Telecom Sector in India
Anjana Rao, Prachi Joshi, Puneet Taneja, Sandeep Sreenivasa
Business Environment Domain Study Pres...
Agenda
History, Facts
GoI, Regulatory Bodies
Spectrum Action
India Advantage
VAS
Industry Updates, Trends
Future Technolog...
History, Facts
GoI, Regulatory Bodies
Spectrum Action
India Advantage
VAS
Industry Updates
Future Technologies
Conclusion
...
History of Telecom in India- I
BE - Domain Study - Telecom 4
1851 1881 1883 1923 1932 1947
First Military Landline from
Fo...
History of Telecom in India- II
BE - Domain Study - Telecom 5
1985 1986 1995 1997 1999 2000 2009
DOT established separate
...
Quick Facts
BE - Domain Study - Telecom 6
Total telecom subscribers : 509 million (Sep 2009)
Wireless subscribers : 471.7 ...
Growing Numbers
BE - Domain Study - Telecom 7
9 10 11
15
20
32
43
Revenue(US$ billion)
Revenue(US$ billion)
Telecom Companies ?
BE - Domain Study - Telecom 8
Nokia,
Motorola,
Samsung,
LG,
Sony Ericson
Infinera, Cisco,
Alcatel Luce...
Market Share
BE - Domain Study - Telecom 9
As on 30th Sep ‘09
Net additions in Sep 09
Tata (26.74%) > Bharti (16.78%)
23%
...
Handset market
BE - Domain Study - Telecom 10
60%
8%
7%
6%
5% 15%
India
Nokia
Sony
Samsung
Motorola
LG
Others
37%
5%
22%
5...
Growth Avenues
BE - Domain Study - Telecom 11
Growth
Avenues
Enterprise
Telecom Services
Rural
Telephony
Value Added
Servi...
Urban-Rural Telephony
BE - Domain Study - Telecom 12
Urban India
Rural India
Population
Contribution
15-20%
72%
History, Introduction, Facts
GoI, Regulatory Bodies
Spectrum Action
India Advantage
VAS
Industry Updates
Future Technologi...
Strategic Flow
Clear
Policy
Cheap tariff
regime
Competition
So How all this happened?
 500 Mn Mobile and Wire line subscr...
TRAI functions
BE - Domain Study - Telecom 15
Consumer
Protection
Ensure Quality of Service
Ensure Affordable Tariff
Regul...
Agenda
History, Introduction, Facts
GoI, Regulatory Bodies
Spectrum Auction
India Advantage
VAS
Industry Updates
Future Te...
Spectrum Allocation
Need for Spectrum Allocation
• Spectrum auctions ensure the efficient use of spectrum by
allocating it...
Spectrum Allocation in India
o
o
Circles
• In India, telecom licences were auctioned
for basic and cellular services from ...
Agenda
History, Introduction, Facts
GoI, Regulatory Bodies
Spectrum Auction
India Advantage
VAS
Industry Updates
Future Te...
India’s Competitive Advantage
BE - Domain Study - Telecom 20
1. Fastest growing free market democracy
2. Cost advantage in...
Porter’s
Diamond Model
BE - Domain Study - Telecom 21
Factor Conditions
Related and supporting
industries
Demand condition...
FDI in Telecom Sector
BE - Domain Study - Telecom 22
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
116
129
680
521
1275....
Agenda
History, Introduction, Facts
GoI, Regulatory Bodies
Spectrum Auction
India Advantage
VAS (Value Added Services)
Ind...
VAS (Value Added Services)
SMS
VAS services, Bulk Messaging, B2B and B2C
Voice IVR
Mobile Radio, Voice chat, English Learn...
VAS offerings
BE - Domain Study - Telecom 25
VAS market in India
BE - Domain Study - Telecom 26
VAS: Not a form of basic service but adds value
to the total service of...
Present Segments
BE - Domain Study - Telecom 27
Population of India – 1,130 mn
Mobile Subscriber Base – 509 mn
GPRS Enable...
