Telecom Sector in India- 2030

8/2/2019 Telecom Sector in India- 2030

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Telecom Sector in India:2030

Prepared by

Ankit Sharma

Kapil Mohan SharmaShivendra Singh Chauhan


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Pre-independence

Till 1990New

EconomicPolicy

SteadyGrowth

Mobilerevolution


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Present Scenario

Telecommunications services are a global

market worth over US$ 1.5 trillion in revenue

With a growth rate of 45%, Indian telecom

industry has the highest growth rate in the

world

How big-270 million connections!

5th largest in the world

2nd largest in Asia


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Telecom Sector- Dec 2011


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Tele-density (Dec 2011)


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Market Share of Major Players

17.8

24.3

18.8

11.1

12.1

9.1

9.1Vodafone

AirtelReliance

IDEA

BSNL+MTNL

TATA TELE

Others

Source- DA analysis, TRAI


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The changing trends

In the present scenarios, India hosts some verybig names in the mobile phones as well as mobilephones network companies

Along with mobile phone sets, the prices ofmobile network charges have also decreasedsignificantly

This in turn has boosted the demand for added

mobile services that primarily includes stockmarket quotes, emails, cricket info, jokes andastrology services
http://www.proud2bindian.in/technology-india/3786-3g-technology.html


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3G Technologypromises advanced future of

mobile phones in India

Now that 3G has made its magnificent entry in the country,

people expect the future of mobile phones in India to flourish

more rapidly

High percentage of prepaid customers. About 90% of all GSM

& CDMA subscribers in India are prepaid customers.

Prepaid customers are low usage customers and contribute

only 25-30% ARPUs as compared to the post-paid segment

(for GSM, post-paid customers contributed Rs 628 in ARPU

while pre-paid customers contributed only Rs 219.

For CDMA, post-paid customers contributed Rs 499 in ARPUwhile pre-paid customers contributed only Rs. 140).
http://www.proud2bindian.in/technology-india/3786-3g-technology.htmlhttp://www.proud2bindian.in/technology-india/3786-3g-technology.html


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As mentioned earlier, the introduction of

number portability will further worsen the

attrition scenario, since itll make easy for

users to change operators and keep their

same number.

Operators will have to devise means and offerplans to retain subscribers and also convert

some of the pre-paid customers to post-paid

ones


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Change Drivers Towards Telecom in

2030

Emerging Technology

Economic structure and Globalization

Demographics Psychographics

Regulatory bodies and Government


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Emerging Technologies and Trends

4G

M- Commerce

BWA- Broadband Wireless Access(based on

WiMax)

LTE(3.9G)- Long Term Evolution

DLNA- Digital Living Network Alliance

MNP- Mobile Number Portability

(Qualcomm will use the BWA technology in India)


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4G Mobile Systems (2006-2010)

Access, handoff

Location coordination

Resource coordination to add new users Support for multicasting and Quality of Service

Wireless security and authentication

Network failure and backup Pricing and billing


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Mobile Computing Systems

Future Mobile Systems

Personalised Services providing stable system

performance and Quality of Service (QoS)

Challenges:

Mobile Station

System(Networks)

Service and standards


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Mobile Computing Systems

Some key features of Future Mobile Systems

High usability:

Anytime, anywhere and with any technology (all-IP

based heterogeneous networks)

Support for Multi-media Services at low

transmission cost

Personalisation(having human characteristics) Integrated Services


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Telecom Puzzle Successfully SolvedGovernment / Regulator

Strong, independent and activeregulator in place

Successful implementation ofregulatory changes

Stable foreign investment policy

Equipment Providers

State of the artlatest internationaltechnologies ataffordable prices.

Operators

Significant investment

Providing high qualityservices at an affordableprice

Customers

Embracing new

services in largenumbers

Huge & growingmarket

Ministry of Communications & Information Technology , India


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The two key challenges

Broadband for All: We definefullbroadband as enough bandwidth to implement a Full

Service Access Network(FSAN), e.g. all services including TV, for domesticuses.

FSAN allows Triple Play, telephone, Internet access and TV in the sameconnection.

At least 30 - 50 Mbits/s is then needed.

Access Everywhere:

Ubiquitous and seamless availability of telecommunication services (notnecessarily requiring full broadband).

Coverage also in areas with little or no infrastructure, and for high-mobility nomadic users.

