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T R Dua C O A I

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Conference on Rural Telecom Markets by Tele.net

Conference on Rural Telecom Markets by Tele.net

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  • 1. 16 September 2009 Role of 3G in India T R Dua Deputy Director General, COAI 1
  • 2. CONTENTS  Indian Mobile Industry  3G- Ideal Solution for India - 3G Services - Economic Benefits - Market Drivers  Mobile Broadband for Rural India - Potential Applications  Making 3G Successful in Rural India - COAI Views - Affordable Access to Rural Areas  HSPA & WiMAX - HSPA Advantages - HSPA Specific Cases - WiMAX Characteristics  Conclusion 2
  • 3. INDIAN MOBILE INDUSTRY 3
  • 4. THE INDIAN MOBILE MAGIC “The transformation in telecommunications has accomplished what our socialist policies couldn't — empower the less fortunate”. …… Shashi Tharoor . Mobile has permeated almost every segment of the everyday life of citizens 4
  • 5. INDIAN MOBILE – CURRENT STATUS  157 operational networks  Investments around Rs. 150,000 crores  Mobile subscriber base of > 460 million, - Growing @ 10-12 million + every month  Lowest Mobile tariffs and one of the lowest ARPU (Average revenue Per User) in the world.  Highest MoU (Minutes of Use) globally  Rural subscriber base served by private GSM operators > 95 million by July 2009, - Growing @ around 3-4 million every month, i.e. nearly 50% of the GSM subscriber adds are from the rural areas Indian Mobile : Sustained Stupendous Growth 5
  • 6. WORLD’S 2nd LARGEST WIRELESS MARKET 450 415 400 350 347 300 Subs in mn 250 234 200 150 150 100 76 48 50 28 11 0 2002 2003 2004 2005 2006 2007 2008 Jun'09 Year ended December Highest subscriber additions globally !! Records tumbling month after month… 6
  • 7. THE IMPACT OF MOBILE PHONES IN INDIA - ICRIER RESEARCH FINDINGS  Telecommunications is a critical building block for the country’s economic development.  Access to communications needs to be seen as a foundation on which other initiatives can be built.  In under served areas, mobile phones can help to widen markets, create better information flows, lower transaction costs and substitute for costly physical transport  Small and medium sized enterprises (SMEs) and urban slums gain maximum benefits in enhancing their businesses through the use of mobile services. Amidst the spreading gloom of the economic downturn following the global financial meltdown, the Indian telecom sector provides the proverbial silver lining…………….”Dr. Rajiv Kumar, Director, ICRIER 7
  • 8. THE IMPACT OF MOBILE PHONES IN INDIA - ICRIER RESEARCH FINDINGS  Information via mobile, such as weather reports and market prices, has begun to have an impact on productivity for the agricultural sector.  Real benefits of telecommunications only start when a region passes a threshold penetration rate of about 25%. Many areas have still not attained that level, which indicates the importance of increasing teledensity as soon as possible.  Indian states with higher mobile penetration can be expected to grow faster, and by 1.2% points for every 10% increase in mobile penetration rate. These benefits are from 2G, with 3G – expected to increase several fold 8
  • 9. 3G- THE IDEAL SOLUTION FOR INDIA  Will serve as an ideal platform to deliver low cost voice telephony to Indian consumers  Extremely effective tool in driving penetration to the huge addressable market in the rural areas.  Increased economic opportunity through tele-education, tele- medicine, e-governance, etc.  Facilitate achievement of Government’s objectives on broadband  Cater to the demand for Hi-Speed data services in the urban markets  Will ease spectrum constraints on 2G networks & accommodate subscriber growth. 9
  • 10. BROADBAND STORY SO FAR Growth in Broadband Subscribers (in mn) 8 6.8 7 6.22 6 5 3.9 4 3 2.34 2 1.31 1 0.2 0 Mar' 05 Mar' 06 Mar' 07 Mar' 08 Mar'09 July'09 Source - TRAI FOR BROADBAND- MOBILE IS THE ANSWER 10
