Social Infrastructure and Technology in India

Zinnov Management Consulting

This report is solely for the use of Zinnov Client and Zinnov Personnel. No Part of it may be quoted, circulated or reproduced for distribution outside the client organization without prior written approval from Zinnov.

Social Infrastructure and Technology in India April 2012

2

India has emerged as one of the leading economies in the world

Top Ten Countries by GDP (USD Tr, PPP), 2011

India’s Position in the Global Economy

• India is one of the fastest growing economies in the world

• Infrastructure has played a significant role in the growth of the Indian economy

• Further plans to invest $1 trillion in 12th five year plan(2012-2017) in the infrastructure sector

15.04

11.29

4.46 4.38 3.08 2.38 2.28 2.25 2.21 1.82

USA China India Japan Germany Russia Brazil UK France Italy

Source: IMF; Planning Commission of India; Zinnov Analysis Note:

Source: NASSCOM; Company Annual Reports; Press Releases; Dataquest; Primary Interviews with Stakeholders in the Indian IT Ecosystem; Zinnov Analysis Note:

3

Along with the overall growth, the IT market has also been growing rapidly

5.7%

-4.5%

5.0%

6.0%

12.0%

13.0%

18.1%

20.7%

-10.0% 0.0% 10.0% 20.0% 30.0%

Worldwide

Japan

United States

UK

China

Brazil

Russia

India

Estimated Growth of IT Markets in 2011 (in USD)

6.9 8.6 10.0 9.2 10.1 12.2

4.7 6.1

8.0 8.4 9.5

11.5

1.4

1.8

2.3 2.7 3.1

3.6

FY06 FY07 FY08 FY09 FY10 FY11

Hardware Services Software

Domestic Indian IT Market, USD billion

27.3

12.9

6.9

4.1

3.4 0

5

10

15

20

25

30

Total LargeEnterprises

SMB Government Consumers

Indian IT Market by Customer Segments, FY11, USD billion

Source: Note:

4

Investments in IT are helping develop the social infrastructure of the country

Healthcare

Education

Training and Skill Development

Smart Cities/ Energy

Citizen Services

Small and Medium Businesses (SMBs)

Financial Inclusion

Transportation

Social Infrastructure in India

Source: News Articles; Industry Reports; Zinnov Analysis Note: 1Health Management Information System

5

The rapid growth in healthcare is being driven by the use of IT

The industry comprises of:

Role of IT in Healthcare

• IT can extend the reach of medical treatment to the remotest parts of the country • IT plays a vital role in bridging the

huge gap between demand and supply of healthcare facilities in India •Government initiatives like the

HMIS1 portal can be useful in better policy formation and health monitoring in the country

Market Size and Future Projections

USD

Bill

ion

U

SD B

illio

n

7

20

0

5

10

15

20

25

2010 2020

90

280

0

100

200

300

2010 2020

Pharmaceuticals

Healthcare

a. Pharmaceuticals b. Healthcare Services c. Healthcare Equipment

Healthcare Education Skill Development Smart Cities/ Energy Citizen Services SMBs Financial Inclusion Transportation

Source: News Articles; Cisco Website; Zinnov Analysis Note:

6

Telemedicine is helping hospitals in India extend their services to the remote regions

To transform the delivery of healthcare and enhance care at a

distance between patients, clinicians and

specialists

Uses the network as a platform, which integrates high-definition video, advanced audio, medical devices, and collaboration tools to deliver the service

Business Objective

Solution

CISCO HealthPresence Solution

Benefits

Solu

tio

n

Patient Terminal

Expert Doctor

Telecommunication


• End-to-end soln. for remote diagnosis

• Helps in scaling across HealthPresence networks

• Enhances productivity and clinical workflow

Live Use Case

• Adopted by Telerad RxDx, a hospital in Bangalore, India

• RxDx is using Cisco’s HealthPresence to provide medical care to patients living in Raichur, North Karnataka

• Benefits: The average number of patients has increased 90 per cent because of telemedicine operations

• Future Prospects: RxDx plans to increase deployment of Cisco’s telehealth services to continue to improve healthcare delivery in remote locations

