India Telecom Market Overview

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The presentation provides an overview of Indian Telecom Market. It provides historical data trends and current dynamics of the ecosystem. It has a detailed commentary on the spectrum allocation plan for India.

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  • Hi,

    Wish to have the presentation.

    Please mail it to akanshasareen11@gmail.com?
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  • Hi, this to be very good presentation
    could you mail it to hrrupesh@gmail.com
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  • Hello Mohit,
    Thank you for your Post, it is relay interesting , Now you can share your posts with more than 45,000 telecom pro world wide on TelecomYou! Community and jobs 'For Free' .
    Join now and share your knowledge : www.telecomyou.com ,and we will feature it as part of the week top content at home page and in the newsletter as well.

    if you have any question please feel free to contact me directly hk@telecomyou.com

    Best Regards
    TelecomYou! Team
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  • plz send me this to sailesh_sxc@yahoo.in
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India Telecom Market Overview

  1. 1. Nokia Internal Use OnlyNokia Internal Use Only Telecom Circle http://www.telecomcircle.com
  2. 2. Nokia Internal Use Only  2nd largest market after China in terms of number of subscribers  Indian mobile industry is reaching maturity where the new subscriber addition has slowed considerably  Reported subscriber base as of Dec’12 was 861 million but the real active base is much lower at around 650 million  The base dropped from 937 M in Mar’12 to 861 M in Dec’12  Fixed line subscription at 31 million which is shrinking every month. The rest of the presentation would focus on mobile industry as it is the most significant part of Telecom Industry
  3. 3. Nokia Internal Use Only  India is divided into 23 circles and separate licenses have been issued for each circle  Division of circles mostly along the state boundaries  Circles were categorized as Metros, A, B and C based on the revenue potential of the circle when 1st set of auctions were held in 1995
  4. 4. Nokia Internal Use Only 1994 Start of Cellular operations 1999 New Telecom Policy 2000-01 3rd/4th Operator Licenses 2003 CDMA networks launched 2004 Calling Party Pays (CPP) Introduced 2005 Lifetime Validity Products Issued 2008 Fresh Licenses issued to 6 players 2009 Tariff wars amongst operators 2010 3G, BWA auctions
  5. 5. Nokia Internal Use Only 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 CDMA - 6 10 17 41 57 84 95 20 25 20 GSM 10 22 37 59 10 17 25 41 54 64 65 - 100 200 300 400 500 600 700 800 900 1,000 CDMA GSM Source: COAI, AUSPI CDMA data has GSM numbers of Tata & Reliance from 2010 onwards Mobile Subscriber Base ( Million)
  6. 6. Nokia Internal Use Only 6 Total Urban Rural Source: TRAI • Significant disparity between Urban and Rural penetration • Different market dynamics for either side of market Mobile penetration (%) 1 3 7 12 20 33 36 39 22 39 56 75 107 139 160 143 7 13 20 30 45 62 73 71 0 20 40 60 80 100 120 140 160 180 2005 2006 2007 2008 2009 2010 2011 2012
  7. 7. Nokia Internal Use Only Operator Subscriber base (million) as of 31st Dec, 2012 BSNL 21.04 MTNL 3.46 Bharti Aitel 3.28 Reliance Communications 1.26 Tata Teleservices 1.49 HFCL 0.18 Others 0.08 All India 30.79 The fixed line subscriber base has dipped by 6 million in last three years Source: TRAI
  8. 8. Nokia Internal Use Only  Analysts estimated Indian Handset market size f0r 2012 between 190 – 210 million  Low cost handsets dominate with the average selling price of ~Rs 3200 ($55). However, with increasing penetration, the ASP has started to increase thereby reversing the trend  ASP increased by over 20% in last one year  Market is dominated by Nokia, Samsung and Indian brands like Micromax, Karbonn, etc  Share of CDMA in handsets is on a decline after the decision of Reliance and Tata to focus on GSM
  9. 9. Nokia Internal Use Only  India is the 3rd largest market for smartphones after US and China  Growth driven by  Consumer aspiration  Affordable due to falling prices and EMIs  Increasing Data consumption  India is the 1st country where the internet traffic from mobiles has exceeded the fixed line
