Tuesday, July 7, 2015

Indian Telecom Timeline and Spectrum Auction History



Indian Telecom Timeline:


Year
Major Events
1991
•       The government allowed private telecom companies to manufacture telecom switches for telephone exchange

1992
•       The Department of Telecommunication (DoT) invited bids for licenses for cellular service across the four metros.
•       The DoT offered two licenses per metro city.
•       Rejected bidder went court; mobile service delayed by three years. First mobile service was launched in Calcutta in 1995
•       Bombay: BPL Telecom and  Maxtouch   
•       Delhi: Bharati Telecom and Sterling;                       
•       Calcutta: Usha Martin and  Modi Telstra;              
•       Madras: Skycell RPG and Cellular

1993
•       The DoT commissioned ICICI to study and prepare a report on the possibility of private participation in the telecommunication sector.

1994
•       National Telecom Policy, 1994

1995
•       DoT allowed bidding for cellular licenses and wireline licenses;
•       Spectrum was bundled with the telecom service provider license; country was divided into 21 circles (excluding four metros)
•       DoT awarded two licenses in each circle; one to the state operator and the other to the private operator
•       The potential service providers in order to be eligible for bidding for licenses had to partner up with a foreign company
•       Total 34 licenses were issued; The term of the license was fixed at ten years which was revised to 15 years
•       There was no allocation spectrum but the government levied charges for spectrum usage as well
•       Six of service providers were in default due to non-payment of license fee by the early 1997 and by year 1998 defaulters increased to eight
•       Bureau of Industry Cost and Prices (BICP) found that 13 operators were running in loss. According to ICICI study projection  of revenue by DoT was wrong
•       TRAI studied the cellular operators and come up with New Telecom Policy, 1999

1998
•       Internet services were rolled out in 1995 by Videsh Sanchar Nigam Limited (VSNL)

1999
•       New telecom policy allowed the migration of the licensees from a Fixed License Fee Regime to a Revenue Arrangement Scheme
•       Policy allowed the government as the third operator in the circle
•       TRAI regulated the tariff under the New Telecom Policy, 1999. It brought down the call tariff from the peak rate of 16.80 to Rs. 6 per minute

2000
•       The government issued license for national long distance telephony (NLDO)
•       There are 32 companies other than BSNL, the incumbent, which have been granted license for national long distance services.

2001
•       Licence for basic telephone services using wireless in local loop (WLL)
•       This was the first time that the first-come-first-serve scheme was implemented for issuing licenses
•       A bid for cellular license for a fourth operator was introduced in January 2001

2002
•       DoT issued license to private operators for International Long Distance Telephony (ILD) services. The license was valid for a term of 30 years

2003
•       Introduction of calling party pays (CPP). Under CPP, no charges can be levied on receiving a call in the home circle
•       Unified Access Service Licensing (UASL) regime was introduced by DoT.
•       The UASL “permitted an access service provider to offer both fixed and/or mobile services under the same license, using any technology.
•       The country was divided into 23 service areas, 19 telecom circles and 4 metro circles for the purpose of implementing unified access services (UAS).

2007
•       DoT allowed issuing of licenses for operating on dual technologies that is CDMA and GSM.
•       DoT also allowed single license to Internet Service Providers (ISP) but restriction was put in VoIP.

2011
•       The government introduced mobile number portability (MNP)

2012
•       National Telecom Policy, 2012 introduced Unified Licensing Regime. Under the regime, service operators can provide converged services.
•       The spectrum has been delinked from the license.





Spectrum Auction History:


Year
Key Points
1991
•       First auction initiated in 1991 for 4 Metros – 2 licenses per metro – 900 MHz band (890-915 MHz paired with 935-960 MHz)
•       Each been allocated 4.5 MHz in the 900 MHz spectrum
•       The cellular licenses provided for an initial spectrum allocation. The licensees can request the WPC for additional spectrum but allocation is not guaranteed.
•       Nov 1994 – 8 CMTS were provided for 4 metro cities to 8 private companies
•       Service started since 1995.
•       1995-1998 : 34 licenses for 18 Territorial Telecom Circles were also issued to 14 private companies
•       During this period a maximum of two licenses were granted for CMTS in each service area and these licensees were called 1st & 2nd cellular licensees.
•       These licensees were to pay fixed amount of license fees annually based on the agreed amount during the bidding process. Subsequently, they were permitted to migrate to New Telecom Policy (NTP) 1999 regime wherein they are required to pay License fee based on revenue share, which is effective from 1st August, 1999.

