Market On Steroids
The price of growing too much, too fast, may come back to haunt companies in India's booming telecom market.

A little over a decade ago, Bharti Enterprises, then a small Delhi-based manufacturer of telephone instruments, wanted to enter the mobile telephony business for which the government was vending licences. It hired a city-based consulting firm to assess the market size; the firm duly presented its report; Delhi, it said, would have 5,000 people, at the most, who would subscribe to a mobile telephony service. Bharti's CEO Sunil Mittal ignored the report. Today, Bharti Tele-Ventures, an offshoot of Bharti Enterprises, has 1.65 million subscribers on its rolls in Delhi alone and boasts a one-fifth share of India's 54-million mobile telephony market.

Ten years ago, India had just 9.8 million telephone lines, all fixed. Today, it has 100 million connections, of which 54 million are mobile. That's almost a 900 per cent increase in tele-density, even after accounting for the increase in the country's population in this period. Much of the growth has happened in the past two years: in 2003, there were 13 million mobile telephony connections and 41 million fixed ones in India. Between 1997 and 2003, even as telcos focussed on mobile telephony lobbied to move from an unviable licence-fee regime to a revenue-sharing one, and struggled with operational issues that had left tariffs as high as Rs 16 a minute, those in the fixed-telephony business-this was and is dominated by state owned monoliths Bharat Sanchar Nigam Limited (BSNL), which operates across India with the exception of Delhi and Mumbai, and Mahanagar Telephone Nigam Limited (MTNL), which operates in those two cities-added almost 27 million connections, stringing more copper in the intervening six years than anyone had since the first telephone was installed in India in 1875. The economic changes wrought six years earlier were clearly resulting in an increase in purchasing power and in industrial activity, both factors that contribute to a demand for telephone services.

By 2003, however, the cost of adding a mobile connection was a fraction, roughly one-fifth or one-tenth in some cases, that of adding a fixed one. Between April 2003 and April 2005, mobile telephony companies added 41 million connections to its base while fixed telephony ones did just 4.5 million. Reliance Infocomm entered the market with relatively new CDMA technology (an alternative to European GSM standards, which operators like Bharti and Hutch use) and offered the cheapest tariffs, as low as Rs 0.40 a minute. The government on its part made licensing technology-neutral; anyone with a unified service licence, it said, could offer any telecom service. Since then, tariffs have dropped even further; today, an individual can 'go mobile', industry parlance for buying a phone and subscribing to the service, for as less as Rs 1,500. Ten years ago, that would have been Rs 30,000. "We took only nine years to reach our first 50 million (subscribers), while China took 17 years," points out Rajan Mehta, Vice President, Nortel, which sells network equipment to mobile operators. Today, China has 340 million mobile telephone customers; Mehta's comment implies that India, too, could be eyeing a similar number in the not-too-distant future.

That would help. India's Minister in charge of it and Communications, Dayanidhi Maran, a 39-year-old Harvard-educated businessman who ran a large cable television operation before being elected to India's Parliament, believes there is no reason why the country should not have 250 million phone connections by 2007 (it has a little over a 100 million now). Assuming his point of reference to be March of that year (Indian companies typically close their books of account on the last day of that month), that would give the country's telcos 22 months to achieve the target. And if it is December of the year, it would give them 31. The corresponding tele-density statistic is 22 per cent and a senior executive with a telco says it is achievable if "the regulatory and policy regime is conducive". His reference is to issues related to interconnectivity, spectrum allocation, and migration to 3g (third generation, the next level of telecom networks that offer high-speed connectivity) services.

A major portion of the 100-150 (the lower band is probably what will be achieved) million connections that will be added will be mobile telephony ones (they cost less, and can be added quickly). That would mean the mobile telephony industry that grew by 100 per cent every year for the past two, will have to do so for the next two as well. Circa May 2005, that looks difficult: in the first four months of the year the country's mobile telephony companies have added only 5.61 million subscribers. One reason for that is the seasonality of the business: this is the time telcos drop defaulting customers from their rolls; it has also traditionally been the time when customers seem to go slow. Last year, for instance, the companies added 6.59 million subscribers in this period (they did 19.62 million in the whole year).

