Connecting a Continent With 802.16d - The Indian Experience

8/14/2019 Connecting a Continent With 802.16d - The Indian Experience

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2008 Tata Communications, Ltd. All Rights Reserved.

Prateek Pashine

June 16, 2008

Confidential & Proprietary

Connecting a continent with 802.16dThe Indian Experience


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1Tata Communications :: WiMAX Journey


Safe Harbor Statement

Certain words and statements in this presentation concerning Tata Communications and its prospects, and other statements including those relatingto Tata Communications expected financial position, business strategy, the future development of Tata Communications operations and the general

economy in India, are forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors, includingfinancial, regulatory and environmental, as well as those relating to industry growth and trend projections, which may cause actual results,performance or achievements of Tata Communications, or industry results, to differ materially from those expressed or implied by such forward-looking statements. The important factors that could cause actual results, performance or achievements to differ materially from such forward-lookingstatements include, among others, failure to increase the volume of traffic on Tata Communications network, failure to develop new products andservices that meet customer demands and generate acceptable margins, failure to successfully complete commercial testing of new technology andinformation systems to support new products and services, including voice transmission services, failure to stabilize or reduce the rate of pricecompression on certain of the companys communications services, failure to integrate strategic acquisitions and changes in government policies or

regulations of India and, in particular, changes relating to the administration of Tata Communications industry, and, in general, the economic,business and credit conditions in India. Additional factors that could cause actual results, performance or achievements to differ materially from suchforward-looking statements, many of which are not in Tata Communications control, include, but are not limited to, those risk factors discussed inTata Communications various filings with the United States Securities and Exchange Commission. These filings are available at www.sec.gov. TataCommunications is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements.

12 JAN 2008


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An Introduction to

TataCommunications

Broadband Current India

Perspective

WiMAX :: TheAnswer


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Tata Communications Leadership Landscape

State-of-the-artInfrastructure

200,000 route km globalnetwork

300 points of presence (PoPs)

20+ terabit submarine capacity

~1M sq. feet of data centerspace

Customers

1,500 global carriers

600 mobile operators

Fortune 1000 of India

5,000+ SMEs in India

500,000 Internet andbroadband subs

Industry Leader

#1 global wholesale voice

#1 global submarine cablecapacity

#1 intnl. long distance servicesin India

#1 enterprise data services inIndia

#1 Internet services in India


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Our Strengths

#1 International and Enterprise data services in India

Relationships with Top 2000 enterprises in India includingFortune 500 companies

Best connectivity to India and expanded reach within

IndiaEnablement

GlobalSubmarine &

IP Reach

Owned cable network across the globe: $1Bn investment

Tier-1 Global IP Network and leading ISP in India

Unique assets and connectivity in Asia, Middle East, Africa

Integrated

WholesaleServices

#1 wholesale international voice provider

Suite of voice, data, IP, signaling and outsourcing services

Over 1500 carrier relationships including 600+ mobileoperators


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Our Weaknesses & hence opportunities

Business largely focused on Wholesale and Enterprise

Legacy retail restricted to Dialup Internet

No retail voice businessCustomer

Base

Last Mile

Network

Limited ownership of last mile

Prohibitive cost of buried network

No LLU

No Legacy

voicespectrum

No 2G / voice spectrum

MMDS / LMDS spectrum available at 2.7 and 3.3 Ghz


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2008 Tata Communications, Ltd. All Rights Reserved.

Prateek Pashine

June 16, 2008


The Broadband

opportunity in India


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1.7%1.3%1.8%

5.5%5.9%

0.9%

2.5%

7.5%

8.9%

0%

2%

4%

6%

8%

10%

China

US

India

Japan

Brazil

Russia

UK

Germany

France

3,1483,6033,7825,8706,0746,673

35,165

44,453

27,803

0

10,000

20,000

30,000

40,000

50,000

China

US

India

Japan

Brazil

Russia

UK

Germany

France

GDP (US$bn) GDP CAGR (2005-2050E)

1,140

961

797

640

0

300

600

900

1,200

FY04 FY07 FY08E FY10E

Per Capita Income (US$)

CAGR : 10%

Rural

All India

Urban

0

250

500

FY95 FY90 FY95 FY00 FY05 FY10E FY15E FY20E FY25E

Avg HH disposable incomeRupees (000)

CAGR CAGR

4.6%

3.6%

2.8%

5.8%

5.3%

3.6%

Third Largest Economy by 2050Third Largest Economy by 2050(1)(1) With Highest Projected Growth RateWith Highest Projected Growth Rate(1)(1)

