Market Research Report : VoIP Market in India 2012


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Voice over Internet Protocol or VoIP is economically viable alternative to traditional telephony. It enables calls enhanced with various features which make it attractive at affordable cost. Enterprises and small & medium enterprises are rapidly embracing the solution in India and around the world. Mobile VoIP services on various mobile platform and software-based IP telephony are capturing general consumers’ attention as well. With rising number of mobile devices and falling call charges of VoIP products and services, adoption of the same in India is expected to grow tremendously in the coming years.

The report begins with ‘Introduction’ section covering overview regarding VoIP which provides basic idea of what is IP telephony, benefits of the technology and some key technical information. It also covers evolution of internet and VoIP in India.

The ‘Market Overview’ section elaborates global & domestic market state of VoIP. It is accompanied by a plethora of statistical information regarding VoIP in global scenario as well as in India such as global & domestic VoIP market size, revenue generated from VoIP services and other related information. The section also elaborates VoIP telephony services categories, service delivery setup, business model and Porter’s Five Forces analysis for the market.

It is followed by ‘Scope in India’ section which elaborates on salient features of VoIP recommendations as proposed to DoT, prevailing mandate by DoT, proposed revenue model for Phone-to-Phone through VoIP services, various scope areas and product verticals for VoIP in India. Specific product verticals have been highlighted with information regarding each of their market state and opportunity areas for VoIP. The section continues with Vendor Opportunity stressing on specific prospective areas for VoIP solutions. It also projects the state-wise broadband penetration scenario in India as in 2011.

The report continues with ‘Drivers & Challenges’ section elaborating the major furtherance & impediments for VoIP products and services in India. Both the ‘drivers’ and ’challenges’ are equally stressed upon to provide clear idea regarding the probable obstacles and rewards in the line of business and help vendors take necessary measures.

In the ‘Major VoIP Service Provider’ section the key VoIP companies are profiled. It provides information such as corporate & business highlights covering operational & recent information regarding each company’s contact information, location, key product and service offerings and key contacts. It also provides financial performance for a period of time including revenue and profit, key ratios, financial summary and key financial performance indicators. Key business segment and key geographic segment for each player are provided as well to provide further clear idea regarding the companies.

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Market Research Report : VoIP Market in India 2012

