1. INDIATHE BIG PICTUREDomestic IT Services, ITeS and IT Product Markets India Telecom Services and Mobile Handset MarketsCMR MarketView 2011 CMRCMRInsights powered by researchInsights powered by researchCyber Media Research Ltd. An ISO 9001: 2008 Company

2. CMR CMRInsights powered by research Insights powered by researchForewordDear Industry Colleague,With the rich demographic dividend and great business opportunities around, India is catching everyonesattention. On the contrary, business sentiment currently is less than optimistic about the Indian economy. Wesee challenges like inflation, increase in input cost, high profile scams, allegations of corruption, and lack ofadequate employment opportunities.The facts, however, present a less than grim and rather more comforting picture. Growth will continue through2012, and for the years in the scope of this MarketView (2010-2014), the India growth story will maintain itspositive momentum.But is this optimism misplaced, or does it have a sound basis? Even the most trenchant critics of Indiaseconomic ills will agree that there exists another India beyond the inflation, scams and unemployment.This new India is powered by a throbbing, pulsating, industrious and growth hungry middle class that isincreasingly being joined by the teeming millions emerging from the bottom of the pyramid in cities, townsand villages across the length and breadth of the country.According to recent industry estimates, the Indian middle class is expected to grow from 160 million inearly 2011 to nearly 270 million by early 2016. Over the same period, the absolute number of poor in thepopulation is expected to reduce from over 680 million to less than 560 million. Largely powered by this middleclass boom, Indias GDP is expected to continue to grow at a healthy pace. According to World Bank estimatespublished in June 2011, Indias GDP growth rate will moderate to 8.0% in 2011, but will recover to 8.4% in2012 and may rise to 8.5% in 2013. These developments and sentiments will have a direct and positive rub-off on Indian business enterprises, in turn fueling the domestic IT and telecoms industry to grow, as you cansee in the numbers captured in this edition of CMRs MarketView.We would see growth increasingly led by IT services leveraging on new delivery models like cloud computing,thereby creating more flexible and dynamic enterprises. There could be an argument around the lowerpenetration of cloud on the ground, but I am sure we are at the beginning of a strategic opportunity toparticipate in a new and disruptive cycle of IT procurement.I hope you will find this document useful to gain an overall perspective of the India domestic IT-ITeS andTelecoms industry. My team and I would love to hear from you.With warm wishes,Thomas GeorgeVice President and HeadCyberMedia Researchtgeorge@cmrindia.comCMR MarketView 2011 l India: The Big Picture l July 20112Copyright 2011 Cyber Media Research Ltd. Reproduction is forbidden unless authorized. All rights reserved. 3. CMR CMRInsights powered by research Insights powered by researchContentsIndia: The Big Picture...........................................................................................................................4CMR MarketView 2011 Part I: Domestic IT Services, ITeS and IT Product Markets ....................................5 India growth story to continue...........................................................................................................6 Growth of the Cloud Computing paradigm .........................................................................................6 Key product segments to register above average growth ....................................................................6 Enterprise-wide solutions spending to take off in 2011.......................................................................7 Enterprise IT infrastructure focused on optimization ...........................................................................8 High-growth, IT-enabled intelligent industry verticals and government sector set to evolve ................10CMR MarketView 2011 Part II: India Telecom Services and Mobile Handset Markets...............................12 Major growth drivers: Launch and roll-out of 3G and BWA / WiMax / LTE services ..............................13 Mobile handsets to witness a high growth rate.................................................................................13 Note: This document reflects the opinion of CyberMedia Research (CMR) analysts. The information, analyses and forecasts contained in this document are based on current market hypotheses, estimates and assessments and may be subjective in nature. CMR does not assume responsibility or liability of any manner whatsoever, for claims of damages arising out of use of data contained herein and / or claims of loss resulting from use of such data and viewpoints. CMR may modify the numbers and viewpoints contained herein at any time without prior notice.CMR MarketView 2011 l India: The Big Picture l July 2011 3Copyright 2011 Cyber Media Research Ltd. Reproduction is forbidden unless authorized. All rights reserved. 4. CMR CMRInsights powered by research Insights powered by researchIndia: The Big PictureRs 4,60,528 Crore or USD 100 Billion: The combined value of domesticIT services, ITeS, IT products, Telecom services and mobile phonemarkets for 2012. CyberMedia Research (CMR) MarketView 2011captures the India growth story that is still unfolding...Table 1. Overall India IT Services, ITeS, IT Products, Telecom Services and Mobile Phones Industry: Size and Growth Forecast, 2010-2014 (Rs. Crore and and USD Billion)Categories2010 20112012 20132014CAGR 2010-2014Total India IT, ITeS &Telecoms Industry,333,591 394,452 460,528533,388 611,615 16.4%Rs. CroreTotal India IT, ITeS &Telecoms Industry, 73 86100116 133 16.4%USD Billion Source: CyberMedia Research (CMR), 2011 Figure 1. Overall India IT Services, ITeS, IT Products, Telecom Services and Mobile Phones Industry, 2010-2014 (Rs. Crore and and USD Billion) Industry Revenues (USD B) Industry Revenues (Rs. Crore) Source: CyberMedia Research (CMR), 2011CMR MarketView 2011 Part I: Domestic IT Services, ITeSand IT Product MarketsIndia domestic IT services, ITeS and IT products markets to touchRs.1,71,697 Crore or USD 37 Billion in 2012CMR MarketView 2011 Part II: India Telecom Services andMobile Handset MarketsIndia Telecom services and mobile handset markets to touchRs.2,88,832 Crore or USD 63 Billion in 2012CMR MarketView 2011 l India: The Big Picture l July 20114Copyright 2011 Cyber Media Research Ltd. Reproduction is forbidden unless authorized. All rights reserved. 