Colombo, Sri Lanka, 7-10 April 2009
Marketing & NGN: Contextualizing to Emerging market needs
Mohan Krishnan,IMRB International
FORUM ON NEXT GENERATION STANDARDIZATION
(Colombo, Sri Lanka, 7-10 April 2009)
Colombo, Sri Lanka, 7-10 April 2009
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Agenda
What is Anywhere?Emerging market situation: Case of IndiaImplications for NGN rollout and marketing
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Who are we?
One of the oldest Market Research company in South Asia – IMRB, LMRB & part of £7.5 Bill WPP Group Plc.,Partnering in India & Middle East with Yankee Group, official industry Analyst for ITU
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What Is Anywhere?
Our vision for how ubiquitous
connectivity transforms consumers,
enterprises and the world we
live in.
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Anywhere Is a Revolution
Battles underway and ahead will transform the
world we live in.
It will bring the largest technology
change in our lifetimes.
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Anywhere Will Surpass the Internet’s Impact
Internet:1995 to 2005
Place Work and home
Device PC
Connectivity Narrowband
People affected1 billion(2005)
Internet:1995 to 2005
Anywhere:2005 to 2015
Place Work and homeAnytime and
anywhere
Device PC Any device
Connectivity Narrowband NGN Broadband
People affected1 billion(2005)
2 billion(2012)
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The Five anywhere consumer segments
Actualized Anywheres are the most Anywhere in their behaviorsOutlet Jockeys are Anywhere on the go, but not at homeDigital Shut-ins are somewhere at homeTechnophytes are later adopters, driven by price cutsAnalogs are uninterested in technology but will grudgingly be pulled along—eventually
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Consumers’ Anywhere behaviours are in transition
Connectivity behaviors are undergoing change in all regions as new services emergeThese are more powerful differentiators than conventional demographic segmentation methodsProviders of services must understand the varying needs and attitudes of consumers in their market, and tune offers differently
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Where Will Anywhere Happen?
16 countries reach the Anywhere tipping point by 2012
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India : One of the few growth markets this year
India likely to overtake Italy, France and Germany’s GDP by 2015
Indian economy would be performing better than Brazil and Russia in this front.
Percentage Distribution By Age
33
29
29.4
27
20
21
20.51
26
28.29
29.3
32
16
15.51
15.66
17
5.3
5.67
6.417
5
0% 20% 40% 60% 80% 100%
2001
2005
2010
2020
Years
Percentage
Below 14 yrs 15 to 24 25 to 44 45 to 65 65 & above
30% of India’s population will be between 25-44 years of age in 2020
The young and earning age offers huge potential
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Th
e d
irecti
on
of
ch
an
ge
Th
e d
irecti
on
of
ch
an
ge
THETHE CLIMBERSCLIMBERS74 mln 74 mln
HHsHHs429 mln 429 mln peoplepeople
THE VERY THE VERY RICHRICH
2.6 mln HHs2.6 mln HHs15 mln 15 mln peoplepeople THE CONSUMING THE CONSUMING
CLASSCLASS46 mln HHs46 mln HHs265 mln people265 mln people
THE THE ASPIRANTSASPIRANTS33 mln HHs33 mln HHs
192 mln people192 mln people
THE THE DESTITUTEDESTITUTE
24 mln HHs24 mln HHs140 mln people140 mln people
A huge baseA huge base
Source : Indian Market Demographics, NCAER Source : Indian Market Demographics, NCAER
2001-022001-02
82 mln 82 mln HHsHHs472 mln 472 mln peoplepeople
5.2 mln 5.2 mln HHsHHs30 mln 30 mln peoplepeople
76 mln HHs76 mln HHs432 mln people432 mln people
20 mln HHs20 mln HHs117 mln people117 mln people
17 mln HHs17 mln HHs95 mln people95 mln people
2006-072006-07
Growing top 3 segments
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The Internet Usage Hierarchy
36
50
72
85
205
250
0 50 100 150 200 250
Active User
Ever used Internet
PC Literates
English Knowing
Literate Population
Urban Population
In MillionsIn Millions
SourceSource: I-Cube 2008, IMRB International: I-Cube 2008, IMRB International
A Sept 2008 study by IMRB estimated Internet user in rural India at 5 million (out of 750 million)
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Internet user market
21.1
29
36
11.27.5
4.32.2
50
8.7
59
15.8
30.8
42.2
52.9
62
72
11.9
16.4
32.2
42
4.9
2000 2001 2003 2004 2006 2007 2008 2000 2001 2003 2004 2006 2007 2008 2000 2001 2003 2004 2006 2007 2008
In MillionsIn Millions
Knows ComputersKnows Computers Internet Ever UserInternet Ever User Active Internet UserActive Internet User
• A Internet Ever User defined as one who has ever accessed Internet
• This population is already higher than the population of countries like UK, Canada, South Africa, Spain, etc.
