Managerial Economics: Analysis of the Indian Telecom Sector
PROJECT REPORT ON
MANAGERIAL ECONOMICS
ANALYSIS OF TELECOM SECTOR IN INDIA
INTRODUCTION
India is the fourth largest telecom market in Asia after China, Japan and South Korea. The Indian telecom network is the eighth largest in the world and the second largest among emerging economies. At current levels, telecom intensiveness of Indian economy measured as the ratio of telecom revenues to GDP is 2.1 percent as compared with over 2.8 percent in developed economies. Indian telecom sector has undergone a major process of transformation through significant policy reforms. The reforms began in 1980s with telecom equipment manufacturing being opened for private sector and were later followed by National Telecom Policy (NTP) in 1994 and NTP'1999. The liberalization of the industry has created an impressive forward-momentum in India, resulting in a vigorously competitive and fast growing sector. Moreover, the government had relaxed significantly the foreign investment norms in the sector. According to the Department of Trade, India’s investment policy framework permits foreign direct investment (FDI) in a number of key sectors of the telecom markets. The benefit of this liberalization has been the drastic reduction in call charges. Where a 1 minute trunk call cost Rs. 30 earlier now it costs on Rs. 1. Due to the entry of BSNL and MTNL, cellular telephony costs have also come down rapidly. According to the latest data issued by the Cellular Operators Association of India (COAI), the industry association representing all GSM operators, the number of India's GSM subscribers had touched 136 million as of the end of June 2007-recording an addition of 5.4 million during June, or a growth of 4.12% when compared to 130.1 million at end-May 2007
The Unified Access licensing regime implemented in the year 2003, gave a major boost to this industry as it permitted basic and/or cellular mobile service using any technology. And today, India is one of the fastest growing markets
MANAGERIAL ECONOMICS
ANALYSIS OF TELECOM SECTOR IN INDIA
INTRODUCTION
India is the fourth largest telecom market in Asia after China, Japan and South Korea. The Indian telecom network is the eighth largest in the world and the second largest among emerging economies. At current levels, telecom intensiveness of Indian economy measured as the ratio of telecom revenues to GDP is 2.1 percent as compared with over 2.8 percent in developed economies. Indian telecom sector has undergone a major process of transformation through significant policy reforms. The reforms began in 1980s with telecom equipment manufacturing being opened for private sector and were later followed by National Telecom Policy (NTP) in 1994 and NTP'1999. The liberalization of the industry has created an impressive forward-momentum in India, resulting in a vigorously competitive and fast growing sector. Moreover, the government had relaxed significantly the foreign investment norms in the sector. According to the Department of Trade, India’s investment policy framework permits foreign direct investment (FDI) in a number of key sectors of the telecom markets. The benefit of this liberalization has been the drastic reduction in call charges. Where a 1 minute trunk call cost Rs. 30 earlier now it costs on Rs. 1. Due to the entry of BSNL and MTNL, cellular telephony costs have also come down rapidly. According to the latest data issued by the Cellular Operators Association of India (COAI), the industry association representing all GSM operators, the number of India's GSM subscribers had touched 136 million as of the end of June 2007-recording an addition of 5.4 million during June, or a growth of 4.12% when compared to 130.1 million at end-May 2007
The Unified Access licensing regime implemented in the year 2003, gave a major boost to this industry as it permitted basic and/or cellular mobile service using any technology. And today, India is one of the fastest growing markets