5. CMR CMRInsights powered by research Insights powered by researchCMR MarketView 2011 Part I:Domestic IT Services, ITeS and IT Product MarketsThe overall India domestic IT Services, ITeS and IT Product markets will touch Rs 1,71, 697Crore in 2012. Growing at a CAGR of 17.3% over 2010-2014, the aggregate market size of thedomestic IT services, ITeS and IT products sector will touch Rs 2,33,930 Crore by 2014. Table 2. India Domestic IT Services, ITeS and IT Product Markets: Size and Growth Forecast, 2010-2014 (Rs. Crore and USD Billion) Year2010 20112012 20132014CAGR 2010-2014 IT Services + IT- enabled Services,45,672 55,23567,10281,710 98,18821.1% Rs. Crore IT Services + IT- enabled Services,1012 1518 2121.1% USD Billion IT Products (Software + Hardware), 77,686 90,933 104,595 119,312 135,742 15.0% Rs. Crore A large chunk of IT Products (Software + Hardware), 1720 2326 3015.0% IT hardware and USD Billion software products, will Total Domestic IT+ITeS 123,358 146,168171,697 201,022 233,93017.3% witness good traction Market, Rs. Crore on account of the Total Domestic IT+ITeS2732 3744 51 17.3% healthy growth in ITMarket, USD Billion services, as enterprisesSource: CyberMedia Research (CMR), 2011 try to gain the best leverage out of their IT Figure 2. India Domestic IT Services, ITeS and IT Product Markets, 2010-2014 (Rs. Crore) deployment. Anirban BanerjeeRevenues (Rs. Crore) Revenues (Rs. Crore) Associate Vice President, Researchand Advisory Services, CMRSource: CyberMedia Research (CMR), 2011Notes:1) Hardware includes PCs, Servers, Printers & MFDs, Storage, Networking Equipment, Consumables and Accessories.2) Networking Equipment includes Switches, Routers, IPT and WLAN equipment, SCS, RAS, Modems, VSAT, Softswitches and Media Gateways.The continuing importance of the domestic IT sector is visible with the combined IT Services(including IT-enabled Services) and IT Products (Software and Hardware) markets expected totouch Rs 2,33,930 Crore or USD 51 Billion in 2014.CMR MarketView 2011 l India: The Big Picture l July 20115Copyright 2011 Cyber Media Research Ltd. Reproduction is forbidden unless authorized. All rights reserved. 6. CMR CMRInsights powered by research Insights powered by researchIndia Growth Story To ContinueTelcos and ISPs areDomestic IT Services and IT-enabled Services markets to grow at a CAGR of 21.1% to touch Rs 98,188well positioned to offerCrore by 2014cloud services with easeOf the Rs 98,188 Crore domestic IT Services and ITeS market in 2014, IT Services alone will growsince they already haveat 16.7% CAGR over 2010-2014, while domestic ITeS spending will grow at a CAGR of 30.2%their data centers andover the same period.bandwidth pipes in place,both of which play aManaged Services will emerge as a strong growth driver with demand for increasingly sophisticatedpivotal role in deliveringservices engagements from the India enterprise segment.cloud services.Apalak Ghosh Growth of the Cloud Computing paradigm Manager, Emerging Technologies,Public Cloud Computing to touch Rs. 2,434 Crore by 2014 Software and IT Services Research,CMRThe India Public Cloud Computing market is expected to grow at a 53% CAGR over the five-year period 2010-2014 to touch Rs. 2,434 Crore by 2014. Penetration of Cloud Services in theIndia enterprise segment, which was at 4% in 2010 would increase to 6.8% by 2012. This isa significant development, as it signals that the India software user is moving from the licenseand use model to the pay per use paradigm. The India SaaS market is expected to touch Rs.465 Crore in 2011.The advent of the cloudcomputing paradigm is Another development is the growing realization amongst Indianwitnessing widespread telecom service providers (TSPs) and Internet Service Providersinterest from the vendor- (ISPs) about the business opportunity offered by the newservice provider-channelcloud computing paradigm. TSPs and ISPs are in a vantagecommunity on the oneposition to launch cloud computing services, primarily thehand and business leaders cloud computing flavour Infrastructure as a Service orand CIOs on the other.IaaS. Indian Telcos such as Reliance Communications,This is fuelled by theTata Communications and state-owned BSNL have alreadystrong belief that clouddeclared their intention to address this emerging opportunity.computing will allow aThe growth of the India IaaS market is expected to be relativelylarge number of SMB slow in the 2010-2012 time-frame, but is expected to pick upenterprises to adoptthereafter. The overall CAGR for the India IaaS market during 2010-the same enterprise 2014 is expected to be 49%.class software andtechnology solutions, Key product segments to register above average growthwhich were earlier theCAGR for 2010-14: Software: 20.1%, PCs: 12.9%, Servers: 13.3%, Networking Equipment: 15.5%exclusive preserve ofPerformance of traditional sectors like manufacturing and logistics in 2010 would partially helplarge enterprises. This,to swell the market for Customer Relationship Management (CRM) and product Supply Chainin turn is expected toManagement (SCM) solutions in 2011 and beyond. CyberMedia Research expects the India productallow the market forsupply chain applications market to witness a growth rate of 16.5% in 2011, which is