Base: All India EstimatesSource: I-Cube 2008
SourceSource: I-Cube 2008, IMRB International: I-Cube 2008, IMRB International
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Application usage has diversified significantly in recent times
Purpose of Internet Access Percentage of Urban Users
E-mail 91%
General information search 76%
Educational information search 49%
Text Chat 46%
Online Gaming 41%
Online jobsites 37%
Music/Video on the Internet 32%
Financial information search 21%
Book railway tickets on the Internet 21%
Online banking 20%
Online NEWS 13%
Internet Telephony/Video Chat/Voice Chat 13%SourceSource: I-Cube 2008, IMRB International: I-Cube 2008, IMRB International
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E-commerce is growing rapidly
MARKET SIZE FOR THE YEAR2006-07
(USD Million)
2007-08(USD Million)
Online Travel Industry 1100 1400
Online Non-Travel Industry 316 442
eTailing 170 221
Online Classifieds 108 164
Paid Content Subscription 4 6
Digital Downloads 34 51
B2C/ C2C E-Commerce Market 1416 1842
SourceSource: I-Cube 2008, IMRB International & IAMAI : I-Cube 2008, IMRB International & IAMAI
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43% 44%52% 46%
39% 36% 37%
22%
30%23%
27%31% 30% 26%
20% 20% 22% 25% 27%
6% 7% 8%2% 1%
19%
30%
4%6%
3% 5%8% 3% 2% 2% 2%
0%
20%
40%
60%
80%
100%
2000 2001 2003 2004 2006 2007 2008
Cyber café Home Office School/College Others
1.4 mn 3.1 mn 4.9 mn 7.5 mn 13.2 mn 15.4 mn17.9 mn
Public access has been the main reason for growth of user base
SourceSource: I-Cube 2008, IMRB International : I-Cube 2008, IMRB International
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However, network deployment lags demand
Access Points Available Internet Usage/connection
% penetration
Desktop/Laptop
~ 54 mn 7.6 mn 14%
Mobile (GRPS/Edge)
400 million (88.27 million
enabled)
6-8 million <2% (8-10% of enabled)
Cyber Cafes 0.166 million 0.166 million 100%
Common Service Centres of Govt.
32,145 25,000-26,000 75-80%
PCOs 6.27 million 200 Negligible Source: IMRB analysis
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And, BB deployment target continues to be missed
3
9
20
5.84.4
3.12.11.30.40.10
5
10
15
20
25
2003 2004 2005 2006 2007 Jun-08 Feb-09
2010
Target number ofBroadband users (in mn)
Achieved number ofBroadband users (in mn)
9.9% MoM
3
9
20
5.84.4
3.12.11.30.40.10
5
10
15
20
25
2003 2004 2005 2006 2007 Jun-08 Feb-09
2010
Target number ofBroadband users (in mn)
Achieved number ofBroadband users (in mn)
9.9% MoM
India Technology share in Broadband penetration
Technology
DSL Cable Ethernet Fiber Radio+Other
Mar 2007 83% 10% 3% 1% 3%
Sep 2007 81% 12% 4% 1% 2%
Sep 2008 86% 9% 2% 1% 2%
Source: TRAI
Source: CII-IMRB-IBM study 2004
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Policy makers in emerging markets will be forced to give priority to BB growth
Congress Manifesto: All villages connected to broadband in next three years. BJP Manifesto: Create 1.2 million IT-enabled jobs in rural areas, drastic reduction in computer prices, broadband connectivity to every village in five years. Promote ‘open standard’ and ‘open source’ software.
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LLU & BB Between 2004 to 2007 the numbers of wireline telephone connections have reduced from 40 mn to 33 mn.
Connections in urban areas have reduced from 26 mn to 22 mn With only 25% of network having ability to deliver BB, we can add best add 3.5 million BB subcribers
This year, BSNL launched an initiative to offer wireline connections bundled along with broadband services in Bangalore. Result: 0.1 mn new connections out with 60% BB subscribers.
38
33
30313233343536373839
Wireline with LLU/broadbandcoupled
Wireline presently withoutLLU/ broadband coupled
Connections (mn)
Rs 120 trillion loss since 2004
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USOF
The USOF has about USD 1.5 billion in undistributed funds (In 2009)
Source: LIRNAsia
Need innovative mechanisms to enable direction of funds to BB
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Shared access through Govt. intervention in rural markets: CSC – Common Service
Centre
National eGovernance Plan (NeGP) envisions a “web-enabled Anytime, Anywhere access” to information and services in rural India
100,000 CSC to be rolled outGovt. saved money in PPP auction given enthusiasm of private players
BB connectivity is a big issue Multiple technologies being deployed which will create problems later
Chicken-egg issue – connectivity & contentHistory of past failure – need to provide a lesson
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Emerging Markets Do Not Support Traditional Subscriber-Centric Business Models
AR
PU
or
Eq
uiv
alen
t
Number of Users
Vonage
Verizon Wireless
Vodafone
China Mobile
Yahoo!
GoogleSkypeSling Media
Source: Company Annual Reports and Yankee Group
Value in the Subscriber
Value in the Community
eBayFacebook
YouTube
TIM
H3G
Sprint
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More important to drive value from community – mobile tariff example
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MVAS ecosystem provides some clue to drive utility of NGN
Source: IMRB-IAMAI study, June 2008Rs. 1 cr = 10 Million, 1 USD~ Rs.50
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Guidelines for Technology vendors & Service providers
Develop your solutions to address price sensitivity in the Indian market.
Incorporate robust professional and managed service capabilities into the market solutions.
Design solutions that can overcome deficiencies in supporting infrastructure, such as electricity and available backhaul solutions.
Anticipate and capitalize on opportunities that will emerge as low-cost network computing devices become available.
Capitalize on opportunities to export capabilities developed in India to other emerging markets.
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Guidelines for Technology vendors & Service providers
Recognize the strong correlation between broadband penetration and economic prosperity.
This necessitates accelerated licensing and a focus on enabling technology.
Seed opportunities to commercialize universal service initiatives in rural areas. Initiatives such as eHealth and distance learning have broad applicability across many emerging markets.
Aim for rural broadband initiatives to bolster existing industries.