Source: www.cio.in; Zinnov Analysis Note:

7

Hospitals like Sankara Nethralaya are leveraging cloud computing to make available their digital records to other fellow hospitals

Key Attributes Key Highlights

• Facilitate seamless automated delivery of ophthalmic services across hospitals

Business Objective

• Electronic Medical Records on external cloud to store all data and clinical images

• Make EMR accessible to smaller hospitals based on a pay-per-use model

Key Solution

• Telemedicine using VSAT and e-learning

• EMR based studies through BI

• Mobility solutions leveraged to ensure medical adherence by staying in touch with patients

Other Initiatives

Brings in standardization

Quicker and easier access to data across hospitals

Improved sharing of medical records with academia and pharmaceutical companies for R&D activities

Consistent quality of service followed in clinical processes

Benefits

Technology Partner: TCS


http://www.cio.in/

Source: Note:

8

Indian education system requires significant investments and efforts, which can be driven by the help of IT

About 45% of teachers teaching in schools in India are

not even graduates

61% of schools don’t have access to electricity

Only 17% of schools have computer

Only 39 out of every 100 students reach 10th grade

Dropout rate after elementary education is 44%

One out of every three students in class 5th cannot

read or write


Education in India

Source: News Articles; Zinnov Analysis Note:

9

HP, in participation with NCERT, has introduced Lab-in-box to facilitate a mobile computing center for educational institutions

Objective

Making quality education

accessible to all

Features

Fully integrated mobile solution with minimal

costs

HP

’s L

ab -

in-B

ox

HP - National Council of Educational Research and Training (NCERT) - Lab-in-Box

Technology-equipped classroom housed in a

shipping container

15 HP PCs, printers, wireless connectivity and

a diesel electrical generator

Solution

A mobile computing center that overcomes

the power, space, infrastructure and

equipment challenges of

remote locations

• Remote delivery of classes

• Printing of latest textbooks by downloading them and using network printers

• Tracking school drop-outs

• Access to predesigned education tutorial with different syllabuses

Benefits


Source: Company Websites; Zinnov Analysis Note:

10

Everonn, an education company, is leveraging IT to make education more interactive as well as available to the masses

• Education company focusing on technology-enabled learning through VSAT-enabled virtual and interactive classrooms

• Provides services in the following domains- schools,

colleges, web products, entrance examination guidance, retail, skill development, teachers’ training, education resources, e-governance, animation and gaming and formal education segments.

• Revenues: ~$600 million

Company Profile

• Provides IT solutions to government schools through Build-Own-Operate-Transfer (BOOT) model

• Provides modules for school level education

• Online education for job aspirants in domains such as IT, ITES, Management, Banking and Financial Services at college level

• Provides training in electricals, welding, plumbing, textiles & accessories, etc.

• Developed web products for online education and learning

• Instituted programs for training of teachers and for promoting education in rural India

Services

• Everonn has partnered with the National Skill Development Corporation’s (NSDC) mission

• Launched of International Skills School to skill people

• The average course fee is expected to be approximately $180 (INR 9,000) per person with the course ranging from 30 days to six months in nine sectors - Textile and Apparel, Retail, Hospitality, Automobile, Healthcare, Construction, IT and ITES, Basic Engineering, Multimedia

Partnerships


Source: Government Websites; Zinnov Analysis` Note: : 1National Internet Exchange of India; 2Indian Educational Satellite; 3Indian Computer Emergency Response Team; 4Multiprotocol Label Switching; 5Pan-European Communications Infrastructure Network

11

The National Knowledge Network (NKN) is an initiative by the Government of India to extend information availability with the use of IT

NKN Stakeholder Ecosystem

Educational Institutions

Research Labs (e.g.

CSIR)

NIXI1

National and State

Data Centers

EDUSAT2

Security Organizations (e.g. Cert-

in3)

MPLS4 and Broadband

Clouds

Global Networks

(e.g. GEANT5)

NKN will enable

Establishing connectivity for knowledge and information sharing

Facilitating an ultra high speed e-Governance backbone

Facilitating distance education in specialized fields such as medicine, nanotechnology, etc.