A variety of wireless solutions, including satellite links and fixed radioaccess, will be important for implementing Access Everywhere.


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India presents a host of opportunities for telecom companies

To reduce their network deployment costs, many service providers are considering infrastructure sharing offers the following advantages:

Improved service quality

Increased affordability for customers

Faster roll out of services in rural and remote areas

Significant reduction in initial set up costs

Increased environmental aesthetics

Lower operating costs for service providers

Managed servicesis another segment that is attracting telecom companies. On

account of the rapidly growing subscriber base, service providers find it difficult to

manage their infrastructure and network management operations. In such cases, they

completely or partially outsource their infrastructure or network management

operations.

Virtual Private Networkis a private data network that

provides connectivity within closed user groups via public

telecommunication infrastructure.Competition is likely to

heat up in the VPN segment as DoT has relaxed the norms

for private players.

Enterprise Telecom Servicesincludes key services, such

as voice over Internet protocol (VoIP), dedicated telecom

communication systems, IT infrastructure enabled unified

communication services, etc. Telecom service providers are

increasingly targeting enterprises by providing dedicated

services and is expected to witness major developments in

near future.

Growth

Avenues

Infrastructure

Sharing Managed

Services

Virtual Private

Network

Enterprise

Telecom

Services3G

WiMax

Value-Added

Services

Rural

Telephony


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Emerging technologies 3G and WiMax to assist in penetration of telecom services in

India

WiMAX has been one of the most significant developments in wireless communication in the recent past. Since

this mode of communication provides network access in inaccessible locations at a speed of more than 4 Mbps,

it is expected to be a major factor in driving telecom services in India, especially wireless services. Thus, it will

lead to the increased use of telecom services, Internet, value-added services and enterprise services. WiMAX isexpected to accelerate economic growth and assist in providing better education, healthcare and entertainment

services.

It is estimated that India will have 13 million WiMAX subscribers by 2012.

Aircel is the pioneer in WiMAX technology in India.

The state-owned player, BSNL, aims to connect 74,000 villages through WiMAX.

Bharti, Reliance and VSNL have acquired licenses in the 3.3GHz range to utilise the opportunities offered by this

domain.

The Indian government plans to auction the spectrum for 3G services by inviting bids from domestic as

well as foreign players, and creating a competitive environment that offers better services to

consumers. Therefore, the 3G spectrum is among the major investment opportunities and growth

drivers of the telecom industry.

The immense potential for 3G is reflected by the 3040 percent annual growth in Value-Added

Services.

Cell phone manufacturers are striving to develop USD 100 priced 3G handsets for the Indian market.

India expects to replicate its 2G growth in 3G services.


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Value-Added Services and Rural Telephony holds large market potential in

India

Others (MMS

etc.), 3%

Game & Data, 7%Person to

Application &

Application to

Person SMS,

15%

Ringtone

Download, 35%

Person to Person

SMS, 40%

Value-Added Services in India (200910)

0

10

20

30

40

50

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007At Y ear Ending March

Teledensity(%)

Ur ban Tot al Rur al

Urban Rural Teledensity in India

The VAS industry was worth USD 632 million in 200910.

The industry is estimated to grow by 60 percent in 200910 and become an USD 1,011 million opportunity.

As the government targets to increase rural teledensity

from the current 2 percent to 25 percent by 2012, rural

telephony will require major investments. This segment

will boost the demand for telecom services, equipment,

Internet services and other value-added services; thereby,

offering great market opportunities for telecom players.

The VAS industry is currently focussing on the entertainment sector, such as the Indian film industry

and cricket; however, there is scope for growth in other avenues as utility-based services, such as

location information and mobile transactions.

Rural Telephony


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Mobile Commerce: Overview

Mobile commerce (m-commerce,

m-business)anye-commerce done in a

wireless environment, especially via the

Internet

Can be done via the Internet, private

communication lines, smart cards, etc.

Creates opportunity to deliver new services toexisting customers and to attract new ones


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Mobile Service Scenarios

Financial Services.

Entertainment.

Shopping.

Information Services.

Payment.

Advertising.

And more ...


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Classes of M-Commerce Applications


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Economic Structure and Globalization

Growing GDP

Growing Per Capita Income hence growing

Purchasing Power.

More telecom companies like NTT DoCoMo

coming to India creating stiffer competition.