Why mobile VAS ?
Decrease in ARPU for telecom operators
Very low operating margins
Decreasing call rates: Lowest in the wo...
VAS value chain
Content Generators
Eg. Music Companies, Website
portals
Content Aggregators
Eg. Spice
Digital, Hungama.com...
Rural VAS
Only 12% tele-density in rural areas as compared to 72% in urban areas
Huge market potential
Sachet model of VAS...
Agenda
History, Introduction, Facts
GoI, Regulatory Bodies
Spectrum Auction
India Advantage
VAS
Industry Updates
Future Te...
Industry Updates
•Idea acquired 40.8% stake of Spice Communications at Rs 77.30 a share for Rs 2,716 crore. There
was a sh...
Bharti-MTN deal
To create a $61-billion
transnational telecom
goliath.
• Combined revenues
of $20 billion
• Over 200 milli...
India 3G Story
BE - Domain Study - Telecom
In India, 3G mainly for voice?
Indiatimes - Sep 8 2008
India 3G kicks off; but ...
• 3G – Rs 35 bn
• WiMax – Rs 17.5 bn
• EVDO – Rs 8.25 bn
Reserve Price
• 2-3 times the reserve prices - to total at
least ...
Agenda
History, Introduction, Facts
GoI, Regulatory Bodies
Spectrum Auction
India Advantage
VAS
Industry Updates
Future Te...
Mobile Number Portability(MNP)
BE - Domain Study - Telecom 37
The Inhibitors
Huge Costs Infrastructure Upgrade
Customer Re...
Mobile Virtual Network Operator
•Operator or company which does not own a licensed spectrum and
generally with out own net...
Wimax v/s 3G
BE - Domain Study - Telecom 39
3G WiMax Result
Spectrum Price To be auctioned DoT has
recommended
25% of rese...
Generations
BE - Domain Study - Telecom 40
2g
DATA RATE
14.4
3G
600KBPS TO
2MBPS
4G
10MBPS TO
20 MBPS
• Worldwide Interoperability for
Microwave Access
• IEEE 802.16e STANDARDS
• BROADBAND EVOLUTION
• Long term evolution
• 3...
Agenda
History, Introduction, Facts
GoI, Regulatory Bodies
Spectrum Auction
India Advantage
VAS
Industry Updates
Future Te...
SURFING AGAINST
BE - Domain Study - Telecom 43
Top Ten Challenges
 Sustenance of same EBITDA
 Competitive tariffs
 VAS ...
Road Ahead
BE - Domain Study - Telecom 44
720
510
271
140 165 96
604
661
36
91 25
71
54.4% 43.6% 88.4% 60.5% 86.6% 57.6%
C...
References
1. Trai – Quaterly Report (Nov 2009).
2. IBEF report 2007-08 : Telecommunication - MARKET & OPPORTUNITIES.
3. C...
Upcoming SlideShare
Loading in …5
×

Telecommunicationsector2 091120083645-phpapp02

1,346 views

Published on

Published in: Business, News & Politics
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,346
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
48
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • 􀂙 TELECOM SUBSCRIPTION IN INDIA CROSSES 500 MILLION MARK􀂙 Total Telephone subscriber base reaches 509 Milliono Wireless subscription reaches 471.7 Milliono Wireline subscription declines to 37.3 Million􀂙 14.98 Million new additions in Wireless􀂙 Wireline subscription declines by 0.02 Million􀂙 Overall Tele-density reaches 43.50􀂙 Broadband subscription is 7.21 million
  • Wireless-TT Info Service Limited (WTTIL)Quippo Telecom Infrastructure Limited (QTIL)
  • Hightlight the effect of Tata docomo’s per second billing.