The phenomenon of defaults is fairly common in the Indian telecommunication industry. Telcos begin their year conservatively, worried that the number of defaults on their rolls (read bad debt) will affect their financial statements; then, as the year goes on, adding subscribers becomes a keeping up with the Joneses kind of thing; and some telcos even keep the names of customers who have moved on to other networks for three to six months before knocking them off their rolls. The result, often enough, is not pleasant: in March this year Reliance Infocomm knocked 0.98 million customers, 10 per cent of its subscriber base, off its rolls. All along, rival telcos had insisted that the company's meteoric growth was not backed by prudent practices and that defaults made up around 30 per cent of its subscription base. Reliance Infocomm, in turn, had insisted that its proportion of defaults, at 3-4 per cent, was no different from the industry average.

Another reason is the fact that the penetration of mobile telephony is already high in the metros and large cities; the growth will therefore have to come from smaller cities, even rural communities. To successfully break into this market, telcos will have to improve reach and distribution, and reduce operational costs (only then will they be able to offer services at a price that the rural or value-conscious urban customer finds appealing). They will also have to increasingly go in for bundling, offering a handset and a connection at an attractive price, often subsidising the cost of the first with an eye on future earnings. Some telcos could choose to focus exclusively on small cities and rural areas offering frills-free services at a low cost. Others may evolve hybrid business models that do this at one extremity, and live off the cream at the other by offering premium value-added services (music downloads, for instance, or multi-player gaming, or news and stock tickers, even data services).

There is another way by which the target can be achieved and Manoj Kohli, President (Mobility), Bharti Tele-Ventures is quick to point this out. "If the economy grows by 7-8 per cent instead of the existing 6-7 per cent, then the growth in telecom will be far more than we have experienced." That, despite recent research that proves the existence of a relationship between increased tele-density and economic growth in developing countries-the study was conducted by a London Business School professor, Leonard Waverman, and sponsored by Vodafone-is something outside the control of telcos.

Even if they avoid the defaults-trap, most Indian telcos will be hard-pressed to make profits and the ones that are already profitable (like Bharti Tele-Ventures, which returned profits of Rs 1,439 crore on revenues of Rs 8,035 crore in 2004-05) hard-pressed to keep profit margins at current levels as they grow. This won't be because of regulatory interference: in well-regulated markets, the regulator keeps an eye on the financial performance of telcos; unnatural profits, such regulators believe, is sign of either a monopoly or inadequate service levels. It will be because the telcos will be operating in a cost-conscious market that is highly competitive and the only way by which they can grow (and help India reach that magical 250 million number) is by taking a hit, or two. The Indian telecom market will no doubt boom over the next few years, but telcos operating in it will not be making money in a hurry.

The Limits To Growth
Inadequate regulation and a short-sighted spectrum policy could hamstring telcos.

Communications Minister Dayanidhi Maran: Policy, please

If India is poised at the brink of a telecom revolution, blame the legal process. That's right: the shining example that is, of the government's efforts at deregulation and privatisation would have never been had various interested parties not taken the government/the regulator/other interested parties to court. Litigation and arbitration have been, directly or indirectly, behind the two most significant developments in Indian telecom, the New Telecom Policy of 1999 (NTP '99) that allowed cellular service providers to move from a fixed licence regime to a revenue sharing one, and the move to a unified licence regime in 2003 that effectively allowed any telco in possession of one to provide any service on any technology platform. Since then, the Indian telecom market has grown, and grown. Now, with over 100 million subscribers, the challenges facing telcos that operate in the country are different (for instance, how to profitably target low-paying rural customers). And if they are to address them successfully, the regulatory regime would have to be fair.