This will in tariff war and alternative means of

revenue generation.

Growing importance of VAS.

Economic Structure


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Economic Structure

It has been observed that growth in the

number of new telephone subscribers has farexceeded the growth in the global economy

in the last twenty years

in todays literature on telecom economics asmuch as the other two factors, i.e.,

competition and technology

One plausible reason could be because of theimportance that has been attached to income

gap


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As a matter of strategy, it can be said that

targeted intervention through accesspromotion can be potentially instrumental in

delivering growth with equity.

Access promotion means expansion oftelecommunication and therefore will cause

growth to occur

A broad based access promotion strategywould lead to more equitable growth


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The first step towards broad based accesspromotion in India was initiated in the eighties

when Public Call Offices (PCOs) were givenprivate franchises for both domestic and longdistance services

Total number of PCOs grew from 0.2 million in2009 to 0.9 million in 2010

The 11th year Plan (2007-2012) targeted at

provision ofPanchayatphones in 360,000villages Local self-government body consistingof elected representatives at village level.


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Share of rural areas in total number of DELs in

the country stood at about 22.6 per cent in

January 2010, increasing from 21.4 per cent inMarch 2009


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Demographics

The growing telecom subscribers in India and

the continuous record additions of >7 mn per

month.

Content localization

Growing proportion of young population will

provide a huge opportunity for telecom

companies.

D hi Di t ib ti f T l


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Demographic Distribution of Telecom

Services


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Psychographics

Increasing per capita income has affectedpsychographics.

Increasing internet subscriber base has

affected the telecom operators. People are shifting from laptops to more

portable devices to access internet.

Telecom operators need to harvest thisopportunity through synergizing with mobilemanufacturers.


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Role of Government


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Next Generation Network

Many service providers are looking towards NextGeneration Network (NGN) services as a meansto attract and/or retain the most lucrativecustomers.

The general idea behind the NGN is that onenetwork transports all information and services

(voice, data, and all sorts of media such as video)by encapsulating these into packets, similar tothose used on the Internet.
http://en.wikipedia.org/wiki/Packet_(information_technology)http://en.wikipedia.org/wiki/Internethttp://en.wikipedia.org/wiki/Internethttp://en.wikipedia.org/wiki/Packet_(information_technology)


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Next Generation Network

Essencea) NGNs are commonly built around the Internet

Protocol, and therefore the term all IP is alsosometimes used to describe the transformation

toward NGN.b) It implies the migration of voice from a circuit-

switched architecture (PSTN) to VoIP

c) One network many services

d) Consolidation of several transport networks intoone core transport network based on IP.
http://en.wikipedia.org/wiki/Internet_Protocolhttp://en.wikipedia.org/wiki/Internet_Protocolhttp://en.wikipedia.org/wiki/Internet_Protocolhttp://en.wikipedia.org/wiki/PSTNhttp://en.wikipedia.org/wiki/VoIPhttp://en.wikipedia.org/wiki/PSTNhttp://en.wikipedia.org/wiki/VoIPhttp://en.wikipedia.org/wiki/VoIPhttp://en.wikipedia.org/wiki/PSTNhttp://en.wikipedia.org/wiki/Internet_Protocolhttp://en.wikipedia.org/wiki/Internet_Protocol


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Probable Key Changes

ARPUs is continually dropping and will do so in

the future due to stiff competition.(dropped 8.6

% from 2010 to 2011)* The only way out is to

look for alternative revenue streams like VAS. Operators focus on increasing the pie and eating

each others market share will continue to result

in low tariff rates for customers. Affordability of telecom services will continue to

increase due to further market expansion.


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Increasing tele-density in the rural and semi-urbanareas will continue to grow as operators would want tocapture it completely.

VAS will form a larger portion of the total revenue for

operators. Music claims one of the largest share of Indias mobile

VAS market size, estimated to be worth about USD 324mn (35%)

Operators will build their individual mobile musicbrand to capitalise on this huge opportunity.

Wireless subscribers will continuously rise as comparedto wireline subscribers.


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Total wireless subscriber base will continue to

form the majority of subscribers.

Wire line subscriber base will continue to

decline in the near future.

Growing internet subscribers may result in

increased use of VoIP.

Use of wireless technology will increase for

accessing the broadband.


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Broadband Access- Technology and

Market Share

Documents

Telecom Sector in India- 2030