significantlysoftware solutions tohigher than the CAGR of 2.2% for the period 2007-10. The need to digitize documents andopen up as large, upfronteffectively manage the huge volumes of data that is generated through paper forms, particularlycapital investments inby the BFSI, Government, Healthcare and Telecoms verticals as well as in digital media will paveIT infrastructure can bethe way for growth of the enterprise content management (ECM) applications market in 2011 andconverted into smaller,2012. The India content applications market is slated for an 18.5% growth in 2012 over 2011.manageable pay-per-useannuity payments.Business Analytics (BA) solutions will witness increased usage across decision making levels Kamal Vohradue to the greater ease of deployment and availability of pre-defined data templates. This wouldSenior Manager, Software and IT be a direct result of the availability of BA solutions on SaaS platforms. (See Enterprise SolutionsServices Research, CMRsection for more details).CMR MarketView 2011 l India: The Big Picture l July 20116Copyright 2011 Cyber Media Research Ltd. Reproduction is forbidden unless authorized. All rights reserved. 7. CMR CMRInsights powered by research Insights powered by research Convergence will continue to gain momentum, with the increased focus on mobility and convenience to make life simple. The India client (desktop PC, notebook PC, netbook, tablet) and digital accessory (printer, projector, digital camera) markets are expected to see increasing consolidation of form factors in the years ahead. This trend is already evident in the case of multi-function devices (MFDs) for the past few years.The bulk of the client PC and accessories market will also benefit from public and social sectorinitiatives, especially projects and programmes launched by the Government in the Educationand Healthcare space, and increased focus on making available broadband Internet accessto residents of villages and rural areas. A combination of these initiatives will drive increase inpenetration of IT and telecommunication products and services. Increased adoption of digitalproducts and exposure to content through the Internet and DTH television will in turn generatedemand for digital lifestyle products, consumer packaged goods and services in rural areas in 2012 and beyond.As the market maturesand grows in size, vendorsIn the case of the digital camera market, CyberMedia Research expects the point-and-shoot (P&S)and OEMs are expected camera category to grow at a CAGR of 27%, while DSLR cameras would grow at a CAGR of 61% into launch devices withterms of units over the period 2010-2015. The overall India digital camera market would grow at ainnovative, new features to CAGR of 29% in terms of units over the same period. The India digital camera market would touchcater to emerging demand50.6 lakh units in 2012, of which 46 lakh units would be P&S cameras, while the remaining 4.6patterns. Exampleslakh would be DSLR cameras.that come to mind are,With increasing IT adoption among a large number of Indian enterprises, there has been a sharpintegration of both cameraincrease in the levels of business intelligence data generated. Fast paced changes in the externaland projector in a mobile business environment, coupled with the proliferation of IT are driving Indian enterprises to look forphone, and the availability flexible network architectures that can be dynamically provisioned based on real time usage patterns.of both computation and Geographical expansion, increasing use of converged networks, deployment of enterprisewidecommunication apps or applications, demand for data centers and network virtualization have served to increase the importancefeatures in a media tablet.of structured cabling solutions (SCS) in India in recent years. The India Networking Equipment marketThe savvy Indian (including Switches, Routers, IPT equipment and Structured cabling Solutions) is expected to grow atcustomer is expectednearly 20% in 2012 (over 2011) to touch Rs 18,688 Crore or USD 4.06 Billion.to choose her deviceportfolio based on needEnterprise-wide solutions spending to take off in 2011and lifestyle preferences.Cloud enablement of applications in 2012For instance, a businessa)Enterprise Resource Planning (ERP) Solutions: The ERP solutions market was negativelyexecutive may choose toimpacted due to the global recessionary trends in 2009. There were signs of recuperation inignore the netbook and2010, in which the ERP market grew by 20.3% over 2009. This trend is expected to continuego straight for a mediain 2011, as the ERP market is slated to register a growth of 17.9% over 2010. When viewedtablet to complementin the light of the CAGR for the period 2007-10 which was 8.2%, the projected growth rate inher notebook PC and2011 over 2010 is a significant improvement. The large size of the ERP market also augmentssmartphone. One sizethe opportunities that await ERP vendors and the IT services players in 2012. Most largedoes not fit all andenterprises have deployed an ERP package and would go in for a revamp or an upgrade. Thecustomers can be expectedbulk of the demand would come from mid-size enterprises, which are in the expansion mode,to exercise their choiceand would deploy ERP solutions for cost reduction and resource optimisation.based on a best fitassessment of individualb)Performance of traditional sectors like manufacturing and logistics in 2010 wouldneed and investment swell the market of CRM, product supply chain solutions in 2011 and beyond:capacity.Enterprises in manufacturing are revamping their supply chain networks. This trend is largelySumanta Mukherjeeas a result of the increasing acceptance of e-Commerce and its integration into traditional General Manager, Computing Products, brick-and-mortar business models by various industries such as books, apparel, consumer Peripherals and Channels Research,electronics, gifts and accessories. This will drive up spending in the Supply Chain ManagementCMRCMR MarketView 2011 l India: The Big Picture l July 20117Copyright 2011 Cyber Media Research Ltd. Reproduction is forbidden unless authorized. All rights reserved. 