Enabling collaborative research in emerging areas such as climate modeling

Acting as a test bed for research in the area of network and security and delivery models of various services

The National Knowledge Network (NKN) has been established to connect around 1,500 knowledge institutions across the country through high speed data communication network

Present Status and Future Outlook


Source: Note:

12

IT is also playing a role in extending vocational training and skill development across India

Government Controlled

Privately Held

Managed by Government

Hybrid/ PPP Corporates NGO Industry

Association/ Industry Players

Skilling and Training Players

Industrial Training Centers


Source: Primary Interviews, Zinnov Analysis Note:

13

Many enterprises are leveraging IT to provide training to their employees

Classroom Sessions

On-the-Job Training

Workshops

Audio/ Visual Training

• Workers are trained on basics and best practices

• Conducted by mid-level employees, highly experienced internal employees, experts from the industry, etc.

• Focus on shop-floor training, machine usage, maintenance, quality and productivity management

• Conducted by internal/ external stakeholders

• Focus on training on a specific skill-set for a specified period of time

• Mentored by an internal experienced employees

• Slow paced training but most effective

• High on effectiveness than classroom/ workshop training.

• Prevalent in very few enterprises due to initial cost and content structuring

• High acceptability for relevant content

Modes of Training in

Manufacturing Firms


Source: Zinnov analysis, News articles, Industry reports, Company websites Note: 1Aggregate Technical & Commercial

14

The infrastructure for cities/ energy demands huge investments over the next decade

Technology Partnerships

Electricity Distribution Urban Development Schemes

IBM partnership with The Bureau of Energy Efficiency in India to create country’s first smart grid project

R-APDRP: Leveraging IT applications for energy accounting/auditing and IT-based consumer service centers in the power sector

Jawaharlal Nehru Urban Renewal Mission: parameters under consideration include sanitation, sewerage and solid waste management, urban transport, etc.

Smart Homes Smart Traffic

State administration like Kerala and West Bengal government are implementing smart traffic management systems for intelligent policing

Private sector players like Mantri Developers and Lavasa Corporation are tying up with technology companies for smart homes

• A housing shortage of 30 million dwelling units

• 200 million water connections required

• Access to sewage for 350 million people

• Extra 160 GW of power generating capacity

• The number of vehicles on roads expected to increase fivefold

• Over 30% of Indian population living in urban areas

• India added ~2,800 towns in the last decade

• ~30% AT&C1 loss in power sector

• 215 million people in India to migrate to cities by 2015

Current Scenario Expected Requirement/ Shortage by 2020

Key Government/ Private Sector Policy and Initiatives


Source: News Articles; Cisco Website; Zinnov Analysis Note:

15

Cisco’s smart connected community is driving a variety of urbanization initiatives in the country

Multiple Global

Initiatives from India

6,000 people added since 2007

16 VPs and SVPs with Global Roles

104 Directors with Global Responsibilities

722 Patents

Smart + Connected Communities

• An effort to embed networking and internet technologies into buildings and cities

• 827 customer CXOs from around the world visiting the campus in Bangalore

• 35 projects around the world, all of it managed from India

• The EMC office in Bangalore and the Vodafone office in Pune have adopted Cisco’s Smart+Connected Communities technologies

• Cisco’s Bangalore campus - a Smart+Connected Community campus

• Mahindra and Cisco have collaborated in India to build smarter, connected communities. The first project under this initiative intended to be the Mahindra Innovation Park

Cisco has rolled out its smart+ connected solutions for industry, communities, government, homes, etc.