  1. 1. VoIP Market in IndiaFebruary 2012
  2. 2. Executive Summary Mobile VoIP market will evolve to reach the mark of INR x1 tr by 20-- - -- Market for speciality1 VoIP in India will cross x2 mn subscribers by 20- with a CAGR of x3% Market Also service1 market size will total INR x4 bn by 20--, with contribution of service2 of around INR x5 bn Global VoIP market is expected to generate a revenue of INR x6~ tr annually by 20-- Drivers: Challenges: Burgeoning Broadband Penetration Security Issues Associated with VoIP Drivers & Availability of 3G Network Inconsistent Internet Services Challenges Burgeoning PC Penetration Lack of Awareness Rising Mobile Device Adoption and Low Smartphone & Tablet Penetration Wireless Subscriber Base Increase in Disposable Income Trend1 Trends &Developments Trend2 Development1 Major Players Mahanagar Telephone Nigam Ltd. Sify Technologies Ltd. Tata Communications Ltd.Competition You Broadband & Cable India Vonage Holdings Corporation Microsoft Skype Ltd. VOIP MARKET IN INDIA 2012.PPT 2
  3. 3. •Introduction•Market Overview•Scope in India Vendor Opportunity•Drivers & Challenges•Major VoIP Service Providers Other VoIP Service Providers in India•Trends & Developments•Strategic Recommendations•Appendix VOIP MARKET IN INDIA 2012.PPT 3
  4. 4. IntroductionVoice over Internet Protocol (VoIP) Overview VoIP or Internet Telephony is a term denote the collection of technologies that utilizes the packet- switched connections of Internet to exchange voice data It uses the more efficient route of Internet to transmit voice after breaking them into numerous digital packets unlike Public Switched Telephone Network (PSTN) which use a dedicated line This technology allows numerous users to send information over the same line, providing a more efficient utilization of the telecommunications infrastructure Due to its effective line capacity and use of the Internet, additional features like call conferencing and roaming do not cost extra to the consumer • VoIP telephones and multimedia PCs convert analog voice signals into digital data streams • Telephone signals are routed over IP networks instead of over circuit-switched networks • A call path usually consists of contacting a target PC on the Internet or to connect to a standard telephone set via a gateway between the Internet and the PSTN • Original VoIP signaling standard was ISH H.323 but now most networks use Session Initiation Protocol (SIP) as a signaling standard • IP Telephones can be categorized in two segments, Hard and Soft phones Hard phones are hardware-based and a VoIP enabled telephone set is used for communication Soft phones are software-based and resides on desktops, laptops, tablets, handhelds, mobile phones or other computer platforms VOIP MARKET IN INDIA 2012.PPT 4
  5. 5. Market for product1 in India will cross z1 mn subscribers by20-- with a CAGR of z2%Market Overview – India• Market for consumer VoIP was a1 subscribers in 20-- and it is expected to grow at a CAGR of a2% till 20-- Product2 market will evolve to reach the mark of INR a3 tr by 20-- - --• Also product3 market size will total INR a4 bn by 20--, with contribution of product4 of around INR a5 bn Key driver in product5 will be management of product6 in India by 20-- - --• VoIP and product7 are becoming popular as they offer newer technologies at a predictable and considerable monthly cost• VoIP in India is yet to gain wide-scale acceptance, but its future prospects are high and significant adoption is predicted in the next z3 years with introduction of tech1 and tech2 in India Minutes of Usage – VoIP in India Quarterly Yearly Minutes mn (Quarterly) Minutes mn (Yearly) 200 192 1,750 159 161 154 1,500 150 137 1,250 129 133 133 132 132 112 121 115 112 118 120 123 1,000 102 1,613.7 750 100 89 1,002.6 500 347.4 478.0 509.2 250 50 0 Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sept Dec Mar Jun ’06 ’07 ’07 ’07 ’07 ’08 ’08 ’08 ’08 ’09 ’09 ’09 ’09 ’10 ’10 ’10 ’ 10 ’11 ’11 VOIP MARKET IN INDIA 2012.PPT 5