8. CMR CMRInsights powered by research Insights powered by research (SCM) applications market. Advanced production planning software will also find adoption in 2011 and 2012. CyberMedia Research expects the India product supply chain solutions market to witness a growth rate of 16.5% in 2011, which is significantly higher than the CAGR of 2.2% for the period 2007-10. The higher growth phase started in 2010 and is expected to gather strong momentum in 2011 c) Enterprise Content Management (ECM): The need to digitize documents and effectivelymanage the huge volumes of data that is available in paper as well as in digital media willpave the way for the growth of the content management applications market in 2011. TheGovernment sector would emerge as one of the most important contributors to this growthstory. The India content applications market is slated for an 18.5% growth in 2011 over 2010.This number is higher than the growth observed in 2010 over 2009 which was 13.5%, andalso than the CAGR for the period 2007-10, which was a mere 8.8%. d) Business Analytics: In 2011, the Business Analytics (BA) space will be largely focusedon moving to the cloud. Software providers who do not already have SaaS versions of theirBA solutions available will offer this new option to customers. Many customers will seriouslyevaluate the possibility of migrating their BA solutions to the cloud, as vendors improve theportfolio of their SaaS solutions and delivery against service level agreement (SLA) norms,companies will rely more on SaaS BA providers to dissect their information for actionableinsights to improve decision making.The deployment of BA solutions with mobile functionality features will be an additional impetusfor using these solutions. CyberMedia Research expects to see strong collaborative functionality features and specific capabilities for analyzing unstructured content and data coming fromsocial media sources. Collaboration, mobility, and self-service capabilities will promote the usageof BA applications. BA applications will become even more user-centric and less technical.The next generation of BA solutions will be increasingly deployed on cloud platforms in 2012.Enterprise IT infrastructure focused on optimizationStorage solutions, data center consolidation and virtualization, and unified communications pluscollaborative applications to help in resource optimization and boosting of business productivitya) Storage resource management / optimization, data de-duplication, automated tiering solutions: For 2011, technologies of importance in the enterprise IT infrastructure domain are primarily expected to be storage resource optimisation, data de-duplication and automated tiering solutions. The use of storage resource optimization and resource management tools will see greater experimentation amongst enterprises in 2011, though they will fall short of becoming mainstream. However, some of the key arguments in favour of eventual mainstreaming and wider adoption of such technologies are outlined below: i)Storage Resource Management / Optimization: Product vendors, IT consultants and VARs are starting to offer storage resource management tools as services to improve storage utilization, capacity planning, monitoring and reporting. Such tools help users gain insights, metrics and measurements that allow them to make more informed decisions about how they should deploy their IT and storage resources. They also help to lay a framework to support initiatives such as cloud and virtualization. ii) Data de-duplication: Enterprises are consuming large capacities of storage day-in and day-out, taking up more and more floor space. Even if users can get a factor of 2-to-1 data reduction on primary storage, they would save significantly; they get considerablyCMR MarketView 2011 l India: The Big Picture l July 2011 8Copyright 2011 Cyber Media Research Ltd. Reproduction is forbidden unless authorized. All rights reserved. 9. CMR CMR Insights powered by researchInsights powered by research more than this if they use de-duplication techniques. Primary de-duplication, or data reduction technologies help de-duplicate or compress data on primary storage arrays. This enables companies and organizations to store more data in the same storage array for less money. These solutions are already available in some form in storage arrays and their deployment is expected to expand in 2011.iii) Automated tiering using Solid State Disks (SSDs): SSDs commonly referred to as flash drives have gained ground in recent quarters and in 2010 most vendors incorporated these into automated tiering solutions in storage arrays. In such solutions, data is automatically moved between the disk tiers and the SSD tier transparent to the application, without the requirement for any operator or storage management admin intervention. This means users can take data in a volume that is inactive and move it to lower tiers. This greatly improves the cost benefit of using SSDs and helps increase the overall performance of storage arrays. As storage usage patterns change during the courseIT applications such as of the business cycle, the dynamic performance of the system would change accordingly.Automatic Fare CollectionSuch deployments are popular in enterprise data centers. CyberMedia Research expects(AFC) Systems for Rail,this would be one of the important storage technologies to be seen in 2011 and beyond.Road and Multimodal Another theme thats likely to see some degree of experimentation in 2011 and 2012 is DataTransport (like Metro Footprint Reduction. This means enterprise CIOs would aim to get more productivity out ofRail, Monorail, and Bus existing storage resources with techniques like archiving, backup modernization, compression,Rapid Transit (BRT); and thin provisioning.Intelligent TransportSystem (including UrbanAccording to CyberMedia Research, the India device management, infrastructure management andTraffic Management storage management solutions combined market will grow at a CAGR of 23% over 2010-2015. StorageSystem, Highway Trafficreplication is expected to grow at 20% CAGR over the same period.Management System, b) Data Center consolidation, virtualization and Green IT initiatives will focus onPublic Transportationreducing overall cost of business operations and maximizing availability andSystem, Travelerutilization of resourcesInformation System, TollCollection System) for toll The India datacenter market will witness new trends in bandwidth pricing, power andplazas, national highways cooling solutions and security. Datacenter consolidation and virtualization will be driven byand city transporttwo main factors:infrastructure; AirportInformation Managementi) Minimize energy consumption and overall cost of operation, andSystems (AIMS) for newii)Maximize utilisation of IT resources for providing real-time support to businessairport terminals as wellShrinking budgets, rising energy costs and increased preference for outsourcing inas greenfield airports data centres will lead to new engagement and management models the hybridare being extensivelycloud and pay-per-use regimes will replace legacy systems. Secure access to suchdeployed. Around Rs 206infrastructure will be provided through encryption and secure public-private keys (PKI:Crore was spent during Public Key Infrastructure and PGP: Pretty Good Privacy etc.).2010 to deploy these With increased business led focus on better utilization with cost reduction beingintelligent IT applicationsthe norm, Green IT initiatives in enterprise and service provider facilities will lookand nearly Rs 4,000 Croreto build higher energy efficient data centres through right sizing, improved systemis the expected valuearchitecture and better design.of IT spending on thesedeployments in the 4 years c) Unified Communications (UC), collaborative applications plus other cost savingsolutionsfrom 2011 to 2014.Vivek Mishra Although the days of sending messages through carrier pigeons and telegram are long Manager, Smart Infrastructure andover, most Indian enterprises still use PSTN telephones + EPABX, standalone email, VoIP,Energy Practice, CMRchat and IM in varying degrees of mix. A large number of enterprises do not understand or CMR MarketView 2011 l India: The Big Picture l July 20119 Copyright 2011 Cyber Media Research Ltd. Reproduction is forbidden unless authorized. All rights reserved. 10. CMRCMRInsights powered by researchInsights powered by research lack the resources and business drive to integrate the disparate communication channelsCurrently, the key focusinto an integrated unified messaging or unified communications system.areas for smart griddevelopment in India are Today the proliferation of communication options has become a burden for enterprise ITend of load shedding,teams to manage. This reason and the drive to provide seamless communication solutionsensuring reliable powerto business users will see many more large and mid size enterprises in India experimentsupplies, delivering with UC in 2011 and move towards fuller adoption in 2012.cheaper power, optimummix of energy supplies High-growth, IT-enabled intelligent industry verticals and governmentto reduce dependence onsector set to evolvecostly power sources, andFocus on Healthcare & Lifesciences, Media & Entertainment, Retail, Government & Education sector,more sustainable power Smart Infrastructure, Energy & Power Utilitiesthrough integration of Verticals like BFSI, Manufacturing and Telecommunications have been traditionally strong ingreen and renewableleveraging technology for business objectives. In 2012 emerging verticals like Healthcare &resources with deploymentLifesciences (over 19% growth over 2011), Media & Entertainment (over 16% growth), alongof Net Metering. These with BFSI (nearly 15% growth), Manufacturing (over 15% growth) and Telecommunications (oversteps would lead to16% growth), will all witness healthy IT spending growth on the back of a sustained economicincrease in overall powerrevival in the India economy. These rates of growth in IT spending are likely to be sustained, inavailability and strengthenspite of some moderation in GDP witnessed in FY 2010-11 due to tightening of monetary policyenergy independence forby the government to control inflationary pressures. Retail sector IT spending is expected to growthe country.at more than 19% in 2012 (over 2011), while IT spending growth for the Government & EducationVivek Mishrasector is expected to touch nearly 16% year-on-year (2012 over 2011). Manager, Smart Infrastructure andEnergy Practice, CMR Other emerging verticals, which are expected to be future drivers of growth for the India domestic IT- ITeS sector are Smart Infrastructure (Intelligent Transportation), and Energy & Power Utilities sectors. All of these sectors are witnessing deployment of innovative IT-ITeS and Telecoms applications. The Restructured Accelerated Power Development and Reforms Programme or R-APDRP Scheme of the Ministry of Power, Government of India plans to use IT-ITeS for making power transmission and distribution infrastructure in India intelligent. IT applications like Energy Accounting & Auditing, Supervisory Control and Data Acquisition (SCADA) systems, MIS, Integrated Meter Reading (Billing & Collection), Automatic Data Logging System, GIS mapping, Automatic Meter Reading and Prepaid electricity are being enabled across most of the distribution companies (Power Utilities or Discoms) across India. Pilots of Smart Grid deployment have also been initiated by a few discoms. The Government of India launched the India Smart Grid Forum in June 2010. The Forum will bea non-profit voluntary consortium of public andprivate stakeholders with the prime objectiveof accelerating development of Smart Gridtechnologies in the India Power UtilitiesSector. The goal of the Forum would be to helpthe Indian power sector deploy Smart Gridtechnologies in an efficient, cost-effective,innovative and scalable manner by bringingtogether all the key stakeholders and enablingtechnologies. The India Smart Grid Forumwill coordinate and cooperate with relevantglobal and Indian bodies to leverage globalexperience and standards wherever availableor helpful, and will highlight any gaps in thesame from an Indian perspective. CMR MarketView 2011 l India: The Big Picture l July 201110 Copyright 2011 Cyber Media Research Ltd. Reproduction is forbidden unless authorized. All rights reserved. 