Increasing Per Capita IncomeIncreasing Per Capita Income(2)(2) Increasing Household Disposable IncomeIncreasing Household Disposable Income(3)(3)

India: Strong Economic Fundamentals

(1) Source : Industry Research; currency translated using 2003 US $ rate(2) Source: Street research & RBI website(3) Source: McKinsey Report: The Bird of Gold dated May 2007


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India: Favorable Demographic Shift

Favorable Shift in Income ProfileFavorable Shift in Income Profile (1)(1)

Increasing LiteracyIncreasing Literacy(3)

Growing Work Force (15Growing Work Force (15--59 yrs)59 yrs)(2)(2)

35% 32% 29% 27% 25% 23%

64% 64% 64%

9% 11% 12%

63%60%58%

8%8%7%

0%

25%

50%

75%

100%

FY 2001 FY 2006 FY 2011E FY 2016E FY 2021E FY 2026E

% of

population

0-14 yrs 15-59 y rs >60 yrs

54

35

22

41

43

36

4

19

32

1 1

8

21

0%

20%

40%

60%

80%

100%

FY 2005 FY 2015E FY 2025E

Deprived (Rs. 1,000,000 pa)

% literate population

3643

55

75

0

10

20

30

40

50

60

70

80

FY 1981 FY 1991 FY 2001 FY 2011E

% of population

(1) Source: Mckinsey Report May 2007 (Income levels are at real 2001 prices)(2) Source: The National Commission On Population May 2006(3) Source: India stats website; 2011 rate is Indias 10th Economic Plan objective


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Total PopulationTotal PopulationTotal Population

Addressable Urbanpopulation

Addressable UrbanAddressable Urbanpopulationpopulation

People with Phone (Wireline/Wireless) connections

People with Phone (Wireline/People with Phone (Wireline/

Wireless) connectionsWireless) connections

Cable/ Internet/ BroadbandConnections

Cable/ Internet/ BroadbandCable/ Internet/ Broadband

ConnectionsConnections

Population 1.2 billion

PhoneConnections300 million

CableConnections80 million

FixedConnections

40 millionInternetConnections

9.2 million BroadbandConnections

4 million

Internet

User70 million

India Huge Internet Potential

Urban Population

300+ million

Provisioning of wireless technology would enable conversion of addressable market into subscribersProvisioning of wireless technology would enable conversion of aProvisioning of wireless technology would enable conversion of addressable market into subscribersddressable market into subscribers

Source : TRAI, IAMAI, Management estimates (Estimates for September 2007)


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India Huge Internet Potential

CurrentImpediments

for growth

Poor infrastructure & support No LLU

Legacy network with long loop lengths

Unorganized cable infrastructure with poor network

2G + services in the country

High Buried Access Costs

Very low wireline penetration

200 months of ARPU as Capex

Limited green-field deployment

Limited spectrum for BWA

Limited content offering restricted utility for access

Wireless to bethe technology

for choice

Far superior roll-out mechanism with the advantage of existinginfrastructure of wireless telecom players

Spectrum auction likely in near term Transforming the Indian industry

Potentially large coverage and faster expansion

Wireless is the best technology to drive internet growth in IndiaWireless is the best technology to drive internet growth in India


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Bypassing Legacy the India Way

Voice Services: Digital mobile is 8X of fixed lines

GSM introduced in 1995 and CDMA-1X in 2003

No analog. No standards issues

Pay TV Services: Satellite leading theintroduction of digital TV

Analog cable prevalent since mid nineties

Government mandates conditional access inmetros

Satellite (DTH) services achieve 5% share in ayear 3 new players entering the market

Broadband ???


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Wire(d)less WIMAX to the fore!!


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WiMAX First off the Blocks

3G - Policy yet to be finalized Spectrum to be auctioned to 3-4 players

Greater impact on voice economics rather than data services

WiMAX Available now

ISPs using 3.3GHz spectrum for WiMAX roll-out

At least 3 networks being built in all large towns

Best spectral efficiencies

Already a 4G technology OFDMA today

Cost of CPE soon becomes indirect

Promising technology option - need catalyst to fuel the deploymentPromising technology option - need catalyst to fuel the deployment


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WiMAX in India Current Scenario

RegulatoryScenario

Spectrum available in the 3.3 GHz band

6 players with 12 Mhz

1 player with 14 Mhz

CPE cannot be sold to subscribers

Royalty for BTS and for every CPE on an annual basis

2.x GHz auction expected in FY 2008-09

Deploymentstatus

Operators migrating from MMDS/LMDS at 3.3 Ghz to WiMAX

Largely for Enterprise; also for Retail Tata Communication: Launched services in 35 Cities for Enterprise

Launched its services in Bangalore with 7 K active subs

Aircel and Reliance: Offer to enterprises has been rolled out in 8-10 cities

Others trialing WiMAX gear


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WiMAX in India

Tata Communications takes the lead!!!