That it isn't at this point in time, with the government's own decisions on the policy front seeming to favour the companies it owns, BSNL and MTNL (the existing access deficit charge, ADC, regime that levies a sort of duty on all calls terminating in a fixed telephony network is heavily skewed in favour of BSNL and MTNL). To make matters worse, the regulator Telecom Regulatory Authority of India (TRAI), most operators complain, seems predisposed towards Reliance Infocomm; TRAI's recommendation on the allocation of spectrum for 3G services (it gives Reliance Infocomm an unfair advantage by allocating additional spectrum in the 800-mhz band to it and to Tata Teleservices, the other CDMA player) is, these operators claim, a case in point. Then, there is the thing about the government dragging its feet over the spectrum policy-it was due around the time this magazine went to press as indeed it has been for some time now. And so, India's telcos labour on, with inadequate spectrum at their disposal, and paying both an ADC and a contribution to the USO fund (universal service obligation, and this money is to be used to help the cause of rural telephony).

The Lite Option
A one-size-fits-all strategy will not help telcos turn profits.

Sunil Mittal's Bharti Tele-Ventures will likely be one of the two or three large integrated telcos operating in India by the turn of the decade	BSNL already has a commanding presence in fixed telephony. Now Chairman and Managing Director A.K. Sinha wants to do the same in mobile telephony

This, say executives at telcos, analysts and consultants (and there is some degree of unanimity in what they say), is how the Indian telecommunications market will look circa 2007 or 2008: five or six pan-Indian players with more or less the same number of subscribers (25-30 million; except BSNL, which everyone says will have more; the state-owned firm already boasts 35 million fixed telephony subscribers and hopes to have 40 million mobile telephony ones on its rolls by 2007), and a high degree of uncertainty over revenues and profits. "Operators will have a large subscriber base, but the revenues and profitability are a big question mark," says Prashant Singhal, Director, Ernst & Young. Falling ARPUs (average revenue per user) are behind this. Currently, ARPUs for most telcos are around Rs 400, but the number is expected to come down to between Rs 120 and Rs 175 very soon. To grow, telcos will have to tap smaller cities and rural areas; and customers in these regions are unlikely to spend as much on telephony as their counterparts in large cities.

Hutch (CEO Asim Ghosh seen above) is a pure-play mobile telephony firm that has consistently and consciously focussed on high-end and enterprise customers

Lower ARPUs will necessarily entail a higher payback time on capital expenditure. And the only way telcos can earn profits is by differentiating their offerings. There will be two or three large integrated players that offer a complete bouquet of services: fixed-line, mobile, broadband, value-added, the works. The ones that look most likely to occupy this strata are Bharti Tele-Ventures, BSNL and Reliance Infocomm. Then, there will be those telcos who focus exclusively on pre-paid services. This will be a business driven purely by volumes. "Like in the aviation industry, there is scope for one or two Air Deccans whose business model is low cost," says Singhal, referring to the company that launched India's first successful low-cost airline. Sri Lanka's Celltel, a company owned by Luxembourg's Millicom, is one such. It services half-a-million customers, 98 per cent of them through the pre-paid route, has 170 employees on its rolls and boasts a net profit margin of 30 per cent.

Today, around 80 per cent of India's 54-million mobile telephony customers are those who use pre-paid cards (they contribute over half the revenue of telcos). But the remaining 20 per cent post-paid customers account for a higher proportion of overheads, 80 per cent according to analyst estimates. Then there is the issue of defaults (bad debts), which is purely a post-paid phenomenon. A telco that shifts its focus entirely to pre-paid will save on these costs.

If recent campaigns of the leading telcos are any indication, there is a clear shift towards pre-paid. The focus of Bharti's post-paid services is on enterprise customers; for the mass market it is going the pre-paid way. Tata Teleservices' True Paid service is focussed on the pre-paid segment as well. And Reliance Infocomm is a pioneer of sorts in the pre-paid category; its Monsoon Hungama promotion that lowered entry cost to Rs 500 (for a phone and a connection) helped it enrol 10 million subscribers in two years. That 10 per cent of this defaulted is a different matter.

