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Investing in Indian Telecom
India - An Overview
Why India?
Telecom Market and Growth Potential
Opportunities for investments
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India –An Overview
Population
States/Union Territories
Geographical Area
Business language
GDP - per capita (PPP):
GDP (PPP)
Over 1 billon
35
3.3 million sq km
English
US $3,400 (2005 est.)
US $3.699 trillion (2005 est.)
Source: CIA Fact bookSource: CIA Fact book
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4th largest economy by PPP index
6th largest energy consumer
GDP growth to continue between 6-8% in the
last decade
Projected to be 3rd largest economy by 2050:
Goldman Sachs
Why India –Macroeconomic Impetus
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Why India –Demographic Impetus
Working age population of India ( ages 15-64) set to increase to 882 million by 2020.
Working
age
population
to rise
to 65%
India’s urban population expected to rise to 40 per cent from the current 28 per cent by 2020
Urban
population
to rise
to 40%
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Why India - Government Telecom Policy
Virtually complete deregulation.
Specified imports related to telecom infrastructure were exempted from basic customs duty
Foreign Direct Investment up to 74 per cent permitted.100% FDI permitted under automatic route in the manufacturing sector
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Market and Growth Potential• Revenue expected to increase 3 times in the next 5 years
• Current teledensity of 8.8 % set to increase to 20% in the next 5 years
•Growth rate about 5 million subscribers per month
Source: TRAI (Telecom Regulatory Authority of India)Source: TRAI (Telecom Regulatory Authority of India)
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Market and Growth Potential
7th largest telecom network in the worldSize (2003) US$ 9 billion
2010 (projected) US$ 23 billionTelecom network growth rate 30% Fixed lines (Dec, 2004) 44.76 million Wireless connections (Dec, 2004) 48 millionUrban teledensity 18.2%Rural teledensity 1.5%
Source: TRAI (Telecom Regulatory Authority of India)Source: TRAI (Telecom Regulatory Authority of India)
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Market and Growth Potential
Country/ Market TeledensityIndia 8.50%China 32%Malaysia 57%USA/Japan 115-120%
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Market and Growth Potential
0
5
10
15
20
25
30
1 2 3 4 5 6 7 8 9
China India
India Vs China in comparable years of service
In the 9th year of wireless operationChina(1996) 6.8 millionIndia(2002) 28 million
Source: TRAI (Telecom Regulatory Authority of India)Source: TRAI (Telecom Regulatory Authority of India)
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Opportunities for investmentsForeign Direct Investment (FDI)
•Bharti Tele-Ventures, a large private telecom player offering varied telecom services and the largest GSM cellular operator,currently has foreign partners holding a combined stake of 55 % in the company; these include SingTel(with 28.4%), Vodafone (with 10%) •Hutchison Whampoa has a 53 per cent stake in Hutchison Telecom, the second largest GSM cellular operator in India.•AT&T Wireless has a 33.3 per cent stake in Idea Cellular while France Telecom holds a 26 per cent stake in BPL Mobile.