Market Structure Analysis

Telecom Industry

Overview of Telecom Industry:

Sectors in the Telecom Industry:

Broadly telecom industry can be divided into two sectors, Equipment Sector and Services Sector.
Equipment sector players manufacture telecom products whereas the services sector comprises of
operators and other service providers.

1. Telecommunications Equipment Sector:

The telecommunications industry equipment sector is comprised of companies that manufacture

products that are used by both end-users and input to other telecommunications companies.
Customers use these products to access telecommunications services. Other telecommunications
companies use these products to create and maintain infrastructure and deliver services.

The equipment sector provides satellite and broadcast network equipment, wireless
telecommunications equipment, wireline telecommunications equipment, and other
telecommunications and computer networking equipment e.g. Transmission lines, Optical fibre,
Local loops, Base transceiver stations, Free-space optical communication, Laser communication in
space, Multiplexers, Communications satellites, phones etc.

2. Telecommunications Services Sector:

The telecommunications services sector can be divided into the following categories:

(A) Wired Services:

The wired services subsector offers direct communication services, including fixed telephone (local
and long-distance), broadband, and cable network services. This subsector also builds and
maintains the needed fixed-line infrastructure, including landlines, microwaves, and satellite
linkups. While voice used to be the main type of data transmitted over the wires, wired
telecommunications service now includes the transmission of all types of graphic, video, and
electronic data mainly over the Internet.
(B) Wireless Services:

The wireless services subsector offers services such as cellular mobile phone, satellite, broadband
communication etc. Wireless telecommunications carriers transmit voice, graphics, data, and
Internet access through the transmission of signals over networks of radio towers.

(C) Internet Services:

The Internet services subsector offers wired, wireless, and broadband Internet services, which are
provided by telecommunications companies and Internet service providers, also known as ISPs.

(D) Resellers:

Resellers lease transmission facilities, such as telephone lines or space on a satellite, from existing
telecommunications networks, and then resell the service to other customers.

(E) Cable and Program Distribution:

Establishments in this sector provide television and other services on a subscription or fee basis.
Cable systems transmit programs over fibre optic and coaxial cables. DBS operators transmit
programming from orbiting satellites to customers’ receivers.

(F) Other Broadband Services:

These include services such as Internet Protocol television (IPTV), Voice over Internet Protocol
(VoIP), and Internet Protocol virtual private network (IP VPN or VPN). 

Since the consumer market is predominantly and increasingly catered to by the Wireless and
Internet services market, we will be focusing on these verticals.

Major Players in The Indian Market:

The Telecom sector is dominated by 3 major players – Bharti Airtel, Reliance JIO and Vodafone
Idea.
Market share distribution among players:

Operators Subscribers in Millions Market Share (Feb’22)

JIO 402.7 35.4%
Airtel 358.1 31.5%
Vodafone-Idea 263.6 23.2%
BSNL 113.8 10.0%
Total 1138.22 100.00 %
(- TRAI Telecom Sector Report 2022)
HERFINDAHL-HIRSCHMAN INDEX

Operators Market Share (Feb’22) (Market Share)2

JIO 35.4% 0.1253
Airtel 31.5% 0.0992
Vodafone-Idea 23.2% 0.0538
BSNL 10.0% 0.01
Total 100.00 % 0.2883

HHI index: 0.2883

Market Structure:

The market can be categorised as an Oligopoly, as a small number of major players are dominating
the market.

Industry progression and growth:

Telecom Industry Revenue Growth:

Year REVENUE (in Thousands)

2007 -
2008 -
2009 40444.66
2010 40265.12
2011 45513.05
2012 49242.99
2013 54283.78
2014 60716.21
2015 65226.73
2016 68335.39
2017 63315.18
2018 62198.26
2019 58414.36
2020 67533.74
 Revenue GRowth
80000

70000

60000

50000
Revenue

40000

30000

20000

10000

0
2 0 09 2 0 10 2011 2012 2013 2014 2 0 15 2016 2 0 17 2018 2 0 19 2020

Telecom Industry User Base Growth:

Number of Telecom Subscribers (Public and Private Sector Operators) and Percentage Share
in India

(As on 31st March, 2008 to 2021)

Public Sector

Year (As on 31st March) Undertakings (PSUs) Private Total

Telecom Subscribers (In Million)      

2008 79.55 220.94 300.49

2009 89.55 340.18 429.73

2010 105.87 515.41 621.28

2011 126 720.33 846.33

2012 130.27 821.08 951.35

2013 130.11 767.91 898.02

2014 120.05 812.96 933.02

2015 100.34 895.79 996.13

2016 108.65 950.68 1059.33

2017 122.18 1072.81 1194.99

2018 131.66 1080.14 1211.8

2019 133.51 1049.9 1183.41

2020 134.97 1041.82 1176.79

2021 131.16 1069.72 1200.88

Statistics of Major Players:
JIO:

About:

The company launched its 4G broadband services throughout India in September 2016. With the
largest user base and market share, Jio is the leading service provider.

Vodafone Idea:

About:

Vodafone Idea Limited is an Aditya Birla Group and Vodafone Group partnership. It is India's
leading telecom service provider. The Company provides pan India Voice and Data services across
2G, 3G and 4G platform.

•It is the 3rd largest mobile telecommunications network in India and 11th largest mobile
telecommunications network in the world.
•In 2018, Vodafone India merged with Idea Cellular, to form a new entity named Vodafone Idea
Limited.

Bharathi Airtel:

About:

Bharti Airtel Limited, commonly known as Airtel, is an Indian multinational telecommunications

services company based in New Delhi. It operates in 18 countries across South Asia and Africa, as
well as the Channel Islands with $50 billion market capital and $700 million. It is the second
largest mobile network operator in India and 2nd largest mobile network operator in the world.

ARPU Since inception (April to June Quarter):

Reference Material: