Future Of Indian Telecom

Birds Eye View

Beyond Voice:
Future of Indian Telecom

Compiled By
Aegis LeadCap Research and Consulting


Executive Summary

India is 2nd largest telecom players among emerging economies with 800 million
mobile subscribers. Almost 100 million Indians have access to internet with 40%
among them accessing internet via mobile phones. The numbers are predicted to go
three times higher by 2015. India’s mobile handset market is expected to grow by
25 % in volume this year to reach.

India telecom revenues is primarily driven by voice which constitutes to 90% of total
revenues leaving only a smaller portion for data. Aegis LeadCap Research &
Consulting predicts that in next 5 years share of revenue from voice will reduce
down to 60% from its current state of 90%. Most prominent value add services which
drives data revenues include games, location based services, video calls, mobile
adverts, music and mobile TV. It is also estimated that value added services in India
will generate Rs 55,000 Cr by 2015.


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 revenue
from 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.

Continued..
Social networking has outspokenly become the new age media for
communication with 30 million users in India. 60% of the total 700Mn global
user 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 Million
urban Indians are using this service. Cell phone has been more than a cell
phone for years, but soon it could take on an entirely new role — standing in for
all of the credit and debit cards crammed into wallets.

Mobile TV is also emerging as a key service driven by its mass market appeal
and intuitive usage. 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.

Industry estimates that 8 billion mobile apps were downloaded in 2010 and 44
billion mobile apps would be downloaded by 2016. Thus the mobile phone is
now much more than just a communication device - more like remote control
for your life.


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


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


Voice and Data Minutes

Source: National Regulators/ITU/Operators


International Data Revenue


Challenges and Opportunities

Challenges Opportunities

How to bring Fortune at the bottom of the Data Monetization
Pyramid?
Data Traffic Growth is Faster Than Compensation with Data Services
Revenue.
Declining of ARPU Designing Low energy/renewable power

Regulatory Issues New Government /Private investments

Telecom Power

Understanding Customer Preference on
VAS
Inadequate Infrastructure


Mobile Value Added Services


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


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


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


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

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.


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


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.


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 contract

Source: www.penn-olson.com


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.


Mobile Content
 User Generated Content:
3. Pictures
4. Graphics
5. Videos

 Organization Generated Content
9. Infotainment: UTV Bloomberg, NDTV
10. Entertainment:Balaji Tele Films
11. Education: AEGIS launched first online MBA program on 3G Tablet.
12. Health: Fortis, Apollo Hospitals


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.


Mobile Money

Mobile bank then is simple - the phone becomes the branch
and this model is thus very appealing to new financial service
providers looking to get to market rapidly without the burden of
physical 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


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


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


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.


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


Annexure
Generation 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)


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


Data Technologies


Disclaimer
This 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.


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