Source: News Articles; IBM Website; Zinnov Analysis Note:

16

IBM has launched The Smarter City initiative in India

IBM – The Smarter City

• IBM is working with cities and governments on issues ranging from transport, water, health care and energy efficiency

• Targeting municipalities and local administrative bodies in cities across the country

• Company currently running pilot projects across cities in India

• Plans to start operations in 40 Indian cities by 2013

As a part of the “Smarter” initiative, IBM has tied up with Ingersoll Rand to provide Remote Energy and Asset Management solutions in India which would drive greater energy efficiencies for organizations

IBM Smarter Cities Challenge • IBM had issued Smarter Cities Challenge grants to

33 cities in the 2012 round of the three-year, $50 million program to help improve conditions in urban environments throughout the world

• Pune and Ahmedabad are the two cities recipient of this challenge in 2012


Source: Company Websites; News Articles; Zinnov Analysis Note:

17

A number of other case studies are also available to highlight the use case of IT in Indian housing/ power segment

Smart Cities

Mantri Developers collaborated with Cisco to develop new ICT-enabled real estate models ‘Mantri Connected Communities and Smart Homes

Similar collaboration between Lavasa, Wipro and Cisco to develop India’s first sustainable, connected and intelligent city

Examples of smart home initiatives by the private

sector

Smart Grid

Siemens won an order from the State Electricity Distribution Company of Maharashtra for the installation of turnkey supervisory control and data acquisition technology for the power distribution networks in eight cities

Expected to improve the availability and transparency of the distribution networks and cut the related power losses by as much as 15 percent

Contract volume includes entire project management along with development, manufacture, implementation and commissioning of supervisory control centers

Help improve grid efficiencies in India

Partnerships

IBM has collaborated with The Bureau of Energy Efficiency (BEE) in India for energy efficiency

The objective of the project is to create a cost benefit analysis for smart grid activities as part of the National Mission for Enhanced Energy Efficiency (NMEEE)

India’s first smart grid project


Source: : Ministry of Information and Communication Technology; News Articles; Zinnov Analysis Note: : 1National e-Governance Plan; 2National Knowledge Network; 3Public Distribution System; 4Restructured-Accelarated Power Development and Reform Program; 5National Mission on Education through Infrastructure and Communication Technology; 6National Population Register; 7Indian Airforce; 8Computerized Inventory Control Project

18

In recent years, the government has been spending on e-governance to improve the citizen services in the country

7,578

1,331 1,200 1,149 1,024 1,000 787

556 156

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

NeGP NKN Automation ofPDS

R-APDRP NME-ICT Project Arrow NPR IAFe-maintenance

Program

CICP(Indian Army)

Investment OutlayAll figures in USD million

1 2

3

4 5 6 7 8

Many IT vendors have established closed relationships with the government to steer the NeGP initiative, for instance, IBSG, the strategic arm of Cisco, has been closely associated with the Department of Information Technology (DIT) to provide advice on accelerating the implementation of NeGP


Source: UIDAI; RFPs; News Articles; Zinnov Analysis Note:

19

The creation of Unique Identification(UID) will help extend services to the unreached strata of the Indian society

Six telecom companies (Aircel, Bharti Airtel, BSNL, Reliance, Tata communications and

Railtel) have been empanelled to provide

Piped Data Services

UID Stakeholder Ecosystem

Contracts for various projects under UIDAI are awarded through tenders

FD

e-Governance Cloud-Infrastructure

Data Centre Infra Management

Logi

stic

s In

terf

ace

C

on

tact Ce

ntre

Interface

Biometric Middleware

UID App Server

Enrolment Authentication

Admin Portal Analytics

Biometric Systems

FD

Biometric Solution Providers

UIDAI will make use of biometric systems to effectively de-duplicate identities 16 companies have been shortlisted including HCL, Accenture, TCS, etc.

Contact Centre System

Contract for setting up and operating contact centers for providing services in official languages has been awarded to Intelenet Global Services

Knowledge Management

HCL Infosystems has been hired for design, development, maintenance and support of intranet and knowledge management portal of UIDAI

UID Central Application

MindTree Ltd. has been chosen as the application software development, maintenance and support partner for the UID central application

Data Centre

Wipro has been hired for supply, installation and commissioning of data centers


Web Portal

TCS has been awarded the contract for the re-designing, development, maintenance and support of UIDAI web portal

Source: Ministry of Information and Communication Technology; RFPs; CSC-India; News Articles; Zinnov Analysis Note: 1Illustrative list; not exhaustive

20

SDCs are being set up across all states and UTs acting as a secure IT infrastructure to host e-Gov. applications and enable seamless delivery of services

The SDCs are being set up on a BOOT4 model with two specified phases

SDC projects are awarded by the

state governments

Current Status • 16 operational SDCs • 2 SDCs in

implementation phase

Design, Supply, Installation and Commissioning Phase1

• Designing of the data centre

• Supply and installation of all IT and non-IT components

• Testing and security assurance

• Application hosting

• Training

• Documentation

Operation and Maintenance Phase1

• System, network and application maintenance

• Backend services (mail, messaging, etc.)

