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Indian Telecom Industry - Microeconomic Perspective

CONTENTS

1. Acknowledgement
2. Introduction
a. Overview of the Industry
b. Timeline of the Indian Telecom Market
3. Market Structure: Present Scenario and Competitive Environment
a. Barriers to Entry in a telecom market
b. Overview of Market Structure and Evolution
c. Universal Service Obligation
d. Competitive Profile of the Telecom Sector
e. License Conditions Inhibiting Competition
f. Spectrum Assignment and Pricing
g. Interconnection Charges
h. Tariffs for Basic Service
i. Features of Indian Telecom Tariffs
j. Issues with Present Tariff Structure
4. Microeconomic Analysis
a. Demand and Supply
b. Costs
c. Basic Economic Cost Concepts
d. Concept of Costs used for determining prices
e. Pricing Methodologies
5. Issues Raised
a. Critical analysis of various pricing methodologies
b. Predatory Pricing and Vertical Price Squeeze – An overview
6. Conclusion
7. References

Acknowledgement

We would like to take this opportunity to thank our instructor, Dr. Rasananda Panda, for giving us an opportunity to explore the Pricing Strategies of Indian Telecom Operators.

It was a learning experience in more than one ways. Not only did we gain valuable economic insight, the project was also a lesson in the importance of teamwork and time management.

We would also like to thank KEIC for their co-operation during information research.

Thank you.

Aakash Srivastava
Sachin Lele
Shipra Rawat

PGPCM – 2005-07

Introduction

Overview and Introduction

It was in 1856 that the first telegraphic network was set up in India. Its initial use was during the First War of Independence the following year. For many years, therefore, the development of telecommunications was driven by military and governmental concerns, rather than consumer issues or commercial factors. This has changed somewhat over the past few years following the implementation of forward-looking liberalization policies.

Until the 1980s, the Department of Posts and...