  • 11. GLOBAL TOP TEN MOBILE BROADBAND MARKETS Q3’08 The scenario to change significantly in the coming years. India and China combined share to reach 20% of the global mobile broadband Subs by the end of 2013. THE FUTURE OF BROADBAND IS IN THE EMERGING MARKETS Source: Informa Telecom & media estimate,2009 11
  • 12. MOBILE BROADBAND FOR RURAL INDIA  In rural India, fixed line broadband connectivity is very low;  Many will probably first experience broadband on mobile handsets  3G will bring in much needed broadband connectivity for rural India. Internet Broadband Wireless internet thru mobile 140  Key success factors for Mobile 120 117.8 Broadband 101.1 Subs in Millions 100 88.3  Wide spread reach of 80 76 mobile 60  Affordable access to PCs 40 11.7 20 12.2 12.9 13.5 4.4 4.9 5.5 6.2 0 June'08 Sept'08 Dec'08 Mar'09 IN RURAL INDIA, WHEN YOU THINK BROADBAND, THINK MOBILE BROADBAND Source: TRAI 12
  • 13. 3G SERVICES  High speed internet connectivity  Faster video/data downloads  New services like video telephony, video on demand, mobile TV & other entertainment related services  Rich Multi-media services with streaming audio and video like video conferencing  Online Gaming with more bandwidth, security, and reliability  Location based services  Personalized services, where content can be pushed to users VOICE was killer app on 2G CHOICE would be killer app on 3G 13
  • 14. 3G WILL THUS STIMULATE ECONOMIC ACTIVITY  Immediate value creation - GDP contribution from direct network investments  Multiplier effect - On suppliers of equipment, content, etc  Foreign Direct investments - as a result of good ICT infrastructure  Productivity increases - More efficient business processes  Human capital formation - Increase in knowledge and skills as well as improved health services Productivity gains to multiply with increased delivery of data services; upto 1.4% points for every 10% increase in mobile broadband* * Source - McKinsey 14
  • 15. MARKET DRIVERS FOR 3G IN INDIA  Address capacity problems in 2G networks For voice services in Spectrum limited situation Better end-user experience in terms of voice and data  Cost efficient mechanism for Mobile Broadband Optimized investment for affordable service Broadband where ever there is mobile – reach Would give significant impetus to overall internet penetration  3G – The big technology leap for Rural India Facilitate to meet USO services requirements Future proof investment in rural India Can be turned in to mass market service without wastage of investment Development of Regional Content  Augment GSM Infrastructure for WCDMA – low deployment cost  Availability of WCDMA handsets at reasonable price 15
  • 16. MOBILE BROADBAND FOR RURAL INDIA 16
  • 17. GROWTH IN RURAL MOBILE CONNECTIVITY 120 Pvt GSM rural subs (in mn) 100 91 95 87 76 80 80 69 72 60 40 20 0 Jan'09 Feb'09 Mar'09 Apr'09 May'09 Jun'09 Jul'09  > 50% of the new connections now outside urban areas…  95 mn rural subscribers as of July’09 served by Pvt GSM – Addition of >3 mn per month In future, maximum growth to come from Rural areas 17
  • 18. POTENTIAL APPLICATIONS  Telemedicine  Overcome the lack of doctors in rural areas.  Remove language barriers through Multi- lingual interfaces.  Bridge lack of visual examination through video capability.  Enable prescription service through document transfer.  Connectivity to super specialty hospitals & Healthcare medical institutions  Education  Provide high bandwidth access for e- education courses.  Provide video based Computer Based Trainings (CBTs).  Extensive use of web casting/ multi casting to educational institutions Education 18
  • 19. POTENTIAL APPLICATIONS  Governance  Provide government information like policies, forms, schemes.  Enhanced public services efficiency in areas like municipality, state electricity board, railways etc.  Better transparency Governance  Agriculture  Dissemination of agricultural information to the farmers; whether report, info on seeds etc.  Information on Market prices  Easier transaction through direct relationship with buyers.  Commodity information portal Agricultural News & Information 19
