CI BDA Broadband Overview 2007-03-19

7/31/2019 CI BDA Broadband Overview 2007-03-19

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Prepared forMetro Ethernet Forum

Carrier Ethernet Press Briefing

March 19, 2007

2007 BDA

Current Scenario in Indias

Telecom Market


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BDA IntroductionBDA Introduction

Market OverviewMarket Overview

Broadband FocusBroadband Focus

Table of Contents


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BDA provides strategy consulting and research to leading TMT firms and investors with afocus on emerging markets and emerging technologies in Asia.

The first TMT consultancy in China, BDA was founded in 1994 and is the leading firm of its

kind, now having a team of over 30 based in Beijing.

Active in India since 2004, advising TRAI as well as international carriers, vendors andinvestors active in, or seeking to enter, the Indian market.

BDA also tracks emerging technologies and business models from Japan and South Korea.

BDA has dedicated analysts organized around three sector groups:

BDA is able to support companies through: Research subscription services Customised retainers

Consulting projects

BDA: Telecom / Media / TechnologyConsulting & Research

Handsets/Devices Fixed Line & Wireless Internet/New Media

www

Equipment & Services


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Table of Contents


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Industry dynamics will make India the number twomobile subscriber market in the world by 2010

Most inhabited areas of India should be covered bymobile networks by the end of 2009, despite only45-50% coverage today.

The number of total mobile subscribers is expectedto increase from over 155 million today to 500million by the end of 2010 as per Govt. targets.

Broadband growth has just begin with the incumbentand some private telecom operators offeringaggressive pricing plans along with expanding

networks. But penetration remains minutecompared to voice penetration.

Factors accelerating growth include: low levels of penetration and increased competition

leading to product innovation and increased capital

expenditures reduced regulatory uncertainty

declining equipment costs

the Government changing its policy for UniversalService to provide subsidy for mobile cellular and plansto extend that to broadband connectivity as well

Broadband spread has just begun

Entry of foreign carriers into the ILD & NLD space

Source: Industry Reports, BDA Analysis


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India Market Status

Select ed market t rends

Indias mobile subscriber growth continues to grow faster than China

Recent M&A/FDI activity by Vodafone (Hutch Essar), and IDEA Cellulars IPO beingoversubscribed is a major vote of confidence in Indias Telecom sector growth prospectsand response to lifting of foreign investment ceiling to 74%

Government recognizes that QoS parameters are extremely important, however spectrumavailability continues to be the biggest bottleneck

Operator Wireless MarketShare Breakdown

(Jan 2007)

8.8%

16.4%

21.1%16.4%

22.7%7.2%7.5%

Airtel

Reliance

BSNL

Hutch - incl. BPL

Idea

TTSL

Others

Population 1.112 billion

Fixed Subs / Penet rat ion 40.40 mn / 4% (Jan 2007)

Mobile Subs / Penet rat ion 156.31 mn / 14% (Jan 2007)

I nternet Subs / Penet ration 8.07 mn / 0.7% (Sep 2006)

Broadband Subs / Penet rat ion 2.15 mn / 0.2% (Jan 2007)

Note: Mobile subs data includes fixed wireless customers.

Source: TRAI, COAI, AUSPI, BDA Analysis

* CDMA Mobile Figs for BSNL not included
http://bdabjfl01/Share/CCD/Projects/Archive/Old%20Projects%20to%20October%202002%20-%20A/BDA%20Database/World%20Factbook/flags/in-lgflag.jpg


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India's mobile subscriber base is increasingphenomenally with nearly 7 million subs added eachmonth

5.3

5.96.1

6.7 6.86.5

6.8

3.5

2.9

4.4

2.5

4.5

5.4

3.9

4.8

4.3

5.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Sep-05

Oct-05

Nov-05

Dec-05

Jan-06

Feb-06

Mar-06

Apr-06

May-06

Jun-06

Jul-06 Aug-06

Sep-06

Oct-06

Nov-06

Dec-06

Jan-07

MicroPrepa

idTake

soff

Launch of 999 scheme

Million

Source: TRAI, Morgan Stanley Research, BDA Analysis

Penetra

tioni

nB&

CCircles


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Table of Contents


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Emphasis on broadband growth in India was ignitedby the efforts of TRAI & DOT in 2003 to 2004

Key Milest ones in t he History of I ndia Broadband

ISP policy announced to allow private ISPs to enter Nov 1998

National Telecom Policy 1999 sets targets for providing high speed data for all towns

with greater than 200,000 population

1999

TRAI releases consult at ion paper & recommendat ions on Accelerat ingGrow th of I nt ernet and Broadband Penetr ation

