Future Of Indian Telecom

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Future Trends in Indian Telecom

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Future Of Indian Telecom

  1. 1. Birds Eye View Beyond Voice: Future of Indian Telecom Compiled ByAegis LeadCap Research and Consulting Aegis LeadCap Research and Consulting
  2. 2. Executive Summary India is 2nd largest telecom players among emerging economies with 800 millionmobile subscribers. Almost 100 million Indians have access to internet with 40%among them accessing internet via mobile phones. The numbers are predicted to gothree times higher by 2015. India’s mobile handset market is expected to grow by25 % in volume this year to reach. India telecom revenues is primarily driven by voice which constitutes to 90% of totalrevenues leaving only a smaller portion for data. Aegis LeadCap Research &Consulting predicts that in next 5 years share of revenue from voice will reducedown to 60% from its current state of 90%. Most prominent value add services whichdrives data revenues include games, location based services, video calls, mobileadverts, music and mobile TV. It is also estimated that value added services in Indiawill generate Rs 55,000 Cr by 2015. Aegis LeadCap Research and Consulting
  3. 3. Introduction India is the 2nd largest among emerging telecom economies with a subscriber base close to 800 million. In spite of the dynamic growth of the user base, the declining ARPU is a great opportunity for Indian mobile service providers. Revenue from voice on mobile phone will perform the same way as the revenue from the landline currently while the revenuefrom data mobile data is key to the growth. Aegis LeadCap Research & Consulting predicts that in next 5 years the share of revenue from voice will reduce down to 60% from its current state of 90%. The revenue from data will witness steep rise similar to the developed markets like Europe having data revenues of close to 50% and still increasing. With Advance features like video calling, full length music track downloads, mobile internet, mobile tv, email&faxes with attachment,mms has truly change the way of communication. Aegis LeadCap Research and Consulting
  4. 4. Continued..Social networking has outspokenly become the new age media forcommunication with 30 million users in India. 60% of the total 700Mn globaluser base is captured by Face book , where other players like LinkedIn,MySpace & many more amount to 40%.Mobile banking is commonly used service in Urban India. Currently 43 Millionurban Indians are using this service. Cell phone has been more than a cellphone for years, but soon it could take on an entirely new role — standing in forall of the credit and debit cards crammed into wallets.Mobile TV is also emerging as a key service driven by its mass market appealand intuitive usage. 60% of TV users will prefer watching the same content onthe mobile. It is predicted that there will be 12 million subscribers by end of2011 India.Industry estimates that 8 billion mobile apps were downloaded in 2010 and 44billion mobile apps would be downloaded by 2016. Thus the mobile phone isnow much more than just a communication device - more like remote controlfor your life. Aegis LeadCap Research and Consulting
  5. 5. Scope Indian Telecom- Voice and Data Revenue Mobile Value Added Services – The Game ChangerComparison of Indian telecom with other telecom geographiesChallenges and OpportunitiesForecastRecommendations Aegis LeadCap Research and Consulting
  6. 6. Indian Telecom 5th largest telecom network in the world. 2nd largest among emerging economies. The total wireless subscriber base stood at 791 million on 31st March 2011. The number of Broadband connections on 31st March 2010 was 8.77 million compared to 6.22 million as on 31st March 2009. The gross revenue of the industry for the year 2009-10 was 31.5Bn$ which is about 3.7% increase over the last year. Bharti Airtel and Vodafone are the leading operators in India with Rs.1,57760Mn and Rs. 86,5062.56Mn as on Dec 2010. Source: TRAI.gov.in Aegis LeadCap Research and Consulting
  7. 7. Voice and Data MinutesSource: National Regulators/ITU/Operators Aegis LeadCap Research and Consulting
  8. 8. International Data Revenue Aegis LeadCap Research and Consulting
  9. 9. Challenges and Opportunities Challenges OpportunitiesHow to bring Fortune at the bottom of the Data MonetizationPyramid?Data Traffic Growth is Faster Than Compensation with Data ServicesRevenue.Declining of ARPU Designing Low energy/renewable powerRegulatory Issues New Government /Private investmentsTelecom PowerUnderstanding Customer Preference onVASInadequate Infrastructure Aegis LeadCap Research and Consulting
  10. 10. Mobile Value Added Services Aegis LeadCap Research and Consulting