Hutch is a pure-play mobile telephony company that has taken the other route (it is hoping to differentiate its services and focus on high-value customers). It operates only in 13 of the country's 23 circles, provides a clutch of value-added services, and boasts an ARPU of around Rs 500. Over the next two years, other models will emerge. Some telcos could just focus on rural customers with frills-free services; others could target just one geographical area; still others could actually be mobile virtual network operators (MVNOs) and focus on branding and marketing (UK's Virgin has done this successfully in some markets); and a few could be content to be back-end providers of bandwidth and network management services to such MVNOs. Most telcos, however, will opt for hybrid models. Reliance Infocomm, for instance, targets the low-end with its pre-paid offerings, but is hoping value-added offerings such as music and movie-clip downloads, gaming, and broadband-on-mobile connectivity will help it make a dent in the high-end market. "We are very bullish on data traffic," says Mahesh Prasad, President (Applications, Solutions and Content), Reliance Infocomm. "The volume of data traffic has already overtaken that of voice traffic on wire-line networks." Today, data traffic (including smart messaging service, SMS) contributes 10 per cent to the revenues of Indian telcos and if Prasad is to be believed, this proportion could soon touch 25 per cent. By 2007, a telco's success won't just be a function of its subscription base. It will depend equally on its business model.

The Foreign Hand
Apart from STT, TMI, SingTel and Hutch, no global telco has a presence in India. They are interested.

If the buzz in India's telecom industry is any indication, and if investment bankers are to be believed, the telecom sector in the country is set to enter a period that will see global private equity majors and multinational telcos striving to establish a presence, the first by acquiring stakes in Indian telcos, and the second by either acquiring Indian telcos whole or in part, or starting operations afresh. The names being thrown around include Vodafone, Deutsche Telekom, NTT DoCoMo, afk Sistema of Russia, Alpha Telecom of the uk, Egypt's Orascom, and China Telecom. Nor are the private equity firms being spoken of any less celebrated. Carlyle is one. Goldman Sachs-its reps were in India in April scouting for a deal-is another. "I have been meeting a number of international investors and everyone is looking at India," says Vikram Mehmi, CEO, Idea Cellular, whose firm is already 47.7 per cent owned by foreign investors, Singapore Technologies Telemedia (STT) and Telecom Malyasia International (TMI). The only other telcos with a significant foreign stake are Hutch (Hutchison Whampoa owns 42.34 per cent) and Bharti (SingTel owns 27 per cent and private equity firm Warburg Pincus 5.74 per cent).

The trigger for this interest is the government's decision, in February 2005, to raise the ceiling on foreign direct investment in telcos from 49 per cent to 74 per cent (since 1991, it has been 100 per cent in firms manufacturing telecom equipment). But why would multinational telcos and private equity firms be interested in India? Well, for starters, India is the second-fastest-growing mobile market in the world (adding 1.5-2 million subscribers every month; the fastest-growing is China, which adds 4.5 million on a larger base). Then, although India is the fifth-largest market in the world for mobile telephony services (with 54 million subscribers) currently, it will soon be the second-largest (with 200 million subscribers), just behind China, which boasts 340 million mobile customers. The average revenue per user (ARPU) may be declining, but the market remains attractive from the growth and volumes point of view. Finally, Indian telcos need money to roll out fresh telecom networks (all told, they may need to invest Rs 70,000 crore, over $15 billion within the next two years). "I am not sure banks can fund this much," says Idea's Mehmi. With internal accruals barely adequate to fund operating expenses, Indian telcos will have to try and raise at least half this amount by selling stake to multinational telcos, financial investors and the investing public (through initial public offerings).

It will be a second coming for most multinational telcos. Most entered India in the early 1990s and exited it in the latter half of the decade, sure that a stifling regulatory environment would kill the market. Bell South, Swisscom, Millicom, Vodafone, BT, Telecom Italia, the list of exits is a veritable who's who of telecom. "They all misjudged the market and ran," says T.V. Ramachandran, Director General, Cellular Operators Association of India.

