CHAPTER ΠII MOBILE PHONE SERVICE PROVIDERS REVIEW 2.pdfMOBILE PHONE SERVICE PROVIDERS REVIEW OF LITERATURE ... Laboratories introduced the idea of cell phone communications in ... Cellular mobile Service to

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    LITERATURE The Cellular telephone (commonly "mobile phone" or "cell phone" or "hand

    phone") is a long-range, portable electronic device used for mobile communication. Mobile phones have become an essential and important device for communication in the modern days. Mobile phone communication is a part of telecommunication, which comes in the form of oral communication. Mobile devices are growing in popularity with reduction in prices and improved functionality. Consumers prefer the flexibility and versatility of mobile phone devices. Mobile phone facilities easy and faster means of communication and one can communicate with family and friends and transact the business anywhere, anytime at a reasonable cost. In addition to telephony, modern mobile phones also support a wide variety of other services such as text messaging, MMS, email, Internet access, short-range wireless communications (infrared, Bluetooth), business applications, gaming and photography. Mobile phones that offer these more general computing capabilities are referred to as smartphones. India has the worlds second largest mobile phone users with over 903 million as of January 20122. 2.1 History of Mobile Phone

    Martin Cooper, a former general manager for the systems division at Motorola, is considered the inventor of the first modern portable handset. Bell Laboratories introduced the idea of cell phone communications in 1947 with the police car technology. However, Motorola was the first to incorporate the technology into a portable device that was designed for use outside an automobile. By 1977, AT&T and Bell Laboratories had constructed a prototype cellular system. A year later, public trials of the new system were started in Chicago with over 2000 trial customers. In 1979, in a separate venture, the first commercial cell phone system began its operation in Tokyo. In 1981, Motorola and American Radio Telephone started a second U.S. cell phone radio-telephone system test in the Washington / Baltimore area. By 1982, the slow-moving FCC finally authorized commercial cellular service for USA. A year later, the first American commercial analog cell 2. "Highlights of Telecom Subscription Data as on 31st December, 2011"

  • phone service or AMPS (Advanced Mobile Phone Service) was made available in Chicago by Ameritech. Despite the incredible demand, it took 37 years for cell phone services to become commercially available in the United States. Consumer demand quickly outstripped the 1982 system standards. By 1987, cell phone subscribers exceeded one million and the airways were crowded. 2.2 Mobile Generations 1G to 4G:

    First of all, these standards are set by the International Telecommunication Union (ITU). It is a specialized agency of the United Nations, founded in 1865, which is responsible for information and communication technologies. The ITU co-ordinates the shared global use of the radio spectrum, works to improve telecommunication infrastructure and establishes related worldwide telecommunication standards. 2.2.1 First Generation (1G):

    It all started with 1G, the first generation of wireless telephone technology and mobile telecommunications. Introduced sometime in the 1980s, 1G networks used analog signals, as opposed to digital signals used by all the successive generations of mobile technologies. In 1G network, voice calls were simply modulated to a higher frequency, typically to 150MHz and up. The first commercially available cellular network using 1G standard was introduced by NTT (Nippon Telegraph and Telephone) in 1979 in Japan. NTT is also a shareholder and technology provider for TATA DoCoMo in India. 2.2.2 Second Generation (2G):

    The second generation (2G) was commercially launched for the GSM standard in 1991 by Radiolinja, currently known as Elisa Oyj, in Finland. 2G allowed for enhanced data services and also introduced short messaging service (SMS). Since the introduction of 2G, voice communications were digitally encrypted. This allowed for greater privacy, efficient data transfer and also less expensive equipment. Two revisions or additions to this generation are sometimes referred to 2.5G and 2.75G. The combined introduction of GPRS (General Packet Radio Services) and the usage of CDMA one networks collectively came to be known as 2.5G. GPRS provided data transfer rates from 56-115kbit/s. So, services like WAP (Wireless Application Protocol) and MMS (Multimedia Messaging) were introduced, along with Internet services. 2.75G was the name given to the evolution of EDGE (Enhanced Data rates for GSM Evolution) or Enhanced GPRS (EGPRS). This was due to the introduction

  • of 8PSK encoding, which facilitated higher data transfer rates of up to 236.8kbits/s, almost triple of the previous rates. This is the most widely used generation of mobile telecommunication networks, and is what most mobile phones in India are now using. 2.2.3 Third Generation (3G):