  11. 11. Mobile Internet There are 100 million Internet Users in India and 40 Million Internet Users in INDIA access through their mobile phones. BWA spectrum in India has generated Rs. 1.06 trillion for the Government Exchequer. 300 Million Users in India by 2015. 24 Million Rural Internet Users by Dec-2011. Total Mobile Broadband Users in India as on 7 March 2011 are 11.21Million. The total investment related to mobile broadband services is expected to be of Rs 500 billion for 2010-15. Source: Google India and Ericssion India,2011 Aegis LeadCap Research and Consulting
  12. 12. Social Networking It is the fastest mode of communicating news, like recently when President of USA announced the death of Osama Bin Laden, 15 minutes later there were over 6 Million tweets & thousands of blogs. Total Social Media users in India are about 30.3Million, where Indian web users spend three hours per month on social sites. Total Face book users in India crossed 25 Million as at 30th April 2011 with a revenue of 1.8Bn$ revenue. 60% of the total 700Mn global user base is captured by Face book , where other players like LinkedIn, MySpace & many more amount to 40%. Forecast of Face book- 3Bn$ by end of 2011. Operators Revenue is increasing with more usage of bytes. Source: www.dreamgrow.com and Economic Times Aegis LeadCap Research and Consulting
  13. 13. Video Calling Today’s 3G/IP video calling application platforms enables the most advanced interactive, premium rate 3G Video Chat and Social Networking services. Video will be using major portion of Future Data Band Width(66%) Mobile Video Traffic will double every year between 2010 – 2015. Global Mobile Video Calling Revenue to surpass $1 Billion by 2015. Source: CISCO Global Mobile Traffic Data,2010 Aegis LeadCap Research and Consulting
  14. 14. Mobile TV Mobile TV is emerging as a key service driven by its mass market appeal and intuitive usage. Surveys have found 40–60% of European mobile phone users to be interested in receiving TV on their mobile phone paying 8-12 Euros per month. The penetration of mobile phones is 50% more than TV. TV Broadcasting will be replaced by Mobile TV pages in near future. 60% of TV users will prefer watching the same content on the mobile. It is predicted that there will be 12 Million subscribers by end of 2011 India. Source: www.pwc.com/india & social media.com Aegis LeadCap Research and Consulting
  15. 15. Continued..Reliance, TATA Docomo, Vodafone, MTNL are providing Mobile TV services on 3G Phone.Bharti Airtel and Tata Tele Services are launching mobile TV.Vodafone gives access close to 75 unique channels @ Rs 3/Day for one channel and Rs.150 per month for all Channels.LOOP Mobile in conjunction with Mumbai IPL Team has started telecasting IPL at the cost of Rs 5/day. Aegis LeadCap Research and Consulting
  16. 16. Mobile Device I -phone and I- pads are the real game changers. Both have increased the data usage in a significant manner. I- Pad has captured 8% of the total PC market, So as the Samsung galaxy tab sales are very high. I –phone demands high quality content like high definition pictures, videos and graphics. The data download has doubled after the entry of tablets. Source: www.pwc.com/india,TOI Aegis LeadCap Research and Consulting
  17. 17. Continued.. Your mobile is now much more than just a communication device - more like remote control for your life. smart Phones and 3G Tablets. Spice will launch devices in the range of Rs 5,000 to Rs 10,000,with Android apps. Samsung launches thinnest 4G Smartphone, infuse 4G. Reliance Info Tel is coming up with a affordable 4G Tablet worth Rs8000-Rs10000 for their new mobile broadband service. Low cost tablet-pc is offered by Ministry of HRD, India. Aegis LeadCap Research and Consulting
  18. 18. Apps 2 million mobile applications available globally under various categories such as communications, games, productivity, etc. Nokia Ovi Store attracts 5 million downloads a day, 40,000 apps available in Ovi Store recently launched Pocket Parrot interpreter in your pocket with on-the-go translation tools. Alcatel-Lucent introduced a touch screen Android phone priced at $129 on a pay-as-you-go contractSource: www.penn-olson.com Aegis LeadCap Research and Consulting
  19. 19. Continued.. A report released by ABI Research estimates that 44 billion mobile apps would be downloaded by 2016. This might seem enormous -- 8 billion mobile apps were downloaded in 2010, according to ABI -- but entrepreneurs and venture capitalists in Silicon Valley feel it is a gross under estimation. 3,300 Android powered mobile devices were sold daily (in 2010). That figure is expected to go up to 10,000 in 2011. Aegis LeadCap Research and Consulting
  20. 20. Mobile Content User Generated Content:3. Pictures4. Graphics5. Videos Organization Generated Content9. Infotainment: UTV Bloomberg, NDTV10. Entertainment:Balaji Tele Films11. Education: AEGIS launched first online MBA program on 3G Tablet.12. Health: Fortis, Apollo Hospitals Aegis LeadCap Research and Consulting
