There has never been a better time to get a mobile phone connection. There are at least six, if not more, operators to choose from in every circle. In June this year, the convention of paying per minute of calling was broken when Tata DoCoMo started its pay-per-second facility, dramatically bringing down the cost of a call. “We made the fare fair,” quips Anil Sardana, managing director of Tata Teleservices (TTSL), the Indian partner of Tata DoCoMo.

Tata DoCoMo’s innovation was quickly followed by its rivals. Now, Sistema Shyam TeleServices (SSTL), under its brand MTS, is offering a half-paisa-per-second facility. Suddenly, the idea of calls being absolutely free doesn’t seem outlandish any more.

The flurry of offers and counter offers is just one effect of the bitter war that has broken out in the Rs 1,60,000-crore revenues Indian mobile telephony service market. The war is being fought between new entrants — Loop Telecom, Etisalat DB, Uninor and a few others — who have procured licences last year, and the old players — Airtel and Vodafone — who have dominated the field so far. “We anticipated the price war and we adapted our business plan for it,” says Sanjay Chandra, managing director of Unitech, which entered into a joint venture with Telenor to create Uninor.

The battle has been complicated by old CDMA players — Reliance Communications (RCom) and TTSL — offering GSM services aggressively. The sudden aggression of regional players — Aircel, for example — who want a national presence has increased the complication. “We are seeing a lot of flux,” says Atul Bindal, president, mobile services at Bharti Airtel, the undisputed leader in the market currently.

At one level, there is intense price cutting to woo customers. At another level, there is tremendous lobbying going on to corner scarce spectrum — the one commodity that differentiates a big player from a small player. Somewhere in between, questions on suitable technology, an old boys’ network in the primary telecom association and, finally, the intentions of Department of Telecommunications and the Telecom Regulatory Authority of India (Trai) are being raised.

The viciousness of the fight was apparent on the day the telecom regulator held an open house early December to discuss the spectrum allocation policy. The Cellular Operators Association of India (COAI), the body representing all the GSM service providers, was supposed to give its views. But as soon as T.R. Dua, COAI’s officiating director-general, got up to present his case, several new members of the association, led by Vinod Kumar Budhiraja, chief regulatory officer of Etisalat DB, said Dua did not represent them. “COAI does not represent the majority view,” said Budhiraja bluntly. He was backed by Anand Dalal, vice-president, corporate and regulatory services, TTSL, and N.K. Mangla, head of regulations of RCom. “COAI cannot be run by two companies with one or two other non-committed members,” argued Dalal. “We will fight to seek equality in spectrum,” vowed Mangla. As matters got heated, Trai chairman J.S. Sarma had to step in to soothe frayed tempers.

Lucrative Market
The battle is vicious because the prize is tempting. The Indian telecom market is the fastest- growing, globally. From 65 million subscribers in 2005, it grew to 146 million by end 2006, and then to 346 million by 2008. In the past few years, an average of 10 million subscribers were added per month. Since August 2009, 15 million new subscribers are getting added every month. Trai projects that India will have over 500 million subscribers by end December. (European Union-27 has only 600 million subscribers, says Sharifah Amirah, principal analyst for ICT, Frost & Sullivan, Europe. Only a million are added a month. The US adds only 2-3 million subscribers per month on a total base of 280 million. Even China adds only 7-8 million subscribers a month, though its subscriber base at 730 million is much bigger.)

Usage, too, is expected to go up. Currently, most people make only voice calls. But data transmission usage is picking up. Every player expects data usage and value-added services (such as ringtone downloads) to grow a lot.

It is not as if the Indian telecom market lacked competition earlier. Pre-2007, there were four to five players in each circle. Bharti Airtel and Vodafone Essar were national GSM players. RCom offered mobile services using the rival CDMA technology across most of India and GSM services in the North-east. TTSL had CDMA operations nationwide. Idea Cellular, managed by the Aditya Birla Group, had a GSM footprint in most states. Then there were strong regional players — Aircel, JT Mobile and Spice. Finally, there were the government-owned telecom companies — MTNL, in Delhi and Mumbai, and BSNL, which covered the rest of India.