  • 20. POTENTIAL APPLICATIONS  E-commerce  E-Procurement for Wholesale (Mandi) and Retail  E-Banking  E-transactions for supply chain & payment  Entertainment E Commerce  Regional content - Audio & Video Downloads  Mobile TV - News etc. Entertainment With mobile broadband, these services will become richer and even more effective 20
  • 21. MOBILE BANKING FOR RURAL INDIA  85% of rural India is unbanked  Cost of funds – biggest deterrent for banks to move to rural areas Current Scenario Banking Future • Branch – $ 1.1- $ 1.3 BANK • ATM – $ 0.4 • Call Centre – $ 0.3 • Cheque – $ 0.02 TELCO Infrastructure • Internet – $ 0.08 + Secure Mobile Matchbox Technology Distribution  Mobile to provide affordable banking solution Low cost Banking Services Mobile Banking essential for Financial Inclusion 21
  • 22. MAKING 3G SUCCESSFUL IN RURAL INDIA 22
  • 23. COAI VIEWS  Subsidizing in rural areas  power supply / diesel  non-conventional energy sources  Improved utilization of USO Funds through innovative new forms of support for Rural connectivity.  Nominal & Transparent Right of Way (ROW) charges  Reduction of the burden of multiple levies and duties on the sector  It consists of-  Annual spectrum charges  License fee  USO levy  Octroi etc.  These charges needs to be rationalized. The total of all the above levies on telecom industry works out to approx. 30 percent of their total revenues 23
  • 24. COAI VIEWS Spectrum Requirement  Already spectrum in 900 MHz, 1800 MHz is much fragmented.  Limited spectrum available in 2.1 GHz for 3G.  Issues still needs to be resolved in 2.5-2.6 GHz band. India needs to consider new frequency bands (like 700 MHz) for the future growth of mobile/ mobile broadband services. 24
  • 25. COAI VIEWS Spectrum Requirement  700 MHz (698-806 MHz) band best suited for HSPA/ LTE applications.  This band especially relevant for India, as majority of future growth expected from rural India.  Because of its excellent signal propagation characteristics, less infrastructure is required to provide wider coverage  Communication services can be provided in rural areas at lower cost (savings in Capex)  Will help to bridge the ‘digital divide’ in India  Provide affordable mobile broadband to help develop a knowledge based economy. India needs to take a lead position in allocating this band to drive economies of scale 25
  • 26. Why 698-862 MHz band critical?  It is approximately 70% cheaper to provide mobile broadband coverage at frequencies (approx. 800MHz) than over 2100MHz  This means networks can be rolled out quickly, cost effectively, bringing cheaper services to consumers Number of base stations 14 X12 12 2 5 7 10 15 20 10 X7 8 X5 6 X3 4 X1.5 X1 2 0 700 850 2100 2600 3500 5800MHz Capex Multiple UHF Band Source: SCF Associates Study 26
  • 27. COAI VIEWS Affordability of Mobile Broadband  Reserve Price of 5MHz 3G spectrum set @ Rs. 3500 crores, 20MHz of WiMAX (BWA) spectrum set @ Rs. 1750 crores  Reserve Price of Rs. 3500 crores for 3G spectrum is very high– will affect business case – resulting in lower participation & making for less robust auction result  3G best placed technology to deliver on the Government’s mobile broadband objectives  High auction prices will impact the affordability of 3G and could completely derail the mobile broadband revolution for India Reserve price should be set at a level, to provide affordable broadband services 27
  • 28. COAI VIEWS Regional Content – A Priority  70% of India resides in the rural areas – language used to converse, transact & interact is the local language  There are 22 official languages in India  Applications useful to the local population will have to be developed to revitalize the rural economy by creating rural micro enterprises  These micro enterprises could be in the areas of agriculture, food processing industry, animal husbandry, fisheries, sericulture, handicrafts, etc.  With the availability of local language services and localized applications / content, the rural consumers will be far better equipped to accept and migrate to a mobile information society Service providers have already taken major initiatives and significant progress has been made in this direction. 28
