Growth of Domestic Telecom Market in India: Potentials for Investment and Business for Foreign Players - A Case for Kore

1. GROWTH OF DOMESTIC TELECOM MARKET IN INDIA POTENTIALS FOR INVESTMENT AND BUSINESS FOR FOREIGN PLAYERS A CASE FOR KOREAN IT FIRMS by VINOD VAISH Former Secretary DOT, Member TDSAT DIRECTOR CMAI 10th June, 2009 Seoul, Korea www.cmai.asia

2. Telecom Administration in India • Government of India- Department Of Telecom (DoT) - Policy making and Licensing • Telecom Regulatory Authority Of India (TRAI) - Recommendatory Body for Licensing in Telecom And Broadcasting and Regulator for Telecom and Broadcasting • Telecom Dispute Settlement and Appellate Tribunal (TDSAT) - Adjudicating Body for Telecom and Broadcasting Disputes

3. Functions of Deptt. of Telecom • Telecom Policy Formulation • Telecom Licensing • Wireless Spectrum Management • Universal Service Obligation • Standardization, R & D • Administration of : • Indian Telegraph Act • Indian Wireless Telegraphy Act • Telecom Regulatory Authority of India Act

4. Major Milestones of the Indian Telecom Sector • 1991 –Liberalization of Telecom Sector . Manufacturing opened to private participation • 1992 – Bids invited for Mobile services in Four Metros and the Radio Paging in 27 cities in the country licensed • 1994 – Mobile and Basic Services opened for the private sector in the country • 1997 – Establishment of Independent Regulator (TRAI) • 1999 – Migration to revenue share

5. Major Milestones of the Indian Telecom Sector contd… • 2000 – Establishment of TDSAT – NLD sector opened up – Corporatisation of the operating arm of DoT-Formation of BSNL • 2002 -- ILD Sector Opened up for private participation Limited Internet Telephony permitted to ISPs

6. Major Milestones of the Indian Telecom Sector contd… • 2004- Broadband Policy Announced • 2005- Full Internet Telephony permitted to UASL Licensee

7. Telecom Service Licenses- Area of Operation

8. Telecom Service Users in India as on March 2009

9. Opportunity Highlights in Indian Telecom • One of the fastest growing In the world - ( Adding around 10-15 Million in a Month) • More than 430 Million Subscribers in April 2009 • State of the Art Networks – GSM, CDMA, IP • Penetration Rate(30%) remains lower than comparable markets, offering potential for rapid growth • Consumer data services remains a largely untapped opportunity • Government encourages both existing as well as new entrants

10. Opportunities/ Potential Areas for Korean companies in India • 3G and Broadband Wireless Access and applications • Triple Play Services • Next Generation network and services • Cell phones , 2G & 3G : Fastest growing Cell phone market. • FTTH ( Fiber To The Home) -Passive Optical Networks • Value added services in Mobile segment • Transition from Ipv4 to Ipv6 in Indian Network • Voice on IP protocol (VOIP) and Internet Telephony • Security Equipment for IP networks (Internet, NLD ILD)

11. 3G and Broadband Wireless Access and applications • The Government of India intends to allot spectrum Blocks in the 2.1 GHz, 2.3 GHz and 2.5 GHz Bands through a fair and transparent process • Separate auction for 2.1 GHz (3 G Auction ) and 2.3 GHz and 2.5 GHZ bands (BWA Auction) • Allotment to be carried out on service area wise basis though there will be a simultaneous auction for all service areas • 3G auction in 2.1 GHz up to four blocks 2x5 MHz One additional block reserved for BSNL/MTNL • 4 blocks of unpaired 20 MHz in2.3 and 2.5 GHz. One block allocated for BSNL/MTNL remaining 3 blocks to be auctioned

12. Contd. • As India braces for 3G roll out, newer and value added applications will be possible through this platform and vendors and developers will have untapped opportunities • Similarly in BWA ample opportunities will be available for such applications

13. TRIPLEPLAY SERVICES • Broadband Triple play converged services (data/video/telephone) permitted for UASL Licensees. • IPTV holds a promising future for India. • Target of achieving 20 million broadband by 2010 could also be helped by IP TV • Major service providers are planning roll out of triple play including IP TV

14. Next Generation Network and Services • Major Telecom Players have started switching towards IP based Next Generation Networks • Korean companies can venture with Indian companies to offer NGN Networks /equipments • Some of the NGN services that will find very good market in the country are Real Time voice and video conversational services, Audio video and Text conferencing, content delivery services such as radio / video streaming, Video on demand , broadcast IPTV, messaging etc

15. Cell phones , 2G & 3G and CPE for BWA • Korean companies have significant market share in cell phone handsets. • India expects 500 million cell phones by 2010 • The launch of 3G holds a promise for good business in this segment

16. Passive Optical Networks and FTTH • Leading new technology for broadband access promising bandwidth for new generation applications such as HDTV , interactive gaming etc • Korean companies have expertise of deployment in their country . It has gained reputation for high performance, low cost and exceptional stability • Indian Telecom Service Providers have plans for its deployment in the country e.g. Reliance in Mumbai

17. Value added services in Mobile segment The following services are popular in India • Personalized service like ringtone download • SMS based services • Mobile TV • Video on demand • games

18. TRANSITION FROM IPV4 TO IPV6 NETWORK • Korean Govt. has planned for full migration to IPV6 by 2011 • India is also planning to move toward IPV6 keeping pace with international community • Korean companies can explore this important segment of business in India since they are the leading players in this area. • Lawful Interception Systems in India to be upgraded to IPv6 • By December 2010 all new equipment shall have to be IPv6 compliant

19. Voice on IP protocol (VOIP) and Internet Telephony • Voice on IP permitted to NLD/ILD for transportation of traffic within their networks. • Phone to phone internet telephony permitted to UASL licensees. • Restricted internet telephony permitted to ISPS. • Proposals under consideration to further liberalize internet telephony. • Internet Telephony and voice hold a promising future for companies and players in this segment.

20. SECURITY APPLICATIONS • More and more IP networks are being introduced in the Indian telecom network there is a good requirement of security applications from the service provider, security agencies • To name a few those required by ISPS / NLDs/ ILDs for their IP operations.

21. BRIDGING THE DIGITAL DIVIDE • A major chunk of Indian Population resides in rural areas • It has thrown a challenge to provide rural connectivity for voice, video and data. • The telecom companies are encashing this opportunity and the rural India has started giving them good revenues and profitability • There is lot left for businesses in rural India and telecom has a major share left into it • Korea can venture to offer a technology suiting to rural India

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