  • In India market-share is completely different - than
  • http://en.wikipedia.org/wiki/List_of_countries_by_number_of_mobile_phones_in_use
  • Telecommunicationsector2 091120083645-phpapp02

    1. 1. Telecom Sector in India Anjana Rao, Prachi Joshi, Puneet Taneja, Sandeep Sreenivasa Business Environment Domain Study Presentation 20th Nov 2009 S. P. Jain Institute of Management & Research Post Graduate Program in Management Information Management 2009
    2. 2. Agenda History, Facts GoI, Regulatory Bodies Spectrum Action India Advantage VAS Industry Updates, Trends Future Technologies Conclusion BE - Domain Study - Telecom 2
    3. 3. History, Facts GoI, Regulatory Bodies Spectrum Action India Advantage VAS Industry Updates Future Technologies Conclusion BE - Domain Study - Telecom 3
    4. 4. History of Telecom in India- I BE - Domain Study - Telecom 4 1851 1881 1883 1923 1932 1947 First Military Landline from Fort William to Lalbazaar (Calcutta ) by the British Govt First Civil landline service introduced for the British Viceroy and his team Merger with the Postal service Merger of ETC &IRT to form (IRCC) Indian Radio Telegraph Cable Company Formation of Posts Telephone & Telegraphs under Ministry of Communication Formation of Indian Radio Telegraph Company (IRT)
    5. 5. History of Telecom in India- II BE - Domain Study - Telecom 5 1985 1986 1995 1997 1999 2000 2009 DOT established separate from Postal system DOT spilt into 3 : •MTNL (metros) •DOT (others) •VSNL (International) TRAI created (Telecom Regulatory Authority of India) DOT becomes a corporation = BSNL For 3 months in a row India beats China for the maximum subs added every month •Cellular service launched. •New Telecom Policy(NTP) is adopted •1st call on Mobile phone •Telecom Minister Sukh Ram(Delhi) to Jyoti Basu (Calcutta)
    6. 6. Quick Facts BE - Domain Study - Telecom 6 Total telecom subscribers : 509 million (Sep 2009) Wireless subscribers : 471.7 million Wire line subscribers : 37.3 million Tele density : 43.50 per cent India’s service providers revenue in Q1 (2009): $8.2 billion India’s Rural Mobile Phone Users : 100 Million Source: TRAI report – Nov 2009
    7. 7. Growing Numbers BE - Domain Study - Telecom 7 9 10 11 15 20 32 43 Revenue(US$ billion) Revenue(US$ billion)
    8. 8. Telecom Companies ? BE - Domain Study - Telecom 8 Nokia, Motorola, Samsung, LG, Sony Ericson Infinera, Cisco, Alcatel Lucent, Nokia Siemens, Huawei Bharti-Airtel, Vodafone, Idea, Relia nce, Tata Teleservices IBM, Wipro, Aricent, Tech Mahindra ARM, Texas Instruments, Qualcomm, Infineon Symbian, Google WTTIL, Tata teleservices tower, QTIL
    9. 9. Market Share BE - Domain Study - Telecom 9 As on 30th Sep ‘09 Net additions in Sep 09 Tata (26.74%) > Bharti (16.78%) 23% 18% 18% 13% 11% 10% 5% 1%1% Service Provider Market Bharti Airtel Reliance Communications Vodafone Essar BSNL Idea Cellular Tata Teleservices Aircel MTNL Others(Loop, MTS)
    10. 10. Handset market BE - Domain Study - Telecom 10 60% 8% 7% 6% 5% 15% India Nokia Sony Samsung Motorola LG Others 37% 5% 22% 5% 11% 20% Worldwide Nokia Sony Samsung Motorola LG Others Source: IDC Press Release
    11. 11. Growth Avenues BE - Domain Study - Telecom 11 Growth Avenues Enterprise Telecom Services Rural Telephony Value Added Services Virtual Private Network Managed Services Infrastructure Sharing WiMax 3G
    12. 12. Urban-Rural Telephony BE - Domain Study - Telecom 12 Urban India Rural India Population Contribution 15-20% 72%
    13. 13. History, Introduction, Facts GoI, Regulatory Bodies Spectrum Action India Advantage VAS Industry Updates Future Technologies Conclusion BE - Domain Study - Telecom 13
    14. 14. Strategic Flow Clear Policy Cheap tariff regime Competition So How all this happened?  500 Mn Mobile and Wire line subscribers in India today  Rs. 40,000 Crore quarterly revenue figures for this industry
    15. 15. TRAI functions BE - Domain Study - Telecom 15 Consumer Protection Ensure Quality of Service Ensure Affordable Tariff Regulate Interconnections Regulation, Directions, Orders Recommendations
    16. 16. Agenda History, Introduction, Facts GoI, Regulatory Bodies Spectrum Auction India Advantage VAS Industry Updates Future Technologies Conclusion BE - Domain Study - Telecom 16
    17. 17. Spectrum Allocation Need for Spectrum Allocation • Spectrum auctions ensure the efficient use of spectrum by allocating it to those entities that value it most, while also generating revenues for governments. • In order to allocate spectrum amongst competing service providers, regulatory agencies often use auctions. • The key challenge before regulatory agencies is to design auctions in such a way as to foster competition while at the same time ensuring that bidders can effectively use the spectrum for their business.
