Indian Telecom Industry-A brief

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Indian Telecom Industry-A brief

  1. 1. Indian Telecom Industry An Overview
  2. 2. The Agriculture The Retail The education The Medication The Entrepreneurs' The Y Generation The overall impact of Telecom in India….
  3. 3. <ul><li>World’s fastest Growing Telecom Market - 8 Million plus subscriber addition per month </li></ul><ul><li>Third largest in the world after China and US- soon to overtake US </li></ul><ul><li>581.81 Million subscribers as on January-10 registering a growth rate of 3.49%. </li></ul><ul><li>Overall Tele-density in India reaches 49.50. </li></ul><ul><li>Fastest sale of a million mobile phones – 1 Week </li></ul><ul><li>World’s cheapest mobile handset made in India – US$17.2. Reliance plans web enabled phone at $12. </li></ul><ul><li>World’s Most affordable color phone made in India – US$27.42 </li></ul><ul><li>Total Broadband subscriber is 8.03 million in January-10, with a growth of 2.42%. </li></ul>
  4. 4. <ul><li>Lowest tariff but highest profitability. </li></ul><ul><li>Lowest Call Rates in the World at 2-3 US Cents, Declining ARPU, even then Rs 275 per month for GSM </li></ul><ul><li>India ranks highest in Mobile monthly Minutes of Usages per subscriber in Asia Pacific Region and second to USA in the world….500 minutes per month </li></ul><ul><li>Innovative approach of doing business at lowest operation costs. </li></ul><ul><li>Innovative value added concepts…missed calls, rural applications, lowest prepaid charge of 2.5 cents. </li></ul>
  5. 5. <ul><li>Divided into 23 circles </li></ul><ul><ul><li>4 metros </li></ul></ul><ul><ul><li>19 circles </li></ul></ul><ul><ul><ul><li>Further divided into A, B and C category based on economic parameters and revenue potential </li></ul></ul></ul><ul><li>Each circle has a licenses </li></ul><ul><ul><li>Licenses are saleable </li></ul></ul>Source :COAI METRO Circles C Circles B Circles A Circles Gujarat Rajasthan Maharashtra Orissa Andhra Pradesh Karnataka Tamil Nadu Kerala Madhya Pradesh Uttar Pradesh E Bihar West Bengal Punjab Himachal Pradesh Haryana Jammu & Kashmir Uttar Pradesh W CHENNAI MUMBAI DELHI KOLKATA North Eastern States
  6. 6. FDI in telecom recently revised to 74%. Government gets 15% of revenues from Unified Licensing Ministry of Communication & Information Technology Licensor Dept of Telecom Regulator Telecom Regulatory Authority of India Judiciary Telecom Dispute Settlement Appellate Tribunal Unified License Operators Fixed Line Operators National Long Distance Operators International Long Distance Operators Wireless Operators CDMA 1800Mhz GSM 900 & 1800
  7. 7. <ul><li>Broad guidelines of the National Telecom Policy 1999 </li></ul><ul><ul><li>License fees on revenue sharing basis </li></ul></ul><ul><ul><li>Achieved a 7% teledensity by 2005 and Targeting 15% by 2010 </li></ul></ul><ul><ul><ul><li>Rural teledensity targeted at 4% by 2010 </li></ul></ul></ul><ul><ul><li>Calling Party Pays (CPP) regime </li></ul></ul><ul><ul><li>Incoming calls free </li></ul></ul><ul><ul><li>Outgoing calls - multi-level tariffs </li></ul></ul>
  8. 8. <ul><li>Subscriber growth in Indian telecom has largely been driven by voice services </li></ul><ul><ul><li>SMS is the most popular data service </li></ul></ul><ul><ul><li>Internet is catching on in popularity driven by broadband players </li></ul></ul><ul><li>As per the TRAI consulting papers, data is likely to be the growth driver in future </li></ul><ul><ul><li>Rural telephony is expected to be driven by data than voice </li></ul></ul><ul><ul><ul><li>Data services would provide essential services like education and healthcare </li></ul></ul></ul><ul><ul><ul><li>But primarily demand would be driven by growth in the rural economy </li></ul></ul></ul><ul><li>BSNL (state owned incumbent operator) has fibre connectivity to most Country towns </li></ul><ul><ul><ul><ul><li>and fibre has almost infinite bandwidth capacity </li></ul></ul></ul></ul><ul><ul><li>85% of villages within 15-20 Km radius of these taluka towns </li></ul></ul><ul><ul><ul><ul><li>In India, typically 300 villages in 30 Km radius </li></ul></ul></ul></ul>
  9. 9. Key focuses of the days <ul><li>Technology/Connectivity </li></ul><ul><li>Business Model </li></ul><ul><li>Organization focused on rural markets </li></ul>
