryana, Madhya Pradesh, Bihar and UP (East) circles on 11 May 2016.
Dependence Communications ceased its remote voice administrations on 29 December
2017, however proceeded with its information and B2B administrations till 2018.
Table 2
Number of Cellular Phone Subscribers in India from 2010-2011 to 2019-2020
Year January Growth Rate April Growth Rate
2010-2011 267930100 298152618
2011-2012 394903249 147.39 433040658 145.24
2012-2013 556683683 140.96 580665002 134.09
2013-2014 642951987 115.49 665443934 114.60
2014-2015 657561271 102.27 664452723 99.85
2015-2016 703407370 106.97 726898823 109.39
2016-2017 687415732 97.72 711551242 97.88
2017-2018 761442767 110.76 768555222 108.01
2018-2019 954949663 125.41 953801909 124.10
2019-2020 988490648 103.51 979833387 102.72
Maximum 988490648 147.39 979833387 145.24
Minimum 267930100 97.72 298152618 97.88
Average 720932387 732918824.7
CAGR 13.94 12.63
Source: Cellular Director Association in India

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The above table 2 analysis that number of cellular phone subscribers in India from
2010-2011 to 2019-2020. The number of subscribers has divided into decade that is
January and April. The January subscriber has increased from 267930100 in 2010-2011
to 988490648 in 2019-2020. On other hand subscriber in April month 298152618 in
2010-2010 to 979833387 in 2019-2020.

Table 2
Communication in India
Gross Adjusted Revenue (2020) Rs.40877 Crore
Total Subscribers 1173.83 million
Wireless Subscribers 1153.77
Fixed line subscribers 20.05
Monthly telephone additions (Net) -1420000
Teledensity 84.90
Urban TEledensity 134.44
Rural Teledensity 58.85%
Share of Rural Subscriber 45.43%
Broadband Subscriber 747.41 Million
Broadband Subscribers (Wireless) 725.12 million
Source : The Indian Telecom Services Performance Indicators

Market share of mobile telecom operators in India as of 31 January 2021 according to

the Telecom Regulatory Authority of India (TRAI) 1. Jio (35.43%) 2. Airtel (29.72%) 3.
Vi (24.32%) 4. BSNL (10.53%)As of 31 January 2021, there are 20.08 million wireline
subscribers in India according to Telecom Regulatory Authority of India (TRAI).Market
share of FixedLine telecom operators in India as of 31 January 2021 according to the
Telecom Regulatory Authority of India (TRAI). 1. BSNL (49.29%) 2. Airtel (23.12%) 3.
Jio (14.70%) 4. Tata Teleservices (8.21%) 5. Vi (2.54%) 6. Reliance Communications
(1.08%) 7. Quadrant (1.05%)

Conclusion and Suggestions

Indian Telecommunications Industry is growing at an exponential rate and it is
expected to be one of the leading growth drivers of the Indian economy Dependence Jio
has altered the business and has totally changed the manner in which the business works.
The political and government roles are not giving any impact to meet and reduce
challenges; and to improve the opportunities in the cellular services. As per the
respondents’ opinion, marketing and social impact will give certain impact to meet and
reduce the challenges and improve the opportunities in the cellular services. The
government should regulate and revamp their departmental activities without the party
interventions. The telecom industry provides many inter-benefits to other industries
through providing data and solutions. The TRAI should consider these issues. Thus, the
CSPs need to approach the government to regularize them to serve better to their
subscribers. CSPs should concentrate the technology role to reduce the challenges and to
improve the opportunities in the cellular service. As per the customer responses, customer
role will not help in challenges and as well as opportunities for the cellular services. The
government should regulate and revamp their departmental activities without the party
interventions. The telecom industry provides many inter-benefits to other industries
through providing data and solutions. The telecom area in India needs to manage an
assortment of stand up to like keeping up the enough range, appropriation of new

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advancements quicker to have the option to utilize the new highlights and methods to
serve the clients with better and include rich help. A viable and facilitator government job
in regards to telecom area is the need of great importance given the colossal chances
given by the area. Free and legal body, Telecom Regulatory Authority of India (TRAI)
has a significant task to carry out as a guard dog of the area.
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