• Back up and restore services

• Bandwidth management services

• Infrastructure management


• Maharashtra • West Bengal • Gujarat • Andhra Pradesh

• Jammu and Kashmir • Mizoram • Haryana • Nagaland

• Kerala

Illustrative list of IT companies which have won SDC contracts

Source: Government Websites; News Articles; Zinnov Analysis Note: 1Crime And Criminal Tracking Network System

21

IT is also being leveraged to bring efficiency and transparency in the governance system Healthcare Education Skill Development Smart Cities/ Energy Citizen Services SMBs Financial Inclusion Transportation

• E-literacy and e-usage increased from 20% to 95% • 10 tonnes of paper saved in 18 months • 1800 Acts/Rules and 1000 Government Orders are now

available in the knowledge repository for ready access/sharing • Overall improvement in efficiency

Integrated Workflow and Documentation Management System

(DigiGov) developed by TCS

To enhance accountability and reduce paperwork and

movement across hierarchies

Gujarat Government

• Wipro has been selected by the MHA for developing the core software for a crime and criminal tracking network system

• Also to develop core application for digitization of criminal records

• Once deployed, the project will cover 14,000 police stations, 6,000 higher offices, and other police departments

To create a nation-wide IT-enabled criminal tracking

system

Ministry of Home Affairs

CCTNS1, a project executed by Wipro

• A delivery model, bridging the digital divide, access to the government for all at all times with single sign on

• Resulted in increased transparency and accountability of government interactions and hence enhanced citizen satisfaction

• Scalable kiosks model under PPP for employment to citizens • Replicated successfully in Madhya Pradesh and Bihar

To offer citizen centric services through a single

window

Andhra Pradesh Government

APOnline, an e-governance gateway developed by TCS

Source: e- Courts; National Crime Records Bureau; News Articles; Zinnov Analysis Note: 1National Rural Employment Guarantee Act; 2National Institute of Open Schooling

22

Illustrative list of government projects currently under implementation by key private players Healthcare Education Skill Development Smart Cities/ Energy Citizen Services SMBs Financial Inclusion Transportation

Working on a project for Employees State Insurance Corporation which will connect 1,200 dispensaries, 400 hospitals and 100 offices.

lementing the eBiz Project of the Department of Industrial Policy and Promotion. Involves creating a platform to give the business community access to fast information and simplified procedures.

Partnering SBI and Sahaj on Financial Inclusion project to take banking services to NREGA beneficiaries through 28,000 CSCs

Collaborating with NIOS to introduce IT curriculum in six selected vocational institutes and with the Railways for unreserved ticketing solution; Implementing SWAN and SDCs with many states

Providing its technology to the External Affairs Ministry for the Passport Seva Project to automate issuance of passports and cut delays, as well as to the Home Ministry for police reform projects.

TCS

WIPRO

INFOSYS

ORACLE

CISCO

Wipro is working with the Ministry of Home Affairs to implement the CCTNS state MMP across the country and has won three SDC deals. It is an active player in setting up CSCs in rural areas

Oracle is partnering with SBI and Sahaj on Financial Inclusion project to take banking services to NREGA1 beneficiaries through 28,000 CSCs

Cisco is collaborating with NIOS2 to introduce IT curriculum in six selected vocational institutes and with the Railways for unreserved ticketing solutions. It is implementing SWAN and SDCs with many states and is the key player in the R-APDRP scheme

TCS is providing its technology to the External Affairs Ministry for the Passport Seva Project to automate issuance of passports and cut delays, it is implementing and managing SDCs and SWANs in many states

TCS

WIPRO

ORACLE

CISCO

Infosys is implementing the eBiz Project of the Department of Industrial Policy and Promotion. This involves creating a platform to give the business community access to fast information and simplified procedures