THE 74 PER CENT EFFECT

Idea's Mehmi: 74 per cent is good, but it is still on paper The government has announced its decision to increase the ceiling on FDI in telcos from 49 per cent to 74 per cent, but the money isn't pouring in. For instance, the STT-TMI combine's plans to invest $390 million (Rs 1,716 crore) in Idea Cellular has been stuck because of the rider that no company can hold more than 10 per cent stake in two companies operating in the same circle. Temasek owns 100 per cent of STT and holds a 65 per cent stake in SingTel that, in turn, has a 27 per cent stake in Bharti Tele-Ventures. And Bharti and Idea compete in eight circles. What will also stand in the way of investments are the stiff riders the government has proposed to placate its political bedfellows, the communist parties. One involves barring remote access to foreign equipment manufacturers for any maintenance/repair of networks; another insists that the chairman, CEO, CTO, MD and CFO of the telco should be resident Indians. Not surprisingly, the new policy is yet to be notified although it was announced three months ago.

SELLING OUT?

Spice's Modi (top) and BPL's Chandrasekhar: Prime targets The telecom sector is already talking of two mega deals, one involving BPL Mobile, the other, Spice Telecom. With the dispute between patriarch T.P.G. Nambiar and his son-in-law Rajiv Chandrasekhar over the ownership of BPL's telecom businesses getting a temporary reprieve (a court recently rejected Nambiar's plea against any sell-off in the telecom businesses), a cash-strapped Chandrasekhar is close to inking a deal with a "long-term strategic investor". He is said to be in discussions with Essar, STT, Vodafone and Sistema to offload up to a 49 per cent stake in the holding company, BPL Cellular Holdings or in its two subsidiaries, BPL Mobile Communications and BPL Mobile Cellular. To clear the way, Chandrasekhar is believed to be talking to his estranged foreign shareholders-Actis, AIG, Nomura-TVG and ADB-for buying out their stake and in turn sell them off to the "strategic investor". In Spice Telecom, investment banking sources say, Essar is interested in buying out the stake of foreign partners Distacom, AIG and Darby. The B.K. Modi Group, the Indian partner of Spice, has termed the Essar move a hostile bid, and has procured a stay from the Delhi High Court. Expect some high-octane drama surrounding telecom deals in the coming days.

Today, there are two routes open to foreign telcos looking to enter the market. One, they can acquire operators who are willing to sell out and then build a national presence gradually. Two, they can apply for fresh licences. The problem with the second approach is that there isn't too much spectrum going. That, though, hasn't stopped Atlas Interactive, a mid-sized international telco that offers mobile telephony services in countries like Romania, from applying for a licence for 12 circles. "We would be focussed on offering 3g services and not plain vanilla voice services," says Abhishek Verma, the company's Chairman.

Companies like Vodafone, however, would rather not comment. "We will not be able to comment on the Indian market. But what I can say is that our expansion is currently focussed on Eastern and Central European markets," says Ben Padovan, a spokesperson for the company. Only in March Vodafone shelled out $4.4 billion (Rs 19,360 crore) to buy out mobile telephony companies in Romania and the Czech Republic. India's turn will surely come.

Dog-fight Ahead
Equipment vendors are preparing to slug it out.

Nokia CEO Jorma Ollila (right) and the company's entire board were in India again in early May, just another indication of the country's importance

The media-brouhaha over Air-India's $6.9-billion (Rs 30,360-crore) deal with Boeing, and subsequent charges by Airbus that all wasn't kosher with the selection process, must have made some players in India's telecom markets smile. In the next 22 to 31 months, Indian telcos will burn around Rs 70,000 crore on network equipment alone. A substantial chunk of this spending will be done by state-owned monoliths BSNL and MTNL; the first recently announced that it would soon invite tenders for 40 million lines, mostly for 3g networks and the second has already asked for bids for four million 3g lines. Together, that's business worth Rs 20,000 crore and as Vineet Nigam, an analyst who tracks the telecom business at credit rating firm ICRA sees it, "is just the kind of news equipment vendors have been waiting to hear".