    18. 18. Spectrum Allocation in India o o Circles • In India, telecom licences were auctioned for basic and cellular services from 1991 by the Department of Telecom (DoT). • The entire country was divided into roughly 20 circles, categorized as A, B, or C depending upon their revenue potential. GSM&WLL • Required to seek Foreign partners. • For cellular licences, Global System for Mobile Communications (GSM) was the chosen technology and for basic services, a combination of fiber optic and wireless in the local loop (WLL) was selected.
    19. 19. Agenda History, Introduction, Facts GoI, Regulatory Bodies Spectrum Auction India Advantage VAS Industry Updates Future Technologies Conclusion BE - Domain Study - Telecom 19
    20. 20. India’s Competitive Advantage BE - Domain Study - Telecom 20 1. Fastest growing free market democracy 2. Cost advantage in product development and back office processing 3. Stable economic outlook – Decade long reforms 4. Huge market potential – one of the largest consumer markets 5. Large talent pool Source: www.telenor.com
    21. 21. Porter’s Diamond Model BE - Domain Study - Telecom 21 Factor Conditions Related and supporting industries Demand conditions Firm strategy structure and rivalry. Chance Government -Presence of skilled labour pool. -Rapidly developing robust telecom infrastructure. -Increasing disposable income of consumers. -Increasing demand due to changing lifestyles and growing attraction for mobiles with new features. -The government extends full support to industry through reform processes. - Policies are in place to safeguard the interests of service providers, as well as those of consumers. -Intensive competition in the country has made it possible for service providers to offer the services with lowers fare in the world, profitability, -Many new handset have been launched. -India has a large middle class of 300 million, -Growing affordability and lifetime free schemes have care a market at the bottom of the pyramid. -Teledensity (~43.5%) offers huge future potential. -Competent handset manufacturers have produced the lowest priced handsets for the Indian market. -Handset players are setting up manufacturing bases in India for better operation management. -Many telecom and equipment and software companies are based in India. Source: IBEF Report
    22. 22. FDI in Telecom Sector BE - Domain Study - Telecom 22 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 116 129 680 521 1275.65 2345.38 FDI in Telecommunication Sector (US$ million) Third largest sector to attract FDI in India Source: IBEF Report
    23. 23. Agenda History, Introduction, Facts GoI, Regulatory Bodies Spectrum Auction India Advantage VAS (Value Added Services) Industry Updates Future Technologies Conclusion BE - Domain Study - Telecom 23
    24. 24. VAS (Value Added Services) SMS VAS services, Bulk Messaging, B2B and B2C Voice IVR Mobile Radio, Voice chat, English Learning, Devotional and Astrology, Music on Demand Content downloads Mobile WAP Portal Consumer Applications Enterprise solutions : Mobile CRM, Mobile SFA CRBT (Caller ring back tones) USSD Message along with *141# Flash alerts
    25. 25. VAS offerings BE - Domain Study - Telecom 25
    26. 26. VAS market in India BE - Domain Study - Telecom 26 VAS: Not a form of basic service but adds value to the total service offering Contributes to 10% of total revenue from telecom operators The corresponding figure in developed nations is ~25%