  • 29. AFFORDABLE ACCESS FOR RURAL AREAS  Initiatives by industry to reach rural masses: – Lifetime prepaid – Micro prepaid cards – Innovative tariff plans, especially for rural areas – Low cost handsets Rural connectivity highest priority for Government as well as Operators 29 29
  • 30. AFFORDABLE ACCESS FOR RURAL AREAS  Initiatives by Government to reach rural masses: – USO Support for towers • 1st Phase: ~ 7,871 towers in 500 districts spread over 27 states for provision of mobile services in specified rural and remote areas, where there was no existing fixed wireless or mobile coverage • 2nd phase of USO initiated, broadband services also included – Guidelines on Infrastructure Sharing 30
  • 31. GOING FORWARD Mobile infrastructure has proved itself to be the most effective medium to deliver benefits of CONNECTIVITY to rural areas. Need to deliver more Technology-based Solutions to the Rural Masses while Overcoming many Inherent Constraints through Innovative Solutions Industry fully committed to work with Government to deliver benefits of Connectivity & Mobile Broadband to Rural India 31
  • 32. THE RACE FOR WIRELESS BROADBAND BEYOND 3G 32
  • 33. HSPA  HSPA is the set of technologies standardized by 3GPP3 that defines the migration path for UMTS operators worldwide. HSPA includes HSDPA (High Speed Downlink Packet Access), HSUPA (High Speed Uplink Packet Access) and HSPA Evolved . Wi MAX  It is defined as Worldwide Interoperability for Microwave Access (WiMAX) and is based on the IEEE 802.16 family of standards. Mobile WiMax could be a complementary technology. Both have been recognized by ITU as IMT Radio Interfaces 33
  • 34. SOME QUICK FACTS- HSPA  Commercial Deployments – 267 Operators in 114 Countries  Speeds – users are enjoying speeds of 1 Mbps & above  Performance improving rapidly – several networks now reaching peak rates of 14 Mbps  Huge range devices available – 1,470 HSPA devices from 171 vendors, with device types including embedded notebooks, handsets, smart phones, USB modems (dongles), datacards, wireless routers, wireless gateways  Usage is rising rapidly – HSPA operators across the world are reporting a surge in data traffic  Cost effective broadband for rural areas and emerging markets – operators are increasingly using HSPA to bring broadband services to communities beyond the reach of fixed networks 34
  • 35. SOME QUICK FACTS- HSPA  Uptake is accelerating – the number of HSPA connections is set to reach 180 million by the end of 2009 from over 88 million in January 2009 and 24 million at the end of 2007. By the end of 2012, HSPA connections worldwide are forecast to be over 900 million  Leverages the GSM family – HSPA builds on the successful GSM technical and commercial model, offering users secure network interoperability access and global roaming  Enjoys a high level of vendor support – the vast majority of the world’s mobile equipment vendors support HSPA technology and there is no one single dominant player, ensuring vigorous competition  Increasing speed – 21 Mbps through HSPA+ Release 7, while Release 8 will deliver peak bit rate of 42 Mbps Source - GSMA 35
  • 36. THE HSPA ADVANTAGE  Backward Compatibility  With Existing 3G/UMTS  Consistent with 3GPP standards.  Better Quality of Service assured  Reduced Latency  Short Transition time Interval  Reduced Response Time  Use of Harmonized Spectrum  Economies of scale  Seamless roaming  Inter-operability  Interference free operations  Excellent System Capacity  Doubles base station capacity of WCDMA.  Fast Link adaptation.  Fast hybrid Automatic Repeat Request. 36
  • 37. The HSPA ADVANTAGE  High Network Throughput Efficiency – Through fast Scheduling  Integration of voice with Data  Dynamic Allocation of bandwidth  High Bite Rate Transmissions  Ever-improving performance, with commercially-proven transmission bit-rates of up to 14Mbps today and up to 42 Mbps in the near future  LTE (Long Term Evolution) will deliver further enhancements in peak rates (exceeding 100Mbps)  Superior Coverage  Fewer Number of sites required.  Low Capex. 37
