Statistical Overview of the Indian Telecoms & Value Added Services Market

Anuj Khanna, CEO, Wireless Expertise

Monetising Mobile Conference, London, September 2010

© Wireless Expertise Ltd, 2010. Market Report, “The Indian telecommunications Market”

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Population: 1.2 billion

GDP: $1.3 trillion

Mobile Subscribers: 584 million

Wireline Subscribers: 37 million

Urban Teledensity: 120%

Rural Teledensity: 24%

Internet Subscribers: 16 million

Wireless Data Subscribers: 178 million

Headline Numbers for India

© Wireless Expertise Ltd, 2010. Market Report, “The Indian telecommunications Market”

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Economic Growth

600 700 808 9231168

1314

8.5%7.5%

9.4% 9.6%8.7%

6.7%

0

300

600

900

1200

1500

2004 2005 2006 2007 2008 2009

0%

2%

4%

6%

8%

10%

12%

Nominal GDP (USD bln) Real GDP Growth% (Y-o-Y)

Indian Economy – GDP and Y-o-Y Growth

Note: Figures as of March end for each year

7.4% growth forecast for 2010

© Wireless Expertise Ltd, 2010. Market Report, “The Indian telecommunications Market”

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Young and vibrant demographics

Indian Population – Break-up by Age Groups

18%

15%

11%

7%

7%

20%

22%

0-9 19-Oct 20-29 30-39 40-49 50-59 60+

17%

15%

12%

9%

9%

19%

19%

Population 2005: 1.1 billion Population 2015E: 1.3 billion

© Wireless Expertise Ltd, 2010. Market Report, “The Indian telecommunications Market”

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Mobile Subscriber Growth

Indian Mobile Market - Subscribers and Y-o-Y Growth

Note: All figures as of March end for each year

34 5299

165

261

584

392

55%

89%

67%58%

49%50%

0

200

400

600

800

2004 2005 2006 2007 2008 2009 2010

0%

20%

40%

60%

80%

100%

Mobile Subscribers (mln) Subscriber Growth% (Y-o-Y)

20 million new subscribers being added every month

© Wireless Expertise Ltd, 2010. Market Report, “The Indian telecommunications Market”

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Lower ARPU vs. Larger user base

Indian Mobile Market – ARPU (Q-o-Q)

220205

185164

144

11199 92 89 82 76

131

0

50

100

150

200

250

Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10

AP

RU

(IN

R p

er

Mo

nth

)

GSM ARPU CDMA ARPU

© Wireless Expertise Ltd, 2010. Market Report, “The Indian telecommunications Market”

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Mobile Market Share

Indian Mobile Market – Operator Share

Break-down of ‘Others’

Aircel 6.31%

MTNL 0.87%

Unitech 0.73%

Sistema 0.65%

Loop Mobile 0.49%

S Tel 0.17%

HFCL 0.06%

Videocon 0.01%

Etisalat 0.00%

Total* 9.28%

17.26%

11.89%

11.29%

10.92%

9.28%

17.53%

21.84%

Bharti RelianceVodafone BSNLTata IDEA / SpiceOthers*

© Wireless Expertise Ltd, 2010. Market Report, “The Indian telecommunications Market”

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Indian film content drives mobile entertainment

Ringtones

Ringbacktones

Images

Animations

Competitions

Trvia

Games

Videos

© Wireless Expertise Ltd, 2010. Market Report, “The Indian telecommunications Market”

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Mobile Value Added Services Market

Indian MVAS Market – Contribution of SMS vs. Non-SMS

64%

36%

SMS Non-SMS

73%

27%

SMS Non-SMS

2009 (INR 90 billion) 2011E (INR 142 billion)

Total MVAS Market Size: ~INR 90 billion (2009) & ~INR 142 billion (2011E)

Sources: FICCI, Wireless Expertise Analysis

© Wireless Expertise Ltd, 2010. Market Report, “The Indian telecommunications Market”

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Caller Ringbacktones are big business

Indian MVAS Market – Contribution of Non-P2P SMS Services

8%

9%

18%

20%

45%

CRBT

Voice Portals

P2A SMS and Alerts

GPRS / WAP

Others

Sources: FICCI, Wireless Expertise Analysis

© Wireless Expertise Ltd, 2010. Market Report, “The Indian telecommunications Market”

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Reality TV drives premium message volumes

India’s version of who wants to be a millionaire

Big Boss/Brother

© Wireless Expertise Ltd, 2010. Market Report, “The Indian telecommunications Market”

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Indian Media & Entertainment Market MAP

© Wireless Expertise Ltd, 2010. Market Report, “The Indian telecommunications Market”

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Opportunities in India

1. Large urban high spending user base

2. Growing rural subscriber base

3. Nascent value added services market with a lot of growth opportunities.

4. Young demographics

5. Appetite to partner with western firms who bring in a unique product which can drive volumes.

6. Easy to communicate, English is a commonly used business language in the cities.

7. Consumer demand for basic goods and services is still growing.

8. Large majority of consumers have skipped legacy fixed line services and directly using mobile phones as their main channels of communications.

9. Developing digital media and entertainment industry.

© Wireless Expertise Ltd, 2010. Market Report, “The Indian telecommunications Market”

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Advice for entering into the Indian Market

1. Think Big • You require volume, scale and a mass market proposition.

2. Visit India• Meet the operators, content license owners, aggregators, media

houses and platform providers.

3. Think global and act local• Localise and customise your product / business model for India.• Tweak your pricing strategy to match the Indian consumers buying

power.

4. Test the waters• Invest a little to test the market.• Consider local partnerships

5. India is India• Do not compare it with Brazil, China, Europe or anywhere else.• Have a long term strategy and be patient.

© Wireless Expertise Ltd, 2010. Market Report, “The Indian telecommunications Market”

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Anuj Khanna,

Mobile: +44 7916 056 916

Email: anuj@wirelessexpertise.com

www.wirelessexpertise.com