11. CMR CMRInsights powered by research Insights powered by researchCMR Healthcare Research and Advisory PracticeIn an increasingly interconnected and interdependent world, some of the key challenges that face healthcareenterprises include product pipeline slowdown, optimizing R&D productivity and innovation, squeezedbudgets, patent cliffs, the threat from generics, and the need to leverage external partnerships.To cope with the challenges and risks in such a complex healthcare marketplace, a vast array of healthcarestakeholders depend on CMR Healthcare Research and Advisory Practice for critical perspectives and keeninsights on the healthcare market dynamics.The CMR Healthcare Research and Advisory Practice provides market research, consulting and advisoryservices for enterprises at all levels of the healthcare and life sciences value chain, from ideation tocommercialization. CMR combines research insights and ecosystem knowledge gained from Asias leadinglife sciences platform, BioSpectrum and consulting insights from the CMR Consulting Practice for strategicinterventions designed to deliver competitive advantage to your business.CMR employs robust qualitative and quantitative techniques and analysis, besides desk research tounderstand key healthcare market drivers. We organize a vast array of healthcare data and facts intosolid, relevant metrics. By combining therapy area expertise with innovative research thinking, we providea global perspective aided by local understanding across Asia and through partners across the rest of theworld.We help you address current trends and challenges, identify new technologies and leverage criticalopportunities for enterprise growth through an array of services, including industry research and marketstrategies, growth consulting and capacity building.The team at CMR comprises seasoned professionals with rich exposure and in-depth experience in thehealthcare, pharmaceuticals and biotechnology industries. By combining scientific acumen with real-worldbusiness insights and experience, the team strives to leverage competitive advantage for your enterprise.CMR Healthcare Research and Advisory Practice Expertise Areas Global market research Proprietary market research strategies Strategy consulting focused on growth R&D Strategies R&D Pipeline Management R&D Return on Investment R&D investment options analysis Therapeutic area entry strategies Diligence and M&A strategies Facilitating India-entry strategies Risk analysis and mitigation strategies Innovation management and technology transfer Capacity buildingCMR MarketView 2011 l India: The Big Picture l July 201111Copyright 2011 Cyber Media Research Ltd. Reproduction is forbidden unless authorized. All rights reserved. 12. CMR CMRInsights powered by research Insights powered by researchCMR MarketView 2011 Part II: India Telecom Services andMobile Handset MarketsThe India telecom services and mobile handset markets to grow at 16.7% in 2012 (over 2011)to touch revenues of Rs 288,832 Crore or USD 63 billion.Of this, the telecom services (including mobile and fixed line services) will contribute Rs 2,05,454Crore (USD 45 billion) in 2012. The India mobile handset market, that includes featurephonesand smartphones, will grow at over 30 percent during 2012 to touch revenues of Rs 83,377Crore (USD 18 billion).In the five year period between 2010 and 2014, the India Telecoms industry will grow at a CAGRof 15.8% to touch revenues of Rs 3,77,683 Crore or USD 82 billion. Table 3. India Telecom Services and Mobile Phone Markets, 2010-2014 (Rs. Crore and USD Billion)The Telecoms growthCategories 2010 20112012 2013 2014 CAGR 2010-2014story will be a functionof the enhanced Telecom Services, Rs. Crore 159,519 184,207205,454226,741 248,956 11.8%demand for high Telecom Services, 3540454954 11.8%USD Billionspeed broadband anddata services fromMobile Phones, 50,71464,07783,377 105,625 128,729 26.2%both enterprises andRs. Croreconsumers, as 3G andMobile Phones, USD Billion 1114182328 26.2%BWA / WiMax servicesTotal Domestic Telecomsare rolled out by various Market, Rs. Crore210,233 248,284288,831332,366 377,685 15.8%operators to cover an Total Domestic Telecoms 4654637282 15.8%increasing number ofMarket, USD Billioncities and towns.Source: CyberMedia Research (CMR), 2011Anirban BanerjeeFigure 3. India Telecom Services and Mobile Phone Markets, 2010-2014 (Rs. Crore) Associate Vice President, Researchand Advisory Services, CMRRevenues (Rs. Crore)Source: CyberMedia Research (CMR), 2011Notes:1) Mobile Telecommunication Services include voice telephony services, data services and VAS.2) Fixed-line Telecommunication Services include PSTN, leased line, IP-VPN, WLL, xDSL and other services.3) Mobile Phones include featurephones and smartphones.4) Spends on Telecoms Network Infrastructure and Tablets not included.The growth in the India domestic mobile handsets market will be fuelled by a more than 150%increment in the value of featurephones and smartphones shipped, from Rs 50,714 Crore in2010 to Rs 1,28,729 Crore in 2014.The India Telecom Services sector may see policy changes that could result in marketCMR MarketView 2011 l India: The Big Picture l July 201112Copyright 2011 Cyber Media Research Ltd. Reproduction is forbidden unless authorized. All rights reserved. 