  • 38. HSPA: SPECIFIC CASES AT & T (formerly Cingular wireless) @ US  Deployed world’s first large scale HSDPA service.  Resulted in rapid growth in data ARPU.  Courtesy HSDPA – To become most successful mobile TV provider. Most successful – Launched live video share calling. Mobile TV Provider  Superior spectrum efficiency – Competitive pricing of data services.  Better coverage, especially in-building HSPA has proved itself in the most competitive US market 38
  • 39. HSPA: SPECIFIC CASES Telstra @ Australia  World’s largest national HSPA network. – Rolled out in just 10 months. – Reaching 98% of the population.  Peak network download speed boosted to 3.6 Mbps from 384 Kbps – with low latency. – Mobile TV. – Video Conferencing.  Even in the countryside, customers experience data rates in > 1 Mbps, while those closer to cell sites experience access Telstra leveraging the assets at over 2 Mbps. of existing 2G Infrastructure Brought broadband services to many remote communities for the first time. 39
  • 40. HSPA: SPECIFIC CASES MTN @ South Africa  MTN began testing HSDPA series in November’05 and in March’06 it became first operator in South Africa to launch commercial service, and the eleventh worldwide.  Courtesy HSDPA: – Fast and reliable Internet access to remote towns. – Offers to very poor community access to: • Voice Telephony services. Bringing Broadband to the masses • Cheap Internet services. – Broadband and computing to low-income townships. – Boosting education and health care. HSPA is delivering faster speeds to wider geographical area. 40
  • 41. HSPA: SPECIFIC CASES MobilKom @ Austria  Launched HSDPA in January 2006. – Delivering download speed of 1.8 Mbps  June 2006, 1st upgrade – Boosting speed up to 3.6 Mbps.  November 2006, presented first lightening fast HSUPA – Offers the highest currently available upload speeds. Austria’s HSDPA Network – Real time mobile video streaming. HSPA has provided a new way of working fast, reliably and cost effectively to the people of Austria 41
  • 42. HSPA offers a superior option due to: - Availability - Operationally proven superior coverage - Spectrum Efficiency - Economies of scale All technologies have ample scope to play their role. However, HSPA is expected to maintain & increase its major share of this market 42
  • 43. LONG TERM EVOLUTION  LTE is an all IP network based upon TCP/IP, with higher level services such as voice, video & messaging, built on top.  LTE has considerable flexibility, supporting channel bandwidths from 1.4 MHz to 20 MHz. - This optimises the use of radio spectrum by making use of new spectrum and refarmed spectrum opportunities.  Operators evolving to LTE from GSM/WCDMA/HSPA will maintain full backward compatibility with legacy networks.  LTE will have scalable channel bandwidths using OFDMA with both TDD and FDD operation. 43
  • 44. LTE BENEFITS  All IP nature of LTE means converged services will become a reality  It can deliver the massive capacity at a much reduced cost per bit.  Applications like High Definition (HD) video streaming, mobile gaming will be possible with LTE.  Low latency (below 10 ms) & higher Data throughputs. LTE is on track, attracting global industry support - 39 LTE network commitments have been made by 19 countries. 44
  • 45. COAI PROJECTIONS FOR THE FUTURE 1400 1200 1 bn 1000 800 Millions 600 400 200 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 Even @ 10% broadband subs, by 2013, there would be >100 mn broadband subs in the country. 45
  • 46. CONCLUSION GSM/3G/HSPA system with its established roadmap & proven capabilities forms an appealing ecosystem & is well positioned to succeed in mobile broadband. 3G is one of the most cost effective ways to deliver mobile broadband to the masses. Expectedly 3G can single-handedly achieve far more in terms of bridging the digital divide than any other technology 46
  • 47. trdua@coai.in Visit us at: www.coai.in 47

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