  21. 21. Continued.. Forecasts of this market to reach $4.9 billion in 2015. User Generated Content is majorly responsible for Data traffic. Mobile music is the most demanded entertainment service by the Indian consumers with ring back tones. Vodafone offers subscription-based music streaming services for INR 50 per month ($1.09), with 40,000 songs, and 30 music channels in nine languages. Ovi Store is focusing on providing localized content to users and offers Indian users with a choice of 3.5 million tracks. Gaming on mobile phones, such as Zapak, ibibo,and India games launching mobile based gaming platforms providing users access to multiple games. Aegis LeadCap Research and Consulting
  22. 22. Mobile Money Mobile bank then is simple - the phone becomes the branch and this model is thus very appealing to new financial serviceproviders looking to get to market rapidly without the burden ofphysical infrastructure investments.  Cell phone has become a more than a cell phone for years, But soon it could take an entirely new-role- standing in for Credit & debit cards crimmed into wallets. Source: www.pwc.com/india,TOI Aegis LeadCap Research and Consulting
  23. 23. Mobile Bank 43 Million urban Indians are using this services. ICICI 17.75 Million users, HDFC 9.1 Million users & SBI 6.13 Million users. Usage Unique Uses in Millions Used mobile banking 43.70 Checking A/c balance 39.97 View Last 3 transaction 28.15 Status of Cheque 21.06 Payment Reminder 20.92 Request Cheque Book 19.11 Aegis LeadCap Research and Consulting
  24. 24. Forecast- Mobile Bank  Mobile Banking penetration.  Push information Services.  Mobile Bill Presentment & payment (MBPP).  Nokia places chips in cell phones allowing Citi debit & credit to make payments by waving the cell phone at stores. Source: Juniper Research ,2011 Aegis LeadCap Research and Consulting
  25. 25. Forecast Mobile VAS market to generate over RS 55,000 Cr by 2015 – PWC. Internet in rural India is set to rise by 98 per cent to touch 24 million in December 2011- IAMAI. India’s mobile handset market is expected to grow by 25 % in volume this year to reach 210 million units- Cyber Media Research. India expects revenue of about 130 billion rupees ($2.9 billion) from the sale of bandwidth to telecom companies next financial year. Aegis LeadCap Research and Consulting
  26. 26. Citations Teltech report from PWC Consultancy TRAI Annual Report 2010 KPMG Telecom Report Juniper Research-2011 Mobile Broad Band Outlook -2015-PWC Google India and Ericsson India,2011 Telecom India –Online www.penn- olson.com report 2011 and Social Med CISCO Global Mobile Traffic Data,2010 www.Dream Grow and Economic Times National Regulators/ITU/Operators:2011 Contact: Mr. V. P. Chandan, Director, Aegis vpchandan@aegis.edu.in Vidyadhar Prabhudesai Ashutosh Pandey Purushotham Srinivasa Lead Consultant- Lead Cap Ventures ashutosh.p@aegis.edu.in purushotham.s@aegis.edu.in vidyadharp@leadcap.net +91 9769831145 +91 9769831157 +91 7738043885 Aegis LeadCap Research and Consulting
  27. 27. AnnexureGeneration Definition Throughput Technology 1st Ana log 14.4kbps AMPS,NMT,TACS Digital Narrowband based 2nd 14.4kbps TDMA,GSM,CDMA on circuit data 171.2kbps(peak) 2.5 Packet Data GPRS 20-40kbps CDMA2000, 1XRTT, Digital Broadband Packet 3.1Mbps(peak) 3 EVDO, Data 500-700kbps UMTS, EDGE Upto 3.6 to 7.2Mbps(peak) 3.5 >2Mbps HSPA 14.4Mbps(peak) 1-3 Mbps Digital Broadband Packet 100-300Mbps(peak) WiMax, LTE 4 Data all IP Based very high throughput 3-5Mbps,100+Mbps(Wi-Fi) Wi-Fi(Metro) Aegis LeadCap Research and Consulting
  28. 28. Technical Overview Imp Parameters 3G 4G Driven by Voice driven data was add on Converged data & voice Frequency Band 2.1GHz 2.3-2.4GHz FEC Turbo Codes Concatenated Codes 3 to 5Mbps but potential estimate of Data Throughput 3.1Mbps 100-300Mbps Services & Apps CDMA 2000,UMTS,EDGE etc Wimax,LTE & Wi-Fi Analogy Standard TV HDTV Bandwidth 5-20MHz 5-20MHz Hybrid-Integration of W-LAN, Wi-Fi, N/W architecture Wide area cell based Bluetooth, Wide area VoIP Switching design Circuit & packet Packetized voice & data OFDMA,MC-CDMA/VSF-OFCDM and VSF- Access tech W-CDMA,1xRTT,Edge CDMA IP Protocol -IP4.0 Protocol -IPv6 RAN Latency Between 50ms-100ms Less than 10ms Aegis LeadCap Research and Consulting
  29. 29. Data Technologies Aegis LeadCap Research and Consulting
  30. 30. DisclaimerThis publication has been prepared for general guidance on matter of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty is given as to the accuracy or completeness of the information contained in publication and to the extent permitted by law, Aegis Consulting and Research wing of Aegis School of Business, its member, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequence of you or anyone else acting , or refraining to act on the information contained in this publication or for any decision based on it.© October 2010 by Aegis School of Business and Telecommunication. All rights reserved. Unauthorized use of the material without written permission is strictly prohibited and leads to legal action. Aegis LeadCap Research and Consulting

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