13. CMR CMRInsights powered by research Insights powered by researchconsolidation over the next few quarters.The key highlights of CMRs MarketView 2011 for the India Telecoms Services and Productsmarket are as follows:Major growth drivers: Launch and roll-out of 3G and BWA / WiMax / LTEservicesUsage of high speed broadband, VAS and data services to growEstablishment of 3G and BWA (WiMax and Long Term Evolution or LTE) will have a positive impacton the India market; however, broadband content will remain in early stages of developmentthrough 2011.With the allocation of 3G and BWA spectrum and rollout of services by private as well as incumbentoperators, WiMax/LTE will help in overcoming the infrastructure issues in the country as well asdeliver enhanced performance to end-users.In terms of broadband content, 2011 will witness early stages of development. However, asWiMax / LTE services gain in popularity, content creation and mobile application development willwitness increased focus by vendors, developers and service providers looking to build their ownportfolio of unique apps.Other high growth Telecom Services areas include IP-TV, IP-VPN, VoIP, Mobile VAS etc. on.Mobile handsets to witness a high growth rateAt 26.2% CAGR over the period 2010-2014, the segment is slated to touch Rs 1,28,729 Crore in 2014The smartphones market in India is expected grow to over 10 million units in 2011 from 6 millionunits in 2010. The Android Operating System will continue to gain acceptance as a mobileoperating system (OS) and 12% of all smartphones shipped in India during 2011 are expected tobe based on the Android platform.The early adopter phenomenon in media tablets will become visible in India in 2011, but willfight shy of becoming mainstream. CyberMedia Research expects over 1,00,000 Tablets to shipin 2011 alone, based on the current portfolio of players like Samsung, Apple, Olive and others.However, media tablets in their present form and currently prevailing price points are unlikely toexcite the large majority of consumers. A game changer in this space could happen in late 2011/ early 2012 if a players such as Reliance Infotel introduces a mass market Tablet priced lowerthan Rs. 10,000 per unit.CMR MarketView 2011 l India: The Big Picture l July 2011 13Copyright 2011 Cyber Media Research Ltd. Reproduction is forbidden unless authorized. All rights reserved. 14. CMR CMRInsights powered by research Insights powered by research Backgrounder on SmartphonesSmartphones are mobile devices with evolved operating systems, that include Symbian Series 60, AndroidOS, iPhone OS, Blackberry OS, Linux among others, according to Naveen Mishra, Senior Manager,Telecoms Practice, CMR.In addition to voice capability these devices have the ability to download and run applications, and storeuser data beyond their required personal information management capabilities.These devices are able to synchronize with a desktop or laptop computer. Smartphones offer users PC-likefunctionality. These phones have ended the need to carry a separate PDA (Personal Digital Assistant) anda mobile phone. Examples of present day smartphones include the Apple iPhone 4, Motorola Milestone,HTC Desire, Samsung Galaxy, Blackberry Curve etc.Users can browse the Internet, check mail, blog, share photographs, update their status on socialnetworking sites, play games, download applications with their smartphones. Till the end of 2010,a top-end smartphone used to be equipped with a 1GHz processor. Starting 2011, with the use ofdual core processors in smartphones, these devices have become more powerful as compared to theirpredecessors.Going forward these devices will become as powerful as present day laptops, adds Naveen.Smartphones like Motorola Atrix 4G, LG Optimus X2 use dual core processors. A dual core processor is acombination of two 1 GHz processors, which can be used in parallel giving more power and speed to thedevice. Though these processors enable more power but a smartphones overall performance still dependson the integration of its software with its hardware. For example, how closely the phones software andapplications are able to interact with its hardware taking out the maximum advantage of hardware abilitiesof the phone. The best example is Apple iPhone 4, which runs on a single core processor but is able totake full advantage of its hardware abilities.Some of the applications where multi-core processor based smartphones can provide a boost to usage areGaming, Autostereoscopic 3D enabled handsets, video streaming, HD (high definition) video recording andplayback, video conferencing, HDMI user interface.Autostereoscopic technique is a method of displaying images with perception of 3D depth without requiringthe viewer to wear any glasses. This activity needs extra power and the new generation of smartphonesis able to deliver this.The dual core smartphones will also allow users to play advanced games, which need more power. Userswill be able to enjoy games or videos on a bigger screen by connecting the smartphone output to an HDTVthrough HDMI ports. Again, the increased power of a new generation smartphone will prove helpful inrunning HDMI applications.Dual-core processors will enable full HD video playback and recording at 1080p resolution, which is a bigleap forward from the 720p video playback currently available in top present day smartphone models. Beyondfull HD support, dual-core processors would enable smartphones to run more demanding applications likevideoconferencing and video streaming. These smartphones will also provide a significantly higher speedand performance for multitasking in comparison to first generation smartphones.The market is expected to witness more excitement on the CPU front, with the launch of multi-coreprocessor based smartphones by a number of mobile phone vendors by end 2011.CMR MarketView 2011 l India: The Big Picture l July 2011 14 14Copyright 2011 Cyber Media Research Ltd. Reproduction is forbidden unless authorized. All rights reserved. 