    27. 27. Present Segments BE - Domain Study - Telecom 27 Population of India – 1,130 mn Mobile Subscriber Base – 509 mn GPRS Enabled – 70 mn GPRS Activated – 17 mn GPRS Users – 10 mn Source: IAMAI Report
    28. 28. Why mobile VAS ? Decrease in ARPU for telecom operators Very low operating margins Decreasing call rates: Lowest in the world @ 1p/sec Increase in number of operators in each circle Saturation in metro market: Over 100% tele-density in 4 metros BE - Domain Study - Telecom 28
    29. 29. VAS value chain Content Generators Eg. Music Companies, Website portals Content Aggregators Eg. Spice Digital, Hungama.com, Mauj.com Telecom Operators Eg. Airtel, Vodafone, Idea, BS BE - Domain Study - Telecom 29
    30. 30. Rural VAS Only 12% tele-density in rural areas as compared to 72% in urban areas Huge market potential Sachet model of VAS promotion Localization content • Local Mandi Rates • Weather forecasts • Health and job related information • Train services BE - Domain Study - Telecom 30
    31. 31. Agenda History, Introduction, Facts GoI, Regulatory Bodies Spectrum Auction India Advantage VAS Industry Updates Future Technologies Conclusion BE - Domain Study - Telecom 31
    32. 32. Industry Updates •Idea acquired 40.8% stake of Spice Communications at Rs 77.30 a share for Rs 2,716 crore. There was a share swap in which Spice shareholders got 49 Idea shares for every 100 Spice shares held. Idea Cellular’s Acquisition of Spice Telecom •Vodafone paid a discounted price of $10.9 billion in cash for acquiring the 52% stake held by Hutchison Telecom International (HTIL) Vodafone’s entry into India •Telenor is in the process of acquiring controlling stake of 67.25% in Unitech wireless via equity infusion Telenor-Unitech Deal •Japanese carrier NTT DoCoMo acquired 26 per cent stake in Tata Teleservices (TTSL). TTSL – DoCoMo Deal. BE - Domain Study - Telecom 32
    33. 33. Bharti-MTN deal To create a $61-billion transnational telecom goliath. • Combined revenues of $20 billion • Over 200 million subscribers across Africa, Asia and Middle East. Takeaways for Bharti • Access to new geographies with high growth potential. • Greenfield project, time- consuming and capital intensive. Reasons for failure - Dual listing • Indian rupee is not fully convertible • Not possible to go in for dual listing of shares. • which allows people to buy shares in the stock exchanges of one country and sell in the bourses of the other country BE - Domain Study - Telecom 33
    34. 34. India 3G Story BE - Domain Study - Telecom In India, 3G mainly for voice? Indiatimes - Sep 8 2008 India 3G kicks off; but at what cost? CIOL - Jan 16 2009 India 3G News: BSNL flips the switch Product Reviews - Mar 5 2009 DoT looking to hike the reserve price for the auctions of the pan-India 3G spectrum TopNews - Jun 12 2009 India 3G auction may happen sooner than expected Telecoms.com - Aug 27 2009 SK C&C, Reliance team on India 3G roll out EE Times India - Oct 20 2009 34Source: Google Trends
    35. 35. • 3G – Rs 35 bn • WiMax – Rs 17.5 bn • EVDO – Rs 8.25 bn Reserve Price • 2-3 times the reserve prices - to total at least Rs65bn–Rs120bn.Expected Bid • with no current presence in India have to pay an additional Rs 16.50bn for 2G spectrum. Foreign players • relaxing the normal US$500m limit on external commercial borrowingsECB Jan 14th 2010 BE - Domain Study - Telecom 35
    36. 36. Agenda History, Introduction, Facts GoI, Regulatory Bodies Spectrum Auction India Advantage VAS Industry Updates Future Technologies Conclusion BE - Domain Study - Telecom 36