INFOSYS

23

With the second largest base of SMBs worldwide, India is a land of MSMBs with significant economic contribution

~29.7 Mn

Micro enterprises 1-10 Employees in

Home/ office Setting

Small enterprises 11-100 employees

Medium enterprises 100-1000

employees

~16.0 Mn

~1.3 Mn

8 Mn

Russia

14 Mn

26 Mn

47 Mn

50+ Mn

Brazil

US

India

China

Of total GDP contribution

Of all enterprises

Of the total workforce

Of total manufacturing output

Of total exports from India

17%

98%

40%

45%

40%

Large Enterprises (Total 5,000 Units)

MSMBs (Total 47 Mn Units) Government Consumers

(Total 220 Mn HHs)

IT Spend Contribution = 47%

IT Spend Contribution = 25% IT Spend

Contribution = 15% IT Spend

Contribution = 12%


Source: Zinnov Analysis Note:

Source: News Articles; Zinnov Analysis Note:

24

Cloud based Cluster Area Network (CAN) established in the Tirupur is allowing SMBs to leverage IT at an affordable cost

Tirupur Export Association

HW Vendors SW Vendors

Service Providers

Home- grown ERP solution on Azure platform

Cloud based ERP

• One time fee of INR 10,000 followed by a monthly fee of INR 3,000-4,000

• Includes modules such as order monitoring and inventory management

Implementation

Maintenance Help spread awareness

Provide Training

G-Tech Solution Special Purpose

Vehicle

• Facilitate Training • Spread Awareness • Identify relevant

implementation partner

• Reduce the cost of owning solutions such as ERP

• No cost of maintenance at the firm level

• Helps better track consignments and avoid delayed shipments and associated cost of air shipments

• Helps firms compete effectively with competitors in Bangladesh and China

Benefits

Customize

4,000 micro and small manufacturing firms can make use of this initiative by TEA

Tirupur is a textile cluster with export oriented firms. The cluster losses appox. INR 10 billion due to delayed shipments and lack of effective order management

Cloud Platform


Source: News Articles; Company Websites; Zinnov Analysis Note:

25

IT vendors are providing solutions to help SMBs grow faster in the country

• Offering: Broad functional ERP/ CRM capabilities, delivered on-demand as a software-as-a service (SaaS)

• Key highlights: Powerful,

integrated analytics to help SMBs make better and more informed decisions at lowered price ($89 per user per month)

• Customer focus: SMBs that need to replace point solutions, manual processes and spreadsheets

• Focus verticals: Professional services, Wholesale distribution, manufacturing

• Offering: Vertical Specific communication solutions for SMBs

• Key highlights: EMI for equipment will be clubbed with monthly rental of Airtel

• MoU with a bank to provide financial assistance to SMBs to buy the solution

• Consultancy services to understand the needs of the customers and also provide a maintenance contract

• Focus verticals: Agricultural implements, Diesel engine, Motor and pump manufacturers, Power looms, Textile hosieries

• Offering: Provides end-to-end business IT enablement in a customized form to SMBs (Infrastructure and POS solution)

• Key highlights: India’s first multilingual POS printer designed exclusively for the needs of rural retailers

• Built-in unicode support for Indian languages including English, Hindi, Marathi and others

• Capacity to work for 4-5 hours during power failures, has small footprint and absolutely no chances of crashing the hard disc

• Focus verticals: Rural retailers looking for a multilingual printing solution for receipts, barcodes, labels and tickets

• Offering: India Get Your Business Online’ initiative – to help SMBs get online with a free website, personalized domain and hosting

• Partner: HostGator, a web hosting provider, to also provide free support in creating, hosting and managing the website for a period of one year without any cost through its toll free call center

• Partner: Federation of Indian Micro and Small & Medium Enterprises (FISME), will work with Google India to help SMBs get online through direct customer outreach and events

• Customer Focus: To get 500,000 SMBs online in next three years through this program


Source: DNB; Reserve Bank of India; Zinnov Analysis Note: 12009 data

26

Millions of people in rural areas of India can benefit from the IT-backed financial inclusion initiatives