15. CMR CMRInsights powered by research Insights powered by research CMR Semiconductor Industry PracticeThe worldwide semiconductor industry was pegged at an annual value of nearly US$ 300 Billion in 2010 (Source:Semiconductor Industry Association, http://www.sia-online.org). It has shown steady growth over the years despite manyups and downs in the verticals that it serves. The reason for this is the diversification in usage of chips coupled withrestructuring of business models within the industry.With the evolution of the fabless business model and a shift from Integrated Device Manufacturing (IDM) to an R&D-focused, fabless chip organisation, the semiconductor industry has become innovative, highly competitive and fragmented.Today the industry has some of the leading chip solutions being developed by fabless companies. This model has allowedscientists with an entrepreneurial bent of mind to launch their own companies.CMR has over 24 years of research experience in the Information Technology and Telecommunications domains. Bankingupon its rich experience in these domains and to focus on the emerging semiconductor markets, the CMR SemiconductorPractice has been established as an independent research entity. Besides serving the research requirements ofthe semiconductor industry, the practice will provide useful insights about the chip industry to equipment and devicemanufacturers.CMRs research is chip type-agnostic covering all major chip designs such as FPGAs, ASSPs, DSPs and ASICs. Therationale of covering all of these designs is that they are not competitive but collaborative in nature. Though, they may bemore or less performing similar tasks, their applications are varied.Semiconductor research and advisory services offered by CMR provide industry information along the entire value chain ofthe communications industry. CMRs offerings cover:1) Industry Profiling Studies2) Industry and Segment Analyses3) Competitive Analysis4) Syndicated Reports5) Custom Consulting StudiesCMR adopts a deep-dive approach for segmenting the communications industry, based on applications as well as industrystandards and protocols.CMR Semiconductor Industry Practice Expertise Areas Infrastructure Equipment: All communications services and applications evolve out of a robust infrastructure thatnot only allows the service provider to offer new services but also have a roadmap for scalability and upgrading.The specific features of infrastructure equipments used define application areas that form the basis of any serviceofferings. At the core of these infrastructure equipments like DSLAMs, BTS, application servers, media servers,gateways and infrastructure routers we find a chip carrying out the underlying computing processes. CMR researchon infrastructure chips focuses on providing information and analysis about the usage, latest trends, applications anddesign innovations that will enable players in taking strategic decisions about the selection of a chip. Network Devices: Network forms the basis of any communications delivery platform. A number of devices likeswitches, routers and gateways are used to perform specific tasks on the network. At the core of these devices areprocessors and semiconductor materials that control the processes that help in data flow, control and management.CMR reports and information bulletins (newsletters) will keep stakeholders abreast of the latest developments andchanges in the industry. The chip manufacturers will get information about the requirements and expectations ofdevice manufacturers, while device manufacturers will be able to keep a track on important developments within thesemiconductor industry. End User Equipment / CPE: CPE and end-user device manufacturers are facing a number of challenges as existinglines of demarcation get erased. A data device is not capable of being used for voice and vice versa. Convergenceat the device level is the focus of equipment vendors. From mobile phones to tablets to laptop PCs, applications aregetting cross-pollinated with a variety of devices capable of similar applications. As a device manufacturer, it is criticalto know which processor and semiconductor materials should go into the device so that it serves the purpose of thetarget end user segment. At the chip level, this means a challenge of reducing the size, increasing performanceand offering competitive price points. CMRs research offerings capture insights at the CPE level that provide criticalmarket insights to chip vendors so that their offerings are in sync with industry requirements.CMR MarketView 2011 l India: The Big Picture l July 2011 15Copyright 2011 Cyber Media Research Ltd. Reproduction is forbidden unless authorized. All rights reserved. 16. About CyberMedia Research (CMR) A part of CyberMedia, South Asias largest specialty publisher, CyberMedia Research (CMR) has been a front runner in the market research, consulting and advisory services since 1986. CyberMedia Research (CMR) offers research and consulting services insights, market intelligence, market sizing, ecosystem mapping and go-to-market services covering the IT, ITeS, Semiconductor, Telecommunications, Government, SMB & Entrepreneurship, Smart Infrastructure, Energy and Healthcare & Life Sciences domains. CMRs research studies cover stakeholder satisfaction surveys, mega spender assessments and market mapping studies for the diversified list of sectors mentioned above. For more details, please visit http://www.cmrindia.com CMRCMR Insights powered by research Insights powered by researchFor inquiries please contact: Vishaal Bhatnagar Associate Vice President, Marketing, Communications and Analyst Relations +91 - 98101 91634vbhatnagar@cmrindia.com Tinu ThomasNational Sales Manager, India+91 - 99804 94509tthomas@cmrindia.comCopyright 2011 Cyber Media Research Ltd. Reproduction is forbidden unless authorized. All rights reserved.