    The third generation (3G) was introduced by NTT DoCoMo in Japan, in 2001. Although initially limited in scope, it was a leap forward. 3G used completely different radio frequencies from 2G, so it required different equipment to achieve the new high data transfer rates. Also, the enormous costs of additional spectrum licensing fees delayed the introduction of 3G in many countries. 3G data transfer rates are 384kbits/s to 2Mbits/s, so it allows for previously unavailable services like video calls, video conferencing, online conference call, mobile TV, online gaming etc. These speeds are broadband equivalent, so the applications and capabilities are enhanced greatly. Along with these services, 3G provides greater security and privacy. As with 2G, minor evolution of the standards resulted in 3.5G and 3.75G. Again, these standards allowed for higher data transfer rates, exceeding 2Mbits/s, reaching about 14Mbits/s. 2.2.4 Fourth Generation (4G):

    The next generation, 4G mobile phones are all set to provide data transfer rates of 100Mbit/s to 1Gbit/s, which is mind boggling, to say the least. Such speeds are not even present in wired networks commercially. 3G has just been launched in India and is available on select mobile operators for select cities. But to access these services, a 3G compatible mobile phone is required. 2.3 Top 10 Countries Mobile Phone Subscribers

    Mobile technology has very quickly become common among the people. There was times when an individual dreams of having his own mobile phone as it was expensive in the start. But as the world is getting advanced day by day, mobile and cell phones technology is now the most common department of the advance technology.

  • Table - 2.1 Top 10 Countries with the number of Mobile Phone Subscribers 2011

    Year - 2011 Mobile Phone Subscribers in million Users (%) China 896.2 67.1 India 840.28 70.23 United States 302.9 96 Russia 220.5 151.9 Brazil 215 110.5 Indonesia 168.2 73.1 Japan 107.4 84.1 Germany 107 130.1 Pakistan 105.1 63.2 Nigeria 90.5 64.7

    Source: users/

    The worldwide number of mobile phone subscribers surpass 5 billion in 2011 - up from 11 million in 1990 and 750 million in 2000. China leads the mobile phone subscribers list with nearly 900 million as at the end of 2011 - nearly as in the India. United States has seen tremendous growth in the last few years and is to be third place by the year-end 2011. Rapid expansion of cell phones in India will see a future climb in the rankings to a possible number one in 2010. Worldwide mobile phone subscribers are estimated to reach 5.9 billion by the end of the year 2013. 2.4 World Wide Market Share of Mobile Phones The global mobile phone industry is based on many different manufacturers and operators. The industry is based on advanced technology and many of the manufacturers are operating in different industries, where they use their technological skills, distribution network, market knowledge and brand name. Four large manufacturers of mobile phones are today dominating the global mobile phone industry & networks; Nokia, Sony Ericson, Samsung and LG. Airtel, BSNL, Tata teleservices, Vodafone, Reliance and others. In addition to these companies there are many manufacturers that operate globally and locally.

  • World wide market share of various mobile companies has been analysed by Gartner. Gartner is the worlds leading information technology research and advisory company. The results of the analysis are presented in the Table 2.2.

    Table - 2.2 World Wide Market Share of Mobile Phones between 2010 And 2011

    Company 2010 Market Share (%) 2011 Market

    Share (%) Nokia 111,473.7 30.3 97,869.3 22.8 Samsung 65,328.2 17.8 69,827.6 16.3 LG 29,366.7 8.0 24,420.8 5.7 Apple 8,743.0 2.4 19,628.8 4.6 ZTE 6,730.6 1.8 13,070.2 3.0 Research In Motion 11,628.8 3.2 12,652.3 3.0 HTC 5,908.8 1.6 11,016.1 2.6 Motorola 9,109.4 2.5 10,221.4 2.4 Huawei Device 5,276.4 1.4 9,026.1 2.1 Sony Ericsson 11,008.5 3.0 7,266.5 1.7 Others 103,412.6 28.1 153,662.1 35.8

    Total 367,986.7 100.0 428,661.2 100.0 Source: Gartner From the table 2.2, it is inferred that Nokia had the highest market share of

    30.3 per cent worldwide during the year 2010 and Samsung 17.8 per cent. During 2011, Apples expanded its market share to 4.6 per cent worldwide, and ZTE share increased to 3 per cent and other companies share increased to 35.8 per cent. The companies expect a greater increase in the near future in their market share. 2.5 History of Cellular Phones in India

    A report of Cellular Operators Authority of India regarding the entry of cell phones into India is listed below. This shows the improvement in cell phone introduction over the years. 1992 - Telecommunication Sector in India liberalized to bridge the gap through Government spending and to provide additional resources for the nations telecom target. Private Sector allowed participating. 1993 - The telecom industry gets an annual foreign investment Rs.20.6 million