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Market needs | WiMAX in India

Businesses

Supplement Fiber roll-out in majormetros

Expand access reach (~ E1) to allmajor business towns

Current Status: >35 towns

March 2009: 115 towns

Consumers

Primary access mechanism forBroadband

Provide reliable 1Mbps experience+ content/apps

Current Status: 1 city

March 2009: 15 cities


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Bangalore :: Retail WiMax Roll out Details, Indias first ALL CITY coverage ofWiMAX

Launched with 132 BTS in Dec 2007, currently 158

Most sites back hauled on Fibre

3.3 Ghz, 12 Mhz, 3 Mhz/sector, 4 sectors

85% of the city covered

Outdoor SS truck roll required

Introduced 3rd party SS to work with the BTS

Arguably the first network in WiMax d to have fully interoperable 3rd party SS

SS installed at between 3 to 8 mtrs height ARPU of $25 + a month almost 3 times the industry average

Over 7,000 customers installed in first 4 months!!

6 other cities ready to go Live in coming quarter


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Bangalore coverage

City divided based on Business requirement in to 5 clusters Cluster 0 Corporate Downtown

Cluster 1 SME

Cluster 2,3&4 Residential

Design Assumptions

Cell edge QAM16

Building edge coverage

90% Probability of service by area Area of coverage approx 300 Sq Km


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Bangalore City Clusters

Cluster 4

Cluster 3

Cluster 2

Cluster 1

Cluster 0


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Overall Coverage


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Our Experience

3.3 Ghz 16 d deployment Subscriber Station height a key factor for feasibility

Outdoor and Semi-Outdoor Coverage is not an issue

Full Outdoor SS will definitely give better coverage.

Limited Indoor Coverage Indoor penetration loss is high in 3.3Ghz Spectral Efficiency of 2 bits/Hertz/Seconds 6 mbps per sector

IOT with different SS vendors


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Sample Pictures - BTS & SS


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FY 2008 FY 2009 FY 2012Roll-Out Plan

Top 40-50 Cities (1)

> 100 Cities(1)

5-7 Cities(1)

Current Status Q4, FY 08 FY 09 FY 10 FY 11 FY 12

Cities in India 2 5-7 ~40 - 50 ~60-80 ~80-100 >100

No. of BTS 150 - 200 200 300 3,000 3,500 ~4,000 4,000 4,500 4,500 5,000

National spectrum availability 3.3 GHz 3.3 GHz 3.3 GHz

2.x Ghz

3.3 GHz &

2.x GHz

3.3 GHz &

2.x GHz

3.3 GHz &

2.x GHz

% of urban population covered(2) ~4.9% ~5.6% ~25.6% ~34.5% ~37% ~40%

% of city coverage (area) > 85%

(1) Rollout in progress(2) This is a percentage of the urban population of the cities planned to be covered by Vertex


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Not letting the lack of spectrum in the standard bands affect Wimax rollout

Tata Comm. ActionForum SupportIndustry Reactions

Yes, we can giveyou d equipmentat 3.3

3.3GHz profileDeploys/deployinglargest d networkWhat is 3.3 Ghz

Wimax??!!!

What do youmean byindependent CPEin d ?

Yes we will publishIOT and share datafor HL integration

Publishintegration/IOstandards beyondjust MAC/PHY in d

Tata Comm placesorders withindependent vendorswith full integration

3.3 e!!! comeback after dontknow how manymonths

3.3 e yes but at 5Mhz >> 3.3 e at 3Mhzalso

Create 3 Mhz profileRFQ floated and trialscommenced in 3.3e


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Crystal Gazing, India market.circa 2013

Largest WiMAX subscribers will be in India :: ~ 30 mn BB subscibers WiMAX contributing to 60+% of all Broadband connections

5-6 networks each having 60/70 Mhz spectrum

700 Mhz, 2.3, 2.5 and 3.3 Ghz networks live

3 Mhz, 5 Mhz and 10Mhz profiles deployed in India adaptive channel sizeselection

Quad band SS available at USD 20

In Summary, India promises to repeat the Mobile revloution?Are you part of it or out of it?


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Tata Communications Taking Broadband to the masses with Wimax


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Documents

Connecting a Continent With 802.16d - The Indian Experience