    37. 37. Mobile Number Portability(MNP) BE - Domain Study - Telecom 37 The Inhibitors Huge Costs Infrastructure Upgrade Customer Retention/Increased Competition Cost Recovery and Bill Reconciliation/Query Processing Source: Voice and Data
    38. 38. Mobile Virtual Network Operator •Operator or company which does not own a licensed spectrum and generally with out own networking infrastructure What ? •MVNOs resell wireless services under their brand name, using regular telecom operator's network. How ? •Deploy their own mobile Intelligent Network (IN) infrastructure in order to facilitate the means to offer value-added services. •The goal is to differentiate versus the incumbent mobile operator, allowing for customer acquisition. Differentiation •MVNO's have full control over the SIM card, branding, marketing, billing, and customer care operations. Marketing •MVNOs have not been regulated in any country. ITU has received several requests to study the issue Regulation BE - Domain Study - Telecom 38
    39. 39. Wimax v/s 3G BE - Domain Study - Telecom 39 3G WiMax Result Spectrum Price To be auctioned DoT has recommended 25% of reserve price of 3G spectrum Advantage WiMax Spectrum Allocation Simultaneous Simultaneous Neutral For Voice services Best technology Evolving technology Advantage 3G Equipment/Standard Evolved over the years New technology Advantage 3G Data download speeds (fixed) 15 Mbps 70 Mbps Advantage WiMax Data download speeds (mobile) 15 Mbps 20 MBPS Advantage WiMax Source: Business Standard
    40. 40. Generations BE - Domain Study - Telecom 40 2g DATA RATE 14.4 3G 600KBPS TO 2MBPS 4G 10MBPS TO 20 MBPS
    41. 41. • Worldwide Interoperability for Microwave Access • IEEE 802.16e STANDARDS • BROADBAND EVOLUTION • Long term evolution • 3GPP • 80% • MOLILE EVOLUTION •MIMO (multiple input multiple output) smart antenna •OFDM •10 To 80mbps •Sprint, Clearwire, Comcast, •Motorola / Lucent •Rev m is the future •Small investment Wi Max (e not d) •MIMO •OFDM •20 to 100mbps •Revision 8 future is rev 10 •Vodafone/A&T/France Tele •Nokia & Ericsson •Large investment LTE 4G BE - Domain Study - Telecom 41
    42. 42. Agenda History, Introduction, Facts GoI, Regulatory Bodies Spectrum Auction India Advantage VAS Industry Updates Future Technologies Conclusion BE - Domain Study - Telecom 42
    43. 43. SURFING AGAINST BE - Domain Study - Telecom 43 Top Ten Challenges  Sustenance of same EBITDA  Competitive tariffs  VAS applications on Device  Spectrum management  Broadband expansion in Rural  Transition to NGN  Content Regulation of Data  Ecosystem to facilitate M&A  Reduce Circles to relax Roaming  Alternate Technologies (Solar/Wind for power back-up)
    44. 44. Road Ahead BE - Domain Study - Telecom 44 720 510 271 140 165 96 604 661 36 91 25 71 54.4% 43.6% 88.4% 60.5% 86.6% 57.6% China India USA Indonesia Brazil Pakistan People with and without mobile connections (in millions) Not Connected Connected Highest Number Not Connected People
    45. 45. References 1. Trai – Quaterly Report (Nov 2009). 2. IBEF report 2007-08 : Telecommunication - MARKET & OPPORTUNITIES. 3. Cellular Statistics – Cellular Operator Association of India 4. IAMAI & eTechnology Group@IMRB: MOBILE VALUE ADDED SERVICES IN INDIA- A Report. 5. Telenor Entering India: Investment Update 6. Voice and Data(May 2009): Mobile Number Portability - Poaching with Portability. 7. Business India : Telecom Takeover, Bharti-MTN deal BE - Domain Study - Telecom 45 Thank You for Your Attention !

    ×