  • 1994 - License for providing cellular mobile services granted by the government of India for the Metropolitan cites of Delhi, Mumbai, Kolkata & Chennai. Cellular mobile Service to be duopoly (i.e. not more than two cellular mobile operators could be licensed in each telecom circle), under a fixed license fee regime for 10 years. 1995 - 19 more telecom circles get mobile licenses 1995 (August) Kolkata became the first metro to have a cellular network 1997 - Telecom Regulatory Authority of India (TRAI) is set up 1998 - Annual foreign investment in telecom stands at Rs. 17,756.4 million 1999 - FDI inflow into telecom sector falls by almost 90% to Rs.2126.7 million 1999 - Tariff rebalancing exercise gets initiated 1999 (March) National Telecom Policy (NTP) is announced. 2000 (June) FDI inflow drops further down to Rs.918 million coming 2000 (January) Amendment of TRAI Act. 2000 - 01 3rd / 4th operator licences 2003 - CDMA networks launched 2004 - Calling Party Pays (CPP) introduced 2005 - Life time Validity products issued 2008 - Fresh licenses issued to 6 players. 2009 - Tariff wars amongst operators 2.6 Growth Trends of Mobile Phone Services

    The rapid growth and use of mobile phones has made the telecom companies like Airtel, Vodafone, Spice, BSNL, Tata, etc more conscious to provide world class and best facilities to their customers in order to maintain their market. Also, these telecom companies are coming up with new ideas and methodology to provide new and easy services to their customers.

    People in todays era are habitual of mobile phones and especially in metropolitan cities where people are well-connected with their friends and families through the mobile phones. All they want in their mobile phones is the best quality, economical in calling so that their talk with their love ones never ends and most importantly better connectivity and good service whenever they needed.

  • Table 2.3 Trends in Mobile Services

    Years Subscriber Base (in millions) Growth Rate (%) 2001-2002 13.00 263.13 2002-2003 33.58 158.31 2003-2004 50.00 48.90 2004-2005 76.00 52.00 2005-2006 149.50 96.71 2006-2007 165.11 10.44 2007-2008 261.07 58.12 2008-2009 391.76 50.06 2009-2010 584.32 49.15 2010-2011 811.59 38.89

    Mean 82.57 Source:

    The above table explains the growth of mobile phones in terms of subscriber base for the years 2001-2002 to 2010-2011. The trend in the growth rate of the subscriber base depicted an increasing trend over the years. The maximum growth of subscriber base was 263.13 percent during the year 2001-2002. It could also be said that mean growth rate of mobile phones in subscriber base was 82.57 percent during the period. Though the growth trend was fluctuating over the years, there was consistency in the growth of mobile phones subscriber base. 2.7 Mobile Subscribers Statistics in India Circle-Wise

    Telecom circles have been divided by the Telecommunications Department based on the subscribers available in each circle. The circle-wise mobile subscribers statistics in India is furnished in Table 2.4.

    Table 2.4 Circle wise subscribers in India During 2011

    Circle wise Subscriber base (in million) Andhra Pradesh 63.42 Assam 13.02 Bihar 57.56 Delhi 40.53

  • Gujarat 49.26 Himachal Pradesh 7.49 Haryana 21.27 Jammu & Kashmir 5.98 Karnataka 51.65 Kerala 33.09 Kolkata 23.69 Madhya Pradesh East 48.28 Maharashtra 65.56 Mumbai 36.99 North East 7.89 Orissa 24.06 Punjab 30.52 Rajasthan 45.05 Tamil Nadu 73.30 UP East 67.32 UP West 49.98 West Bengal 42.45 Total 858.36

    Source: The above table reveals that circle-wise subscriber base in India during 2011.

    Tamil Nadu circle has the highest number of subscribers nearly 73.30million, followed by UP East with 67.32 million and Maharashtra with 65.56 million of total mobile subscribers in India. 2.8 Growth of Mobile Subscribers in Tamil Nadu

    In Tamil Nadu, the mobile subscribers growth has increased drastically over the years. There are various players in the market using GSM, CDMA technology. Vodafone, Aircel, BSNL, and Airtel use GSM technology whereas Tata Teleservices and Reliance use CDMA technology. GSM technology has easy accessibility. The following table explains the subscribers to GSM and CDMA technology using various service providers.

  • Table 2.5 Growth of Mobile Phone Subscribers in Tamil Nadu 2011

    Operators Subscribers base (in millions) Vodafone (GSM) 10.9 Bharti Airtel (GSM) 12.6 Idea/Spice (GSM) 1.24 Aircel/ Dishnet (GSM) 19.5 Reliance (GSM) 3.9 Reliance (CDMA) 4.1 Tata (GSM) 3.7 Tata (CDMA) 1.1 BSNL(GSM) 7.9 BSNL (CDMA) 0.4 Sistema (CDMA) 1.4 Unitech (GSM) 1.3 Videocon (GSM) 1.5 Etisalat (GSM) 0.01

    All India 811.59 Source: DOT & service providers

    The above table describes that the growth of mobile subscribers in Tamil Nadu. Ai...