2001
•       Bid for fourth operator in each circle on first come first serve basis [entry fee + 17 % revenue)
•       License for basic telephone services using wireless in local loop (WLL

2008
•       Many operator got license on 2001 scheme and at 2001 price
•       Feb 2012 , Supreme Court of India cancelled many licenses which were given under this.

2010
•       This auction was to rollout 3G service and BWA; 2.1GHz & 2.3 GHz band was on auction
•       2.1 GHz
•       It was new service rollout so  5MHz (2.5Mhz –paired) block was on auction
•       BSNL/MTNL got allocation be default
•       3 – 4 operators got allocation in each circles
•       2.3 GHz
•       BWA

2012
•       This auction was for 1800 and 800 band – 2G
•       None bid for 800
•       102 out of 140 block went under bid

2013
•       This auction was for 900, 1800 and 800 band – 2G
•       None bid for 900 and 1800
•       SSTL (MTS) alone to bid for 800 band blocks

2014
•       This auction was for 900, 1800
•       Bharti, Vodafone were completing 20 yrs (1994) 900 band license
•       RJIL bid in 14 circles for 1800 band blocks

2015
•       This auction is for 800, 900, 1800 and 2100 band





Indian Telecom Market - Facts

Indian has been logically divided into 22 telecom circles / service areas. These 22 circles categories into 4 categories based upon teledensity and revenue potential. Category 1 includes metros (Delhi, Mumbai, Kolkata). Category 2 known as A category and its include Gujarat, Maharashtra, Andhra Pradesh (including Telengana), Karnataka, and Tamilnadu (including Chennai). Third category known as B category and its include Madhya Pradesh, Rajasthan, Uttar Pradesh (W), Uttar Pradesh (E), Haryana, Punjab, Kerala and West Bengal. Forth category known as C category and its include Jammu Kashmir, Himachal Pradesh, Bihar, Odisha, Assam, North East States.



Facts:
  • Second largest telecom subscribers in the world i.e. 971 million.
  • Annual subscribers growth rate is 6.09%
  • Urban Subscribers 572.29 Million
  • Rural Subscribers 398.68 Million
  • Market share of Private Operators 89.16%
  • Market share of PSU Operators 10.84%
  • Teledensity 77.58

  • 3G and 4G services active subscribers base is ~75 million.
  • Mobile data traffic growth rate is 74% in year 2014.
  • Data Usage per subscriber per month is 89.43 MB
  • 3G growth rate is 114%, due to competitive pricing, superior network experience and affordable smartphones.
  • LTE services are in early phase of deployment and suppose to grow rapidly in 2015.

  • Highest subscriber growth was in Jammu & Kashmir i.e. 5.58% between Sept2014 and Dec2014
  • Highest Negative subscriber growth was in Mumbai i.e. -1.55% between Sept2014 and Dec2014
  • J&K Circle has recorded the highest growth rate of 5.58% followed by North East (5.12%). Kerala, Mumbai, Rajasthan and Kolkata Circles recorded decline in subscriber base between Sept 2014 and Dec 2014

  • Delhi Service area has highest teledensity i.e. 235.57
  • Himachal Pradesh has the highest Rural Tele-density of 82.14, followed by Tamil Nadu (80.08).
  • Bihar continues to have the lowest Rural Tele-density of 30.43, followed by Madhya Pradesh (34.77).
  • Highest market share is with Bharti Airtel i.e. 22.72%, followed by Vodafone i.e. 18.41% and Idea with 15.50%
  • RCom on 4th place with 11.07% and BSNL on 5th place with 10.13%