India telecom update 1 h 2010v0.1

India Wireless Market Update – 1H,2010 BP Tiwari bptiwari@beyond4g.org

SWOT India Mobile Market Strong mobile subscriber growth is S continuing, with the market benefiting from a healthy W Mobile market is still highly skewed competition. towards prepaid users; • Mobile Market has seen investment from Singapore’s SingTel, Vodafone of the UK, Telekom Malaysia, Norway’s •High Churn , low Prepaid ARPU and Duplicat SIMs Telenor, Etisalat of the United Arab Emirates, Japan’s NTT DoCoMo and Russia’s Sistema. •delayed policy implementation in a number of areas • Demand for mobile value-added services is strong and expected to grow. • Attractive Regulatory framework and Business environment for telecoms sector investors; the government The government will cut license fees by up T Government plans to increase spectrum O to 33% for those operators whose services usage charges for telecoms companies cover over 95% of the residential areas in a calling planning to offer 3G services could negatively affect the circle. 3G licensing process. •Possibility of allowing MVNOs •Price war is possible with competition •Large demand expected from content services and intensifying, while consolidation may not be a far-off mobile broadband services reality •Possibility to convert Prepaid users to Postpaid

SWOT India Broadband Market S W Broadband subscription growth is The market for fixed telephone lines is strong, with the market registering almost a 42% shrinking. increase in subscribers in 2009. • CAGR over 50% for next five year projected • Fixed-line market is dominated by state-owned operators BSNL and MTNL. In rural India, BSNL • Av ialability of BWA spectrum with 3 operators controls over 99% of the telephone infrastructure. to fuel mobile broadband adoption. • 85 % of the market is DSL in India T O Huge untapped market with only 2% of the population in India has broadband Fixed-line sector may decline at a more rapid rate penetration . • Allocation of BWA spectrum should fuel growth than envisaged, with potentially negative and adoption in India consequences for ADSL growth. • 4G Technology like WiMAX and LTE to play bigger role in bridging the gap of digital dividend. •Danger that the development of IPTV services will • Growing workforce, house hold disposable, and be hampered by high costs, low broadband usage per capita show high for broadband growth and slow speeds.

SWOT India Business Environment S India is now one of the biggest W recipients of foreign direct investment (FDI) Overall literacy rates in India among emerging markets. remain far lower than in Asian and other key emerging market nations. • Cost Effective skilled English-speaking • Lack of optimum Infrastructure force • Foreign investment protection , red tape • Growing Workforce, HouseHold and inflexible labour laws Income, Literacy ,GDP and per capita T Multinational Competation and O challenges from other countries like Enhance competitiveness of local bangladesh, Vietnam industry through further liberalization and deregulation •China as major competitor to FDI • Major opportunity lies in infrastructure , roads, railways and airports etc.

Subscription and Technology Forecast CDMA,GSM and W-CDMA Operators Market Share 1,600,000,000 100% Bharti 1,400,000,000 90% Reliance Communications 80% 1,200,000,000 Vodafone Essar 70% Subscriptions 1,000,000,000 Tata Teleservices 60% CDMA Idea Cellular 800,000,000 50% GSM BSNL 600,000,000 40% W-CDMA 30% Aircel 400,000,000 20% Unitech Wireless 200,000,000 10% Etisalat DB Telecom 0 0% Shyam 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Videocon Data Technology Split Operators Market Share in 2015 1,600,000,000 Unitech Etisalat DB Telecom Wireless Total 2% 3% 1,400,000,000 S Tel Videocon Aircel 1% 1% 1,200,000,000 7% 1xEV-DO Vodafone Essar Subscriptions 1,000,000,000 15% 1xEV-DO Rev A/B Bharti Tata Teleservices 800,000,000 18% 15% 1xRTT 600,000,000 GSM Reliance BSNL Communications HSPA 9% 15% 400,000,000 Idea Cellular 10% W-CDMA Shyam 200,000,000 2% 0 HFCL Infotel 2010 2011 2012 2013 2014 2015 0% Loop Mobile 1% MTNL 1%

