Connected by John Tysoe and Alan Knott-Craig

Author:John Tysoe and Alan Knott-Craig
Language: eng
Format: epub
Published: 2020-02-17T06:27:22+00:00

India

In several countries around the world, the first telephones were introduced by the British, in part to facilitate colonial administration. The British established the first phone network in India, with the formation of the Bombay Telephone Company in 1882. It still exists today, as Mahanagar Telephone Nigam Ltd.

After the British left, the phone system began to decay and by the end of the 1980s it was in a dire state. In 1994, the Indian Department of Telecommunications set a target of 10% penetration by the end of the decade and settled on a combination of mobile and fixed wireless, opting to use the GSM standard for the first and CDMA for the second. It invited private investors to bid for two licences to operate new mobile systems in each of four large urban areas, and the list of winners read like a who’s who of the world telecom industry – AirTouch, Bell Atlantic, BellSouth, France Telecom, Hutchison, Millicom, Mobile Systems International (MSI), Swisscom, Telekom Malaysia, Telstra from Australia, Vivendi, and CCI International, a subsidiary of Cellular Communications, AirTouch’s partner in certain US franchises.

The country’s first mobile network was launched in 1995 by RPG Cellular, a company controlled by an Indian conglomerate but in which Vodafone had a 20% interest. By this time, the government had begun the process of awarding licences for some of the more rural areas. Eventually, licences were granted in 23 regions and the industry began to grow.

In 1992 CK Hutchison had made an investment in an Indian partner to create Hutchison Max Telecom, which won a licence to operate a mobile service. This business expanded rapidly in the early 2000s until it had achieved full national coverage, at which point Hutchison sold the business to Vodafone.

By mid-2006 there were more than 100 million mobile connections, and the market was still growing at a phenomenal rate. By that time only five companies had significant shares of the market: Bharti Airtel, a publicly quoted subsidiary of Bharti Enterprises, enjoyed the number-one position with 23 million customers, just ahead of Reliance Communications with 22.5 million, and the state-owned Bharat Sanchar Nigam Limited with 21 million. Hutchison Essar was fourth with 17.5 million, while IDEA Cellular came in at just under 10.6 million.

By the end of 2007 Bharti accounted for more than 55 million of the country’s 235 million mobile subscribers, 15 million more than Vodafone India, the former Hutchison Essar and by now the nation’s second-largest player. By the end of 2010, when there were nearly 750 million mobile connections in India, Bharti had more than 150 million subscribers, 25 million more than its closest rivals, Vodafone and Reliance.

By March 2011 there were over 800 million mobile connections, and throughout the rest of that year and into 2012, the industry averaged 10 million new connections a month, raising penetration to over 75% and the market total to 923 million.

Then it started to unravel. It transpired that there had been some sort of fraud associated with the award of a

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