Ericsson (CEO Carl-Henric Svanberg is seen at right) started manufacturing some network equipment in its plant in Jaipur in March 2005

With the Chinese telecom frenzy cooling off (the country has 340 million mobile and 316 million fixed telephony connections), India could well be the market to be for vendors such as Ericsson, Nokia, Siemens, Alcatel, Lucent, Motorola, Huawei and ZTE. The competition promises to be intense and companies will have to indulge in some lobbying (especially for contracts from the state-owned firms), play the price card-competitors allege that the two Chinese companies Huawei and ZTE have already won some orders from BSNL by slashing prices to the bone-and try and develop unique products for the Indian market. C.S. Rao, the CEO of Lucent Technologies India, the market leader in the CDMA space on the strength of its deal with Reliance Infocomm, insists that the company will do everything it can "to sustain our share at least 50 per cent in the face of increasing competition that these figures will provoke".

The price factor will become even more important as telcos expand in smaller cities and rural areas where they need to maintain low cost of operations should they wish to be profitable. Nortel, says Rajan Mehta, a vice president with the company, is developing low-cost networks for rural areas in countries such as India. "India is the key battleground for equipment- and service-providers to prove that they can manufacture low-cost equipment," adds Sanjay Gopal, Partner, Accenture, a consulting firm. Motorola, for instance, is working on solutions that use low-capacity, low-cost switches. "The operating expenses for service providers will be more in the hinterland and we have to provide them with cost-effective solutions," explains Parmindra Kwatra, Country Head and Director of the company's infrastructure business.

With telcos accounting for 30 per cent of all handsets sold (they buy them from manufacturers and bundle them along with a connection for sale to customers), there will be significant activity on the handset front as well. Manufacturers will strive to strike deals with operators offering substantial discounts, even co-branded phones. The emphasis on low-cost products, both phones and equipment, is one reason why vendors are investing in local manufacturing facilities. The great Indian telecom revolution may yet help the country become a hardware-manufacturing powerhouse. That would be an adventitious benefit.

The Unconnected Hinterland
India's tele-density may double by 2007, but it won't help rural folk.

Increasing rural tele-density will require not only different products, but maybe an entirely different business model

India's telcos have had it easy. Parlaying the mobile mania that has gripped large parts of urban and semi-urban India into a unique selling proposition for a service that you don't really know you need till you have it (then, of course, it becomes indispensable) they have, at least some of them, built huge subscriber bases. In some metros, the tele-density is as high as 40 per cent.

Growing at the same pace will not be easy in the future. The telcos will have to look for growth in rural areas with a tele-density less than 1 per cent. The companies themselves and the vendors who supply equipment to them are confident that they can operate in an environment that entails high investment and low profits.

That won't be easy. Connecting rural areas is an expensive proposition, as is maintaining rural networks. And while micro-finance initiatives may provide a way out, as they are for fast moving consumer goods companies such as Hindustan Lever Limited, increasing tele-density in rural areas will require an entirely different set of products, maybe an entirely new business model. And all efforts to connect rural areas will be on the wireless platform (it costs less and can be rolled out quickly). "It is a market that no player can afford to ignore," says Sanjay Gopal, Partner, Accenture. That would explain why companies are developing low-cost handsets and network solutions for rural areas.

Despite the obvious benefits that connectivity will bring to rural areas-apart from economic gains it will help the cause of e-governance, telemedicine and education-it is unlikely that the map on page 97 will change colours anytime soon. For one, it may still be a better economic option for telcos to strive for incremental growth in the metros and large cities than target rural areas. For another, they may realise that it is much more profitable for them to focus on offering value-added services to existing high-end customers. Rural tele-density will increase (as it should), but not anytime soon.