  10. 10. India fortunately has fibre which reach most towns; and most villages are located within 15 to 20 Kms of such towns. A wireless hub at the town with a wireless range of 20 Kms, can provide connectivity to most of these villages. The wireless technologies today is inexpensive and new developments is enabling higher and higher bit-rate connectivity with time for each village. <ul><li>wireless systems can connect most of these villages </li></ul><ul><ul><li>wireless technologies are continuously evolving </li></ul></ul><ul><ul><li>Telecom Subscription Data as on 31st January 2010 </li></ul></ul><ul><ul><li>Total Telephone subscriber base reaches 581.81 Million </li></ul></ul><ul><ul><li>o Wireless subscription reaches 545.05 Million </li></ul></ul><ul><ul><li>o Wireline subscription declines to 36.76 </li></ul></ul><ul><ul><li>19.90 Million new additions in wireless </li></ul></ul><ul><ul><li>o Wireline subscription declines by 0.31 Million </li></ul></ul>
  11. 11. <ul><li>CorDECT Wireless in Local Loop </li></ul><ul><ul><ul><ul><li>provides a telephone line and 35/70 kbps Internet connection in a 30 Km radius </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Exchange and tower in town </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Power requirement: 1 KW </li></ul></ul></ul></ul><ul><ul><ul><ul><li>start-up costs very low ($ 200 per line) </li></ul></ul></ul></ul><ul><li>VSAT Technology </li></ul><ul><ul><ul><ul><li>Satellite connectivity </li></ul></ul></ul></ul><ul><ul><ul><ul><li>provides a shared 128 kbps connection </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Start up costs are high ($3200 per connection) </li></ul></ul></ul></ul>
  12. 12. <ul><li>Entrepreneur-driven operator assisted telephone booths (STD PCOs) introduced in India in 1987 </li></ul><ul><ul><li>Today in urban areas: </li></ul></ul><ul><ul><ul><li>950,000 + such PCOs covering every street of smallest town </li></ul></ul></ul><ul><ul><ul><li>generate 25 % of total telecom income </li></ul></ul></ul><ul><ul><ul><li>300+ million people use these PCOs </li></ul></ul></ul><ul><li>Lessons for Rural Connectivity </li></ul><ul><ul><li>To serve the telecom needs of rural people with incomes < $ 1 per day, aggregate demand and allow an entrepreneur to run it. </li></ul></ul><ul><li>Business Model </li></ul><ul><ul><li>Aggregate demand to a village internet centre to provide voice/computer and internet services </li></ul></ul><ul><ul><li>Allow a local village entrepreneur to run it </li></ul></ul><ul><ul><li>Create an organization to provide the connectivity and content linkages </li></ul></ul>
  13. 13. <ul><li>Communications and broadcasting are converging together. </li></ul><ul><li>TV is being used for internet and voice and likewise mobile is being used for anything. </li></ul><ul><li>Terrestrial TV, cable TV, CAS and now DTH, further moving to digitalization. </li></ul><ul><li>IPTV, Mobile TV going to change lives and the way we think traditionally. </li></ul><ul><li>Indian Telecom most innovative….hello tones, Ring back tones, missed call, maximum music download, mobile in hand a fashion not elsewhere in world. </li></ul><ul><li>Today experts talk of open innovation centered around customer services and developed as inter operable platforms. </li></ul><ul><li>The path to innovation…. E.g.. Apple computer to Home ,IPOD Digital Music player to I Phone- multimedia hand phone with camera, internet, music player, WIFI </li></ul><ul><li>A group of Google, Intel, Dell, HP and Microsoft collectively formed the White Space Coalition and delivered to FCC two WIFI devices that operates in this spectrum without interfering with high-definition TV. </li></ul>
  14. 14. <ul><li>Declining revenues make it hard to justify the large capital investments made in the recent past </li></ul><ul><li>Market suspicion of large corporations will hinder the raising of new capital </li></ul><ul><li>Service providers are hesitant to invest in new opportunities that cannot provide immediate benefits </li></ul><ul><li>Data services not delivering on high expectations </li></ul><ul><li>Wireless spectral investments have crippled growth opportunities domestically as well as internationally </li></ul><ul><li>Network services and applications limp along as enterprises curb spending </li></ul><ul><li>Regulation continues to bandwidth hindrance to truly competitive markets and lower cost structures </li></ul>
  15. 15. <ul><li>Wireless revenues continue to increase as long distance revenues decline and local calling revenues stagnate </li></ul><ul><li>Globalization </li></ul><ul><ul><li>Long distance </li></ul></ul><ul><ul><li>Wireless </li></ul></ul><ul><li>Emergence of the “Total Communications Service Provider” </li></ul><ul><li>Convergence of </li></ul><ul><ul><li>Enterprise and telecom networks </li></ul></ul><ul><ul><li>Networks and applications </li></ul></ul>
  16. 16. Trailukya Dutta [email_address]

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