Prepaid vs. Postpaid Composition – Comparing China, US and Japan India Japan 1,600 160 Millions Millions 1,400 140 1,200 120 1,000 Subscriptions 100 Subscriptions 800 Prepaid 80 Prepaid 600 Postpaid Postpaid 60 400 40 200 20 0 0 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 China US 1,400 450 Millions Millions 400 1,200 350 1,000 300 Subscriptions Subscriptions 800 250 Prepaid Prepaid 600 200 Postpaid Postpaid 150 400 100 200 50 0 0 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015

3G Market and Forecast MTNL BSNL 3G Uptake Technology /Forecast 1,600,000,000 MTNL/BSNL, 3G 1,400,000,000 2,000,000 1,800,000 1,200,000,000 1,600,000 W-CDMA 1,000,000,000 1,400,000 LTE 1,200,000 800,000,000 HSPA 1,000,000 GSM 600,000,000 800,000 3G Subscription 1xRTT 600,000 400,000,000 1xEV-DO Rev A/B 400,000 200,000,000 1xEV-DO 200,000 0 0 Sep Dec Mar Jun Sep Dec Mar Jun Dec Dec Dec Dec Dec Dec 2008 2008 2009 2009 2009 2009 2010 2010 2010 2011 2012 2013 2014 2015

Handset Market Share by Technology Handset Market Share in 2010 Forecast market share by 2015 Total 300,000,000 250,000,000 1xEV-DO 200,000,000 Handset Sales W-CDMA 1xEV-DO Rev A/B HSPA 1xRTT 150,000,000 GSM GPRS/EDGE GPRS/EDGE GSM 100,000,000 1xRTT HSPA 1xEV-DO Rev A/B W-CDMA 50,000,000 1xEV-DO 0 2010 2011 2012 2013 2014 2015

OS Market Share and Handset Manufacturers Smartphone OS Market Share Handset Manufacturers Market Share Research In Samsung iOS Motion Sony Ericsson 2% 1% Others 1% LG Android 6% 1% 1% 1% HTC RIM 7% 6% Apple Asus Microsoft HTC Windows Mobile LG 9% Nokia Others RIM Samsung Symbian 83% Sony Ericsson Nokia 82%

ARPU Trends and Forecast Voice APRU(-8.5% CAGR) Minute of Use (-2% CAGR) 300 500 250 400 200 Bharti Bharti 300 150 RCOM 200 RCOM 100 50 Idea 100 Idea 0 Average 0 Average Average Cost per Minute (-7% CAGR) 0.6 0.5 0.4 Bharti 0.3 RCOM 0.2 Idea 0.1 0 2010 2011 2012 2013 2014 2015

Wireline Broadband Landscape DSL covers over 80% of the market Household Broadband Penetration 40,000 Household Penetration of Consumer 35,000 Broadband Connections 30,000 12% 25,000 Other High-Speed 10% Cable Modem 20,000 8% DSL 15,000 FTTH/FTTP/Ethernet 6% Household Penetration of Consumer Broadband 10,000 Dial-Up Accounts 4% Connections 5,000 2% 0 0% 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014

Data ARPU Trends Personal Broadband Residential Broadband Dongle EV-DO Unlimited plans, fair usage policy 2500 3000 2000 2500 2000 1500 MTS BSNL INR INR 1500 1000 TATA TATA 1000 500 Reliance Reliance 500 0 0 5 GB 10 GB 20 GB 512 Kbps 1 Mbps 2 Mbps SME Broadband Unlimited ,Fair Usage , Static IP 10000 8000 6000 BSNL INR 4000 TATA 2000 Bharti 0 512 Kbps 1 Mbps 2 Mbps

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India telecom update 1 h 2010v0.1

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