Who's better? Who's best?
India's telcos, who they are, where they operate, how many customers they serve, and other related info.

Aircel Cellular: Two circles, Chennai and TN, 1.7 million subscribers. Mobile telephony (GSM). The company has been in play for some time. Russia's Sistema has been mentioned as a possible buyer.
PROMOTER/MANAGEMENT: C. Sivasankaran

Bharti Tele-Ventures: 23 circles, 11.4 million subscribers.
Mobile telephony (GSM); Fixed-line; Broadband; National and international long distance telephony. India's largest private sector telco, and the most profitable.
PROMOTER/MANAGEMENT: The Mittal family

BPL Mobile & BPL Cellular: Four circles, Mumbai, Maharashtra, Tamil Nadu, Kerala, 2 million subscribers. Mobile Telephony (GSM). Once one of India's leading telcos, it has since fallen on hard times.
PROMOTER/MANAGEMENT: Rajeev Chandrasekhar

BSNL: 21 circles (all India, barring Mumbai and Delhi), 43.8 million subscribers. Fixed line; Mobile telephony (on GSM; planning CDMA-platform services too); Broadband; National long-distance telephony; International long-distance telephony (has licence). Government owned and the fastest growing telco.
PROMOTER/MANAGEMENT: Govt.-owned/ A.K. Sinha, CMD

HFCL Infotel: One circle (Punjab), 225,000 subscribers. Fixed and mobile telephony (CDMA).
PROMOTER/MANAGEMENT: Mahendra Nahata, Vinay Maloo

Hutchison Essar: 13 circles (predominantly present in the metros and the northern part of the country), 7.6 million subscribers. Mobile telephony (GSM). Pure-play mobile telephony company that boasts the highest average revenues per user.
PROMOTER/MANAGEMENT: Hutchison Whampoa/Essar

Idea Cellular: Eight circles, three more to be added this year, currently in Maharashtra, Gujarat, Andhra Pradesh, Kerala, Haryana, UP (West), MP and Delhi, 5.15 million subscribers. Mobile telephony (GSM). Another pure-play mobile telephony player; a slow starter.
PROMOTER/MANAGEMENT: A.V. Birla Group, Tata Group, STT-TMI combine

MTNL: Two circles (Delhi and Mumbai), 5.1 million subscribers. Fixed line; Mobile telephony (GSM and CDMA). Like BSNL, state-owned and very profitable.
PROMOTER/MANAGEMENT: Govt.-owned/ R.S.P. Sinha, CMD

Reliance Infocomm: 21 circles (almost all India barring Assam and North-East), 10.6 million subscribers. Fixed and mobile telephony (CDMA); National and international long distance services; Broadband. The company that changed the rules of the game by successfully lobbying for fixed telephony licence holders to be allowed to offer mobile telephony services using the CDMA platform.
PROMOTER/MANAGEMENT: The Ambanis

Reliance Telecom: Seven Circles, North East India, Assam, Orissa, Bihar, Himachal Pradesh, West Bengal, Andaman & Nicobar and Madhya Pradesh, 1.1 million subscribers. Mobile telephony (GSM). Reliance's first entry into the Indian telecom space; fairly unsuccessful.
PROMOTER/MANAGEMENT: The Ambanis

Spice Telecom: Two circles, Punjab and Karnataka, 1.4 million subscribers. Mobile telephony (GSM). B.K, Modi runs Punjab, partner Distacom runs Karnataka.
PROMOTER/MANAGEMENT: B.K. Modi, Distacom

Tata Teleservices: 20 circles (all India except Andaman & Nicobar, J&K and North-East), 4 million subscribers. Fixed and mobile telephony (CDMA); National long distance telephony (international long distance telephony through another Tata Group company, VSNL); Broadband. A slow starter, it has recently moved into overdrive with aggressive network expansion and marketing campaigns.
PROMOTER/MANAGEMENT: The Tata Group