Nov 2003 & April 2004

National Internet Exchange launched by Department of IT 2003

TRAI issues consultation on Review of Internet Services Dec 2006

DOT part ially accepts TRAI s recos for I nt ernet and Broadband, includingthose for broadband subscriber t argets, and releases Broadband Policy 2004

Oct 2004

WPC de-licenses 2.4 GHz spectrum for outdoor usage Jan 2005

BSNL & MTNL launch residential broadband services on DSL Jan 2005

TRAI slashes rates of international and domestic leased circuits Apr & Nov 2005

India misses first broadband subscriber target of 3 mm Dec 2005

TRAI issues recommendations on IPLC competition , which are then accepted by DOT Dec 2005 & Dec 2006

Source: TRAI, BDA

200 d l d f k f h
http://www.trai.gov.in/Default.asp


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In 2004, TRAI developed a framework for howto analyze growth of broadband in India &identified the various hurdles preventing it

11 Hurdles Are Preventi ng t he Grow th of Broadband

Price1. Prices for broadband are 1,200 times higher than in Korea

Access to the customer

2. Lack of access to the incumbent s copper for DSL

3. Low qualit y of cable TV infrastructure and lack oforganization

4. High costs for DTH and VSAT

5. Policies preventing w ireless solutions from spreading6. Clearances for right of way

Cost of backhaul networks7. Lack of effective competition in the w i th in ci ty netw orks

8. High costs ofinternational bandwidt h

9. Ineffective implementation ofNational I nt ernet Exchange ofI nd ia (NI XI )

Fiscal policies

10. High taxes and duties, and lack of incentives for faster growth

Content and applications11. Lack of locally relevant content and absence of change agent

to drive growth

Infrastructurefor Access

Content Access devices

Reinforcinggrow th cycleIn

crea

sedco

ntentleve

ls

prom

otefu

rtherd

eman

dfo

r

quality

infr

astruc

ture

Availabilityofviable

infrastru

cturepromotes

proliferationofaccessdevices

Proliferation of access devices promotescontent creation

The information, programs,and services on the internet

This includes portals,information sites, e-mail,messaging, chat, e-commerce, etc.

The interface the user haswith the internet and itscontents

Does not have to be a PC

Complete connection to the end-userfrom information source

Connection can be wire-line or wireless,broadband or narrowband

Grow th in Broadband andI nternet is Driven by theI nterplay of Three Distinct Factors

Source: TRAI
http://www.trai.gov.in/Default.asphttp://www.trai.gov.in/Default.asphttp://www.trai.gov.in/Default.asphttp://www.trai.gov.in/Default.asp


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3

9

20

0.11.3

2.1

0.40

5

10

15

20

2003 2004 2005 2006 2007 2010

Targets Actual

I ndian Broadband Subscribers Broadband Breakdow n by Technology,Sept 2006

Since then, broadband subscriber growth in Indiahas not met the targets set by the Government

90%

5%4%1% 0.10%

DSL Cable Modem Ethernet LAN Fibre Radio

Million

Source: TRAI, BDA


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0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07

Wireless Broadband

Percent age Mont hly Grow t h of Subscribers

Percent

Even the trend of broadband growth is not yet verypositive, and much less consistent than mobile

Source: TRAI, BDA


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Many in the industry have been questioninggovernment policy initiatives

Spectrum allocation and pricing for wirelessbroadband

Unified licensing & VOIP / Internettelephony interconnection with PSTN

License fees for ISPs providing VPN and

Internet telephony

Wholesale / resale market for bandwidth

Local loop unbundling

Clarification of broadcast & cable laws for

IPTV provisioning

Rural area growth via niche operators

QoS and SLAs for upstream bandwidthfrom NLD & ILD operators

Relocation of satellite services from lowerextended C band (3.4 GHz 3.7 GHz)

Regulating international bandwidth landingstations

USO subsidies for wireless infrastructure in

rural areas

Potential USO subsidies for broadband inrural areas

State wide area networks and 100,000community service centers

Reduction of entry barriers for telcos intoNLD & ILD services space

Has the government changed policies suf ficient ly t o enable exponent ial grow t h

Out st anding issues Posit ive m ovement s

Source: BDA


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But for broadband to succeed in India, each part ofthe ecosystem needs to be appropriately promoted

Technology

Government Services Rural Development

Content / Services

Regulation

Source: BDA


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Contact Details

I ndia: + 91 11 4700 3100China: + 86 10 8529 [email protected]

www.bdaconnect.com

Documents

CI BDA Broadband Overview 2007-03-19