  10. 10. Nokia Internal Use Only  As a result of separate licenses, there are few pan India operators. However, in the period 1999-2005, consolidation led to emergence of larger players  In 2007-08, new licenses were issued to new players taking total number of operators in each circle to as high as 13
  11. 11. Nokia Internal Use Only GSM  Bharti Airtel  Vodafone  Idea  BSNL/MTNL  Aircel  Reliance  Tata Docomo  Telenor  Loop  Stel*  Etisalat*  Reliance  Tata Indicom  MTS CDMA * Stel & Etisalat closed down their operations in 2012 due to license cancellation by supreme court post 2G controvery
  12. 12. Nokia Internal Use Only  India is currently the most competitive market in the world which has led to tariff wars $1 = Rs 60 Rs 1 = 100 p
  13. 13. Nokia Internal Use Only  Revenue growth has got impacted significantly  The break-even point for new operators has increased significantly  Increase in churn and Multiple SIM  It is estimated that only 50% of new subscriber addition is actually new subscribers. Rest all are either churning from one network to another or are adding to Multiple SIM phenomena
  14. 14. Nokia Internal Use Only 26% 44% 53% 63% 80% 73% 78% 86% 91% 93% 96% 96% 96% 96% 0% 20% 40% 60% 80% 100% 120% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Prepaid as % of Total Subscribers 99% of new subscriber additions are in prepaid Source: TRAI
  15. 15. Nokia Internal Use Only 1158 814 731 503 412 352 316 282 240 845 453 328 288 193 159 146 128 123 0 200 400 600 800 1000 1200 1400 2000 2001 2002 2003 2004 2005 2006 2007 2008 ARPU Cost/Sub GSM ARPU & Cost data (Rs)
  16. 16. Nokia Internal Use Only Revenue Break-up as % of Gross Revenues Source: TRAI report for Quarter ending Dec’12 Net Service Revenue = 78% of Gross Service Revenue Net Service Revenue = Gross Service Revenue – Interconnection Usage Costs – Outroaming Airtime Airtime, 5 2.1 SMS, 5.8 VAS, 14.3 Roaming, 9.0 Rental, 18. 8
  17. 17. Nokia Internal Use Only Source: PwC Benchmarking report - 2008 Network operating expenses proportion of costs increased from 36% in 2005 to 51% in 2008 51.0% 24.0% 8.0% 10.2% 6.8% As % of Total Costs Network Operating Costs Sales & Marketing Costs Personnel Costs 26.0 % 12.0% 4.0% 4.8% 3.2% As % of Net Rev
  18. 18. Nokia Internal Use Only 40.0% 11.0% 16.0% 9.0% 4.0% 20.0% Postpaid SMS CLI GPRS Ringtones & Ringback Tones 36.0 % 0.0% 5.0%30.0 % 5.0% 24.0 % Prepaid
  19. 19. Nokia Internal Use Only  Defense occupies chunk of spectrum and hence there is scarcity of spectrum leading to poor quality of service  New Telecom Policy, 2012  Policy announced but implementation is still unclear  2G licenses controversy  Licenses issued in 2007-09 have been challenged in the court due to undue favor to a few player  Licenses of new players were cancelled by the supreme court
  20. 20. Nokia Internal Use Only 450 470 698 862 • Known as 700 MHz band • Identified by WRC-07 for IMT • Entirely held by defense 824 844 869 889 • Known as 850 MHz band • Allocated to CDMA • Entire band available for mobile 890 902.5 915 935 947.5 960 • Known as 900 MHz Band • Allocated GSM • All available spectrum allocated to mobile services Paired With Paired With • Known as 450 UHF MHz Band • Currently used for Police & Security networks
  21. 21. Nokia Internal Use Only 1710 1785 1805 1880 • Known as 1800 MHz band • Allocated to GSM • Up to 80% spectrum is with defense Paired With • Known as US PCS band • CDMA operators have claimed this band but GSM operators oppose it due to interference • Defense has all the spectrum Paired With 1900 1910 1980 1990 1710 1785 1805 1880 • Known as 2.1 GHz band • Allocated to WCDMA • Defense currently has bulk of spectrum and is expected to vacate some Paired With
  22. 22. Nokia Internal Use Only 2300 2400 • Known as 2.3 GHz TDD band • Intended allocation for BWA • Known as 2.6 GHz band • Part intended allocation for BWA and part for mobile services • Currently entire band is with defense 2500 2690
  23. 23. Nokia Internal Use Only Visit Telecom Circle to read interesting articles on Telecom and Internet http://www.telecomcircle.com To download 1. India Subscriber Database – Circle-wise, operator-wise from year 2000 onwards 2. Circle-wise ARPU data for GSM networks 3. Case study on how Indian Carriers make 40% EBIDTA margins at 2 cents a minute Visit http://www.telecomcircle.com/2009/06/india-telecom/ Send your comments & feedback at mohit@telecomcircle.com

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