Number of No-Frill accounts -

41.5 million

Number of rural bank branches -

31,727

Number of POS - 522,148

Number of Kisan Credit Cards -

76 million

Number of GCC issued by PSBs -

152,842

Thousands of people have already benefitted from the Financial Inclusion initiatives of the government1

• Use of technologies such as mobile phones (by Union Bank), VSATs (by Bank of India) and biometric mobile ATMs (by Canara Bank) might help banks reach out to customers in rural areas

• Equipped with laptops, data cards and biometric devices, initiatives such as “Bank on Bikes” by the State Bank of India can provide banking facilities to the unbanked

Key government initiatives are benefitting from IT • Payments of MNREGA done online • UID will further empower people with

electronic identities

• IT can help improve financial literacy among people, both urban and rural, with initiatives such as Project Financial Literacy by RBI

Going forward, information technology can help further extend the benefits of Financial Inclusion

IT Enabled

FI


Source: Eko Website; News Articles; Zinnov Analysis Note:

27

IT based startups are increasing the reach of financial inclusion to the unbanked in India

Mega Opportunity

Customer Insight

• One in every second India has mobile device but most do not have a bank account

• Most times family members in cities would like to transfer funds to their relatives in rural areas who have no accounts

• Current banking penetration in India is 35%; 75+ banks with 80,000 branches and 400 million accounts – huge potential base to tap into

Solution

• Mobile Enabled Rural Customer

• Local mom and pop store is the customer service point/ banker

• USSD driven mobile banking platform

• Mobile Short Code replaces bank account

• Transactions driven via USSD- *3454*9902099374*500*

• My Account Number* Recipient Mobile Number * Amount to be paid


Reach:

More than 470,000 farmers in Gujarat

More than 250,000 farmers in Andhra Pradesh

~8,000 farmers signing up with Fasal every week

Intuit Fasal Advantage:

To bridge the information gap between the farmers and market conditions to get the right price for their crop

To enhance price transparency and availability of right information

To help organizations to connect well with farmers to provide services and advisory

Source: fasal.intuit.com; News Articles; Zinnov Analysis Note:

28

The Fasal initiative by Intuit is helping Indian farmers with updated price information and agriculture education


FASAL: A free SMS based platform offering real time price information to Indian farmers about their crops

Source: Ministry of Civil Aviation, New articles, Zinnov analysis Note:

29

Indian aviation is rapidly growing and needs strong IT infrastructure as its backbone…

72

143

FY06 FY11

Passenger Handling Capacity of Indian Airports (million)

Key Highlights of Indian Aviation Sector

• New Airports: the Ministry of Civil Aviation has approved 15 greenfield airports in India

• FDI in Aviation: Still under consideration, plans to introduce 24% – 49% FDI in the sector

• Air Cargo Policy: Currently planning an Air Cargo Policy to encourage cargo operators in the country

• Pricing and Taxing Issues: Initiating discussions on improving the pricing and taxing regulation scene in India

Key Policy Initiatives by the Government

Current Status

9th largest civil aviation market in the world

Current worth of Indian aviation industry - $12 billion

Total investments by private sector (last 5 years) ~ $6 billion

By 2011, five Indian carriers operating on International routes

Key recent activities through PPP model:

• greenfield airports in Hyderabad and Bangalore

• modernization of Delhi and Mumbai airports

Future Prospects

According to estimates, Indian aviation industry would require investments of $13 billion in next 5 year plan, out of which $10 billion will come from private sector

Key Challenges:

Spiraling jet fuel prices – airline industry in India suffers from huge debts

Lack of availability of foreign capital as FDI is prohibited

Stiff interest regime

Intense competition

Lack of trained manpower



30

…as a result the airport infrastructure segment is providing a lot of opportunities for the IT companies in India


Few years back, Siemens won a major order (in consortium with L&T and Unique Zurich Airport) to build the international airport in Bangalore

The Delhi Duty Free Services Pvt. Ltd.1 selected Cisco as a technology solution provider for its anchor duty-free stores at the IGI airport at Delhi