  6. 6. Porter’s Five Forces Analysis Impact Threat of New Entrants Medium • aaaaaaaaaaaaaaaaaaaaa • bbbbbbbbbbbbbbbbbbbbb • cccccccccccccccccccccccc • dddddddddddddddddddddd Impact Impact Impact Medium High Medium Bargaining Power of Suppliers Competitive Rivalry Bargaining Power of Buyers• aaaaaaaaaaaaaaaaaaaaa • aaaaaaaaaaaaaaaaaaaaa • aaaaaaaaaaaaaaaaaaaaa• bbbbbbbbbbbbbbbbbbbbb • bbbbbbbbbbbbbbbbbbbbb • bbbbbbbbbbbbbbbbbbbbb• cccccccccccccccccccccccc • cccccccccccccccccccccccc • cccccccccccccccccccccccc• dddddddddddddddddddddd • dddddddddddddddddddddd • dddddddddddddddddddddd Impact High Threat of Substitutes • aaaaaaaaaaaaaaaaaaaaa • bbbbbbbbbbbbbbbbbbbbb • cccccccccccccccccccccccc • dddddddddddddddddddddd VOIP MARKET IN INDIA 2012.PPT 6
  7. 7. Scope in India - Potential Verticals (-/-) • aaaaaaaaaa • bbbbbbbbb • ccccccccccc • ddddddddd • eeeeeeeeee • aaaaaaaaaa Vertical1 • bbbbbbbbb • ccccccccccc • aaaaaaaaaa Vertical2 • bbbbbbbbb • ccccccccccc • aaaaaaaaaa Vertical3 • bbbbbbbbb • ccccccccccc VOIP MARKET IN INDIA 2012.PPT 7
  8. 8. VoIP service providers can take advantage of aaa adoption trend, HDbbb and popularity of ccc appsVendor Opportunity (x/x) XXXXX • aaaaaa yyyyy • bbbbbb zzzzz • cccvccc VOIP MARKET IN INDIA 2012.PPT 8
  9. 9. Drivers & Challenges – Summary Drivers Burgeoning Broadband Penetration Challenges Availability of 3G Network Security Issues Associated with VoIP Cost Advantage Over Traditional Inconsistent Internet Services Calling Services Burgeoning PC Penetration Lack of Awareness Rising Mobile Device Adoption and Wireless Subscriber Base Low Smartphone & Tablet Penetration Soaring Enterprise Demand Increase in Disposable Income VOIP MARKET IN INDIA 2012.PPT 9
  10. 10. Major Public Companies - SummaryNet Profit/Loss3,000 Size of the Bubble represents Market Capitalization in INR bn2,5002,0001,5001,000 500 0 -500-1,000 -2,000 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 Total income xxx yyy zzz Note: All figures are in INR mn and are based on the latest financials available VOIP MARKET IN INDIA 2012.PPT 10
  11. 11. Public: Domestic Company – Company1 (-/-)Company Information Offices and Centres – India Adress line1Corporate Address Adress line2 City. CountryTel No. +91- --- - ----- JaipurFax No. ++91- --- - -----Website www.------.comYear of Incorporation 19--Ticker Symbol ------Stock Exchange Exchange1 Head OfficeProducts and ServicesCategory Products/Services Key PeopleCategory1 Product1, Product2, Product3 Name DesignationCategory2 Product1, Product2, Product3 Mr. X Designation1 Mr. Y Designation2 Mr. Z Designation3 VOIP MARKET IN INDIA 2012.PPT 11
  12. 12. Public: Domestic Company – Company1 (-/-)Financial Snapshot Key Ratios Total Income Net Profit/Loss y-o-y change Particulars 2011 2010 2009 2008 INR mn INR mn (2011-10) 4 d 4 Profitability Ratios a c Operating Margin -0.18 18.41% 18.59% 12.44% 11.35% b 3 3 Net Margin 0.17 16.42% 16.26% 12.02% 8.63% 2 Profit Before Tax Margin 0.39 19.39% 19.01% 14.88% 11.53% 2 Return on Equity -0.61 27.43% 28.05% 28.52% 29.53% 1 Return on Capital Employed -0.49 30.75% 31.24% 26.40% 35.72% 0 0 Return on Working Capital 5.08 40.66% 35.58% 32.79% 59.62% 2008 2009 2010 2011 Return on Assets 0.48 17.95% 17.47% 14.98% 13.36% Return on Fixed AssetsFinancial Summary -36.68 88.11% 124.79% 119.76% 108.85% Cost Ratios• The company incurred a net profit of INR xxx mn in FY 2011, Operating costs (% of Sales) 0.20 81.39% 81.19% 87.21% 88.60% as compared to net profit of INR xxx mn in FY 2010 Administration costs (% of -0.97 9.35% 10.32% 10.78% 13.50% Sales)• The company reported total income of INR zzz mn in FY 2011, Interest costs (% of Sales) -0.36 0.02% 0.38% 0.26% 0.10% as compared to total income of INR zzz mn in FY 2010 Liquidity Ratios• The company earned an operating margin of 18.41 per cent in Current Ratio -3.57% 2.28 2.36 2.11 1.44 FY 2011, a decrease of 0.18 percentage points over FY 2010 Cash Ratio -8.10% 0.82 0.89 0.63 0.42• The company reported debt to equity ratio of 0.53 in FY 2011, Leverage Ratios a decrease of 12.75 per cent over FY 2010 Debt to Equity Ratio -12.75% 0.53 0.61 0.90 1.21 Debt to Capital Ratio -100.00% 0.00 0.03 0.11 0.08Key Financial Performance Indicators Interest Coverage Ratio 1742.04% 914.14 49.63 49.66 116.68 Indicators Value (08/02/2012) Efficiency RatiosMarket Capitalization (INR mn) Fixed Asset Turnover -30.05% 5.31 7.59 9.69 12.55Total Enterprise Value (INR mn) Asset Turnover 1.79% 1.08 1.06 1.21 1.54 Current Asset Turnover 10.14% 1.37 1.25 1.39 2.10EPS (INR) Working Capital Turnover 13.22% 2.45 2.16 2.65 6.87PE Ratio (Absolute) Capital Employed Turnover -3.10% 1.65 1.71 2.31 3.40 Improved Decline VOIP MARKET IN INDIA 2012.PPT 12
