Mobile Broadband- Outlook 2015

1. Mobile Broadband-Outlook 2015 Prepared By: AnuragBahadur(10810013) BidyutSaikia (10810016) VivekVerma (10810073)

2. Contents • India Growth Story • Telecom leading infrastructure growth in India • Mobile broadband service is the way forward • Mobile broadband catalyst for changing business dynamics • Key Enablers for driving uptake of mobile broadband

3. India Growth Story

4. India is the largest democracy in the world with a population of over 1.2 billion. • In the past 2 decades, India has seen sustained high economic growth. • Currently India is the 4th largest economy behind US, China and Japan in PPP terms. • Between 2007 and 2020, India’s GDP per capita in USD terms will quadruple, and that the Indian economy will surpass the United States (in USD) by 2050 Source: Goldman Sachs

5. Comparison of GDP

6. India is less export oriented amongst BRIC nations

8. Pre and post liberalization

9. Services, Inbound Investment and Consumption Driving India’sGrowth • Services-India’s services sector stands out for the size of its contribution to GDP and its dynamism. Communication and banking are among the fastest growing segments. As per Confederation of Indian Industry, services sector accounted for 59.6 per cent of the overall average growth in GDP in the eight years between 2000-01 and 2007-08. • Foreign Direct Investment- Indian policy on FDI has been liberalised progressively over the last two decades. Initiatives have included opening up of new sectors to FDI, raising the FDI caps in sectors already open to investment and procedural changes to enhance FDI flows. Some of the sectors that have attracted the biggest share of FDI include services, telecommunication, computer software & hardware and housing & real estate and power.

11. Consumption • India has a burgeoning middle class, which is estimated to be around 300 million. • Two-wheelers and passengers vehicles in India-6.2 million units in FY 2003 to 11.4 million units in FY 2009 • 20-29 age group there will be over 210 million people by 2015 • India’s private domestic consumption as share of GDP, at 57 per cent in 2008. Source: Mckinsey Global Institute

12. Infrastructure is the biggest challenge as well as opportunity • Power deficit, • Under capacity in the port sector, • Investment backlog in railways • Low penetration of broadband services in India • Rs.22.5 trillion in infrastructure during the 11th five year plan (2007-2012) • Rs.2.9 trillion in Telecom Sector alone. • 12th five year plan to need Rs. 46 trillionin infrastructure as estimated by planning commision.

13. Telecom leading infrastructure growth in India

14. Facts of Telecom industry • The telecom market has been growing at a CAGR of approximately 30 percent since 1995. • Mobile services which have grown at a CAGR of more than 117 percent during the period 1995-2009. • Indian telecom service sector contributed approximately 2 percent of the GDP in FY 2008-2009 and expected to grow further. • The telecom subscriber base- 601 million as of April 2010(Second largest telecom market) • The teledensityhas grown from a mere 1.3 percent in 1995 to over 50 percent asof April 2010. • Due to presence of 8-9 operators per circle the rates are one of the lowest.

15. Global Majors Mobile Service Provider: • Etisalat • Batelco • Telenor • NTT DoCoMo Manufacturing Operations in India: • Flextronics • Ericsson • Nokia • LG • Motorola

16. Mobile services driving telecom growth • The mobile services have been growing at CAGR of 65 percent over the last 5 years. • The total number of mobile subscribers surpassed the total wire line subscriber in 2004 • Since 2004 wire line service has been experiencing negative growth.

20. More than 500 million un-served population located mainly in rural areas with moderate to low capacity to pay for the telecom services.

21. Factors favoring the growth: • extremely low tariffs, • availability of ultra low cost handsets, • encouraging regulatory environment, • increasing income levels • and change in consumer behaviour

25. Composition of Data Revenue – Indian GSM Industry

26. Non-availability of broadband is an impediment to growth ofdata services • High cost involved for both the operators and subscribers • During 2005 to 2009 • Wire line broadband growth: 7 million • Mobile subscribers: 14 million(monthly additions in 2009)

28. Cause Analysis: An opportunity for Mobile Broadband • Least broadband penetrated markets with current penetration of less than 1 percent. • Low PC penetration • Limited wire line infrastructure • High tariffs • Limited presence in rural area. • The legacy wireline infrastructure is not scalable for providing high speed broadband services

29. wireless based broadband Review • 149 million mobile subscribers • 2 million data card subscribers • Lack of high speed access to data through current GPRS, EDGE and CDMA 1X technologies deployed in India.

30. India striding towards mobilebroadband services • Rs.1.06 trillion revenue from 3-G auction. • BWA(Broadband wireless association) and 3-G services to be launched. • 3G will drive mobile broadband in India for next 3-5 years services

35. wireless broadband using technologies like TDD LTE / WiMax are more likely be an economic alternative for the expensive wireline based broadband services

36. Mobile Broadband Service : The Way Forward • Catalyst for business-model innovation • Enormous long term potential • Enhanced connectivity • Phenomenal potential in healthcare, retail, financial services and so on.

37. Driving factors in India • Demand side factors • Supply side factors

38. Demand Side Factors • 600+ million subscribers • Availability of low cost handsets • Lack of availability of broadband services • Existing 3G enabled handsets • Young demographic profile • Enterprises • High use of VAS by other sectors

39. Supply Side Factors • Better business case for wireless • Hyper competitive environment

40. Customer Segments • Enterprise • Non-enterprise – Urban and Rural

41. Urban Costumer Segment • 45% of Indians in urban areas by 2050 • High propensity to pay for premium prices

42. Key Applications for Urban Segment • Internet browsing and Mobile Social Networking • Area information • Video calling • Mobile downloads • Mobile banking and commerce • Tele-counseling services

43. Rural Costumer Segment • Two-thirds of India's consumers in rural areas • Spending power increasing steadily • Mobile utility applications • E-Governance • Information related to farming • Remote access to education and healthcare

44. Enterprise Customer Segment • New delivery channels • New consumer markets • Productivity enhancements • Cost savings • Teleworking

45. Mobile Broadband Services by Customer Segments

46. MBS Data Services Composition-2015

47. Mobile broadband catalyst for changing business dynamics

48. Brief Info • Mobile broadband services are set to change the existing telecom market landscape in India following the launch of new services and emergence of new business models. • Broadly from the standpoint of telecom industry, over the short term impact of mobile broadband services would be in form of additional business for engineering firms, network infrastructure firms and equipment vendors for rolling out the network. In addition, venture backed content and technology startups are likely to emerge. • VAS value chain players (content developer, aggregator and technology enabler) are likely to call for investment to the tune of Rs. 12 billion over the period of 5 years ending 2015. Over medium to long term, service innovations and new business models will emerge to deliver advanced services for the media, health, education and other sectors.

49. Mobile Broadband Value Chain

50. Roles - MBS Value chain Players