The solution provided by Cisco to offer integration and inter-operability of Cisco LAN, Unified Communications, Wireless, Cisco Video Surveillance and Cisco Physical Access Management with the network as the platform

IBM provided GMR Hyderabad International Airport (GHIAL) with end-to-end support including hardware, software and services for its integrated decision making system

IBM also provided support to capture and integrate historical data into a data warehouse which would act as a single source of information to GHIAL’s management and operation teams

The Delhi Cargo Services Center selected Siemens to set up a cargo handling equipment for the integrated cargo complex at the Delhi International Airport (for ~$35 million)

Besides automation of the center, the deal also includes IT solutions to support the system

The govt. usually forms a JV between its agencies and private sector to manage airports, e.g., DIAL – a JV between GMR Group, Airports Authority of India, Fraport and Malaysian Airports

Route

Source: IBEF, Ministry of Railways, Zinnov Analysis Note:

31

Similarly, the Indian Railways and the Metro Rail Network are also opening up large opportunities of growth

Future Prospects

• Government focus during next five years on five areas: tracks, bridges, signaling, rolling stock and stations

• Modernization of 19,000 km of railway tracks

• Plans to invest $147 billion during the five-year plan period running from 2012 to 2017

Indian Railways

• 4th largest railway network in the world

• 4th largest employer in the world (over 1.4 million employees)

• Total revenue of Indian Railways is ~$22 billion

Metro Rail

• Currently operating in Delhi, Kolkata and Bangalore

• Construction underway in Mumbai, Jaipur, Chennai and Hyderabad

• Private players entering into metro projects of Gurgaon and Hyderabad

Key Government Policy Initiatives

Metro Rail Expansion • Expansion of metro transit system to Indian cities like Jaipur, Bhopal, etc.; proposal to set up metro service

in all Indian cities with population over 2 million

Railway Infrastructure Expansion

• Rolling out projects for capacity expansion, electrification of tracks, upgradation of railways, empowering trains with GIS, etc.

Narrowing the Digital Divide • Initiating steps to improve railway ticketing portal and make available the tickets from alternate sources

such as post offices, etc.

Manufacturing Units • Rolling out projects to construct manufacturing plants across India

External Source Funding • The government is sourcing funds for its projects from external agencies such as World Bank and JICA



32

Key IT investments are being made in the railways sector

• Siemens is providing complete rail solutions from electrification and signaling to SI to Rapid Metro Rail Gurgaon Ltd.; the deal also includes provisioning of metro coaches

• Earlier Siemens equipped Delhi Metro with signaling equipment and railway communications systems

Metro Rail

• IBM has helped Indian Railways to implement a biometrics-enabled crew management system (CMS) to automate the day-to-day management of staffing on board its train

Crew Management – Indian Railways

• CISCO is providing solutions to the Indian Railways for their unreserved ticketing system (UTS)

Ticketing System – Indian Railways

• Players like Siemens, due to their diversified focus, are winning contracts for end-to-end manufacturing plant creation across various parts of India. The IT establishment is generally included as a part of these projects

Railways Manufacturing Plants Contracts

Many railway projects are rolled out by the Central for Railway Information Systems (CRIS)

Players like Cisco are forming partnerships with fellow IT vendors (e.g. HCL) to indirectly compete for government projects in the railway sector



33


Thank You 69 "Prathiba Complex", 4th 'A' Cross, Koramangala Ind. Layout 5th Block, Koramangala Bangalore – 560095 Phone: +91-80-41127925/6 11, First Floor, Paras Downtown Center, Golf Course Road, Sector 53, Gurgaon – 122002 Phone: +91-124- 4028888 3701 Patrick Henry Dr. Building 7 Santa Clara CA – 95054 Phone: +1-408-716-8432 21, Waterway Ave, Suite 300 The Woodlands TX – 77380 Phone: +1-281-362-2773

[email protected]

www.zinnov.com @zinnov

This report is solely for the use of Zinnov client and Zinnov personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from Zinnov

mailto:[email protected]

http://www.zinnov.com/

Date post:	09-May-2015
Category:	Business
Upload:	zinnovllc
View:	3,649 times
Download:	2 times