  13. 13. Public: Domestic Company – Company1 (-/-)Key Business Segments Key Geographic Segments Product1 Product2 Product3 India Outside India100% 100%50% 50% 0% 0% 20-- 20-- 20-- 20-- 20-- 20-- 20-- 20--Key InformationDescription Details • aaaaaaaaaaOverview • bbbbbbbbb • ccccccccccc • aaaaaaaaaaExtended Product • bbbbbbbbbPortfolio • ccccccccccc VOIP MARKET IN INDIA 2012.PPT 13
  14. 14. Other VoIP Service Providers in India (-/-) Company Name Corporate Address Contact No. Website aaaaaaaaaaaaaaaaaaaaa Company +91-80-12345678 bbbbbbbbbbbbbbbbbbbbb aaaaaaaaaaaaaaaaaaaaa Company +91-80-12345678 bbbbbbbbbbbbbbbbbbbbb aaaaaaaaaaaaaaaaaaaaa Company +91-80-12345678 bbbbbbbbbbbbbbbbbbbbb aaaaaaaaaaaaaaaaaaaaa Company +91-80-12345678 Bbbbbbbbbbbbbbbbbbbbb aaaaaaaaaaaaaaaaaaaaa Company +91-80-12345678 Bbbbbbbbbbbbbbbbbbbbb aaaaaaaaaaaaaaaaaaaaa Company +91-80-12345678 Bbbbbbbbbbbbbbbbbbbbb aaaaaaaaaaaaaaaaaaaaa Company +91-80-12345678 Bbbbbbbbbbbbbbbbbbbbb aaaaaaaaaaaaaaaaaaaaa Company +91-80-12345678 Bbbbbbbbbbbbbbbbbbbbb aaaaaaaaaaaaaaaaaaaaa Company +91-80-12345678 Bbbbbbbbbbbbbbbbbbbbb Note: List is not exhaustive VOIP MARKET IN INDIA 2012.PPT 14
  15. 15. Companies are coming up with feature1-based andproduct2 solutions in India and abroadKey Trends & Development (-/-) Trends & Developments Description • aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa Trend1 • bbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbb • ccccccccccccccccccccccccccccccccccccccccccccccccccccc • aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa Trend2 • bbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbb • ccccccccccccccccccccccccccccccccccccccccccccccccccccc • aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa Trend3 • bbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbbb • ccccccccccccccccccccccccccccccccccccccccccccccccccccc VOIP MARKET IN INDIA 2012.PPT 15
  16. 16. Strategic Recommendations (-/-) • aaaaaaaaaaaaaaaaaaaaa • bbbbbbbbbbbbbbbbbbbbb Strategic Recommendations1 • aaaaaaaaaa • bbbbbbbb • ccccccccc Strategic Recommendations2 • aaaaaaaaaa • bbbbbbbb • ccccccccc VOIP MARKET IN INDIA 2012.PPT 16
  17. 17. Appendix SAMPLERatio Calculations Ratio Calculations (Operating Current Assets / CurrentOperating Margin Current Ratio Income/Revenues)*100 LiabilitiesNet Margin (Net Profit / Revenues) *100 {(Cash & Bank Balance + Cash Ratio Marketable Securities) / Current (Income Before Tax / Revenues Liabilities)}Profit Before Tax Margin *100 Total Liabilities / Shareholders Debt to Equity (Net Income / Shareholders EquityReturn on Equity (ROE) Equity)*100 {Total Debt / (Shareholders Debt to Capital Ratio EBIT / (Total Assets – Current Equity + Total Debt)}Return on Capital (ROCE) Liabilities)*100 Interest Coverage Ratio EBIT / Interest Expense (Net Income / Working Capital)Return on Working Capital *100 Fixed Asset Turnover Sales / Fixed AssetsReturn on Assets (Net Income / Total Assets)*100 Asset Turnover Sales / Total AssetsReturn on Fixed Assets (Net Income / Fixed Assets) *100 (Operating Expenses / Sales) Current Asset Turnover Sales / Current AssetsOperating Costs (% of Sales) *100Administration Costs (% of (Administrative Expenses / Sales) Working Capital Turnover Sales / Working CapitalSales) *100Interest Costs (% of Sales) (Interest Expenses / Sales) *100 Capital Employed Turnover Sales / Shareholders Equity VOIP MARKET IN INDIA 2012.PPT 17
  18. 18. Thank you for the attentionThe VoIP Market in India report is a part of Research on India’s Telecommunications Series.For more detailed information or customized research requirements please contact:Kalyan BangaPhone: +91 33 4064 6215E-Mail: kalyan.banga@netscribes.comResearch on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quickinsights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries onAbout NetscribesNetscribes is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business &corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base.Netscribes is a one-stop shop designed to fulfil clients’ profitability and growth objectives.Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India, Netscribes (India) Pvt. Ltd.or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and priorpermission is required for guidelines on reproduction. VOIP MARKET IN INDIA 2012.PPT 18