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Telecom Industry High on Opportunity

Explore the thriving telecom industry in India, with its high growth potential, key players, and numerous business opportunities. Discover why India is a promising market and find contacts within the industry.

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Telecom Industry High on Opportunity

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  1. Telecom Industry High on Opportunity

  2. Telecom • India - An Overview • Market and Growth Potential • Players • Opportunities • Why India? • Contact in India

  3. Telecom • Population • States/UTs • Geographical Area • Languages recognised • Business language • Per Capita Income** • GDP** Over 1 bn 35 3.3 mn sq kms 22 English US$ 534 US$ 650 bn Source:CSO Statistics **(at factor cost & at current prices) 1USD=43.54 INR (as on July 4, 2005)

  4. India - Fast pace Growth • Largest democracy • 4th largest economy by PPP index • 6th largest energy consumer • ForEx reserves skyrocket from US$ 42 bn (2001) to US$ 133 bn (February, 2005) • GDP growth to continue between 6-8% • 3rd largest economy by 2050: Goldman Sachs • Leading in IT & ITES • Oil & Gas and Biotechnology sunrise industries

  5. India - Leading the world • Hero Honda - largest manufacturer of motorcycles • Moser Baer - among the top three media manufacturers in the world • Pharmaceutical Industry - 4th largest in world • Walmart, GAP, Hilfiger sources more than USD 1bn worth apparel from India • 100 Fortune 500 have set R&D facilities in India including GE, Delphi, Eli Lilly, HP, Heinz and Daimler Chrysler

  6. Telecom • India - An Overview • Market and Growth Potential • Players • Opportunities • Why India? • Contact in India

  7. Life Cycle Stage of Indian Telecom Dynamic competition Identity crisis Refocus Rumblings Equilibrium • Fully adjusted marketplace • No distinction between incumbents and challengers • Wide range of customer choice • Normal market forces apply • Industry consolidates • Mobile fixed crossover • Competitors find niche or die out • Industry settles • Greater emphasis on shareholder value • Focus on customer satisfaction • Traditional assumptions challenged • Marketing and sales focus • Regulator vs Provider conflict • Increasing competition • Losing key competencies • State regulated firms • Strategy heavily influenced by Government and Regulators • Corporate values based on public interest • Limited customer choice • Threats of privatisation • Technological advances lead to substitutes • Niche players evolve / Call-back operators provide service • Regulators formed • Competition begins • An argument for ‘Strategic Partnerships’ National Telecom Policy, 1994 New Telecom Policy, 1999 Unified Licensing Regime 2001 2003 2000 1999 2002 2004 Upto 1994 1994 1995- 1996 1997 1998 Foreign Promoter Exits – Firsy Pacific, TIW, Vodaphone Foreign Promoter Exits – Bell Canada, British Telecom, Millicom, Shinawatra, Swisscom, Telecom Italia, Telekom Malaysia, Telia, Telstra, Vodaphone Indian Promoter Exits – RPG, Escorts Indian Promoter Cash-Outs – HFCL, Max, RPG, Usha

  8. Indian telecom– on the cusp of paradigm shift • Revenue to increase 3 times in the next 5 years • Current teledensity of 8.8 % set to increase to 20% in the next 5 years beating • Government targets by 3 years • Growth rate about 2.5 million subs per month • Mobile subscriber base has surpassed the fixed lines

  9. Telecom Market • 7th largest telecom network in the world • Size (2003) US$ 9 billion 2010 (projected) US$ 23 billion • Telecom network growth rate 30% • Fixed lines (Dec, 2004) 44.76 million • Wireless connections (Dec, 2004) 48 million

  10. Telecom Services Market • Share in total revenue of • Wireline services to fall from half to 30% • Wireless services to rise to half • Data revenue to rise from 2% to 8% Over next 5-8 years

  11. Switching Infrastructure Other Private Operators MTNL BSNL • Switching capacity of 60 million fixed network As on September 2003

  12. Transmission Infrastructure Microwave base 0.15 million route km Optical fibre base 0.5 million route km

  13. Telecom Infrastructure - Enormous Scope • Urban teledensity 18.2% • Rural teledensity 1.5% High on Growth Bound to spread into rural India

  14. Rising Teledensity & Telephone Subscribers • India is targetting 250 million users by 2007 • India needs $30 billion to meet a target of one phone for every five people • by 2010 • Total telecom revenues expected to almost triple from US$ 9 billion in 2002 to US$ 23-25 billion by 2007.

  15. Telecom Equipment Market 2004 - 08 (estimated) • Telecom equipment market size US$ 19.4 billion • Telecom handset market US$ 8.4 billion size

  16. The Mobile Market • Subsciber base : Almost 1.5 million wireless subscribers added every month • GSM 37.37 mn • CDMA 11mn • Number of networks(GSM) 70 • Number of cities covered(GSM) 2000

  17. Telecom • India - An Overview • Market and Growth Potential • Players • Opportunities • Why India? • Contact in India

  18. Service Providers Reliance Hutch Bharti Tatas Reliance BSNL GSM service providers BPL CDMA service providers Hexacom IDEA Aircel HFCL Shyam Spice MTNL Escotel

  19. Telecom • India - An Overview • Market and Growth Potential • Players • Opportunities • Why India? • Contact in India

  20. India - An attractive and lucrative destination (1991-2003) FDI in Telecom US$ 2 billion 20% of total FDI related to telecom

  21. Huge Demand Potential Low teledensity levels indicate a huge untapped market.

  22. Invest in India Intra-Circle and Acquisition Guidelines provides increasing opportunities for investor stakes

  23. India outshining China India Vs China in comparable years of service In millions In the 9th year of wireless operation China 6.8 million India 28 million

  24. Telecom • India - An Overview • Market and Growth Potential • Players • Opportunities • Why India? • Contact in India

  25. India Advantage India -an emerging destination for software, IT enabled services and tourism Share of the services sector in GDP to rise to 60% by 2020

  26. Demographic Advantage By 2020 Working age population to rise to 65% Urban population to rise to 40% 30-40 mn people join middle class every year

  27. National Telecom Policy (NTP) - 1999 • Migration from fixed to revenue share license fee regime • Liberalised long distance sector Impact of NTP-99 on mobile subscriber uptake

  28. Policy Advantage • FDI limit increased from 49% to 74%. • India needs US $30 bn to increase tele-density to 20% by 2010 • 100% FDI permitted under automatic route in the manufacturing sector • Virtually complete deregulation • Unified Access Service License • Interconnection Usage Charge (IUC) • Broadband Policy announced. Targets 20 million broadband subscribers by 2010. • Exemption from customs duty for import of MSCs(Mobile Switching Centres)

  29. Telecom • India - An Overview • Market and Growth Potential • Players • Opportunities • Why India? • Contact in India

  30. Contact in India Confederation of Indian Industry 249 -F, Sector 18 Udyog Vihar Phase IV Gurgaon 122015 Haryana, India Tel 0091 124 5014060-67 Fax 0091 124 5014080/5013874 E mail sabyasachi.patra@ciionline.org

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