Working Group on

Telecom Sector12th Five Year Plan

July 18, 2011

ContentsIndian telecom scenario

Growth potential

Investment estimates

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Indian Telecom Scenario

• Fastest growing Sector with average monthly addition of 16-18 million subscribers

• Current subscriber base of over 875 million and active subscribers of about 588 million

• Second largest mobile network with over 840 million wireless subscribers

• Addition of over 225 million connections last year

• Roll out of services in more than 8000 towns and cities and over 500,000 villages

• 12-14 mobile operators in most of the circles

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Growth

Source: DoT, TRAI4

Wireless led GrowthMarch 2007

Total telephones 205.87 million

March 2011

Total telephones 846.32 million

Source: DoT, TRAI5

Teledensity Growth

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Share of private network (%)

Source: DoT, TRAI 7

Broadband growth

Source: DoT, TRAI 8

Growth PotentialNetwork Expansion • 1.1 billion subscribers by 2015

Broadband • TRAI -National Broadband Plan 160 Million by 2014 – Investment of Rs. 60,000 crore

• 2,50,000 villages Panchayats within 3 years• Broadband coverage for all secondary and higher secondary

schools, Village Panchayats and all public health care centers.

• Leveraging USO funds for faster expansion of broadband• Universal Access through support for shared infrastructure

for rural cellular mobile• Optical fibre connectivity for broadband upto Village

Panchayats9

Investment estimates

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Investment in Telecom Sector11th Five Year Plan

Year Investment (Source:

TRAI)

11 Five Year Plan

(Planning Commission)

11 Plan Centre

11 PlanPrivate

2007-08 37900 31900 7894 24007

2008-09 59200 52295 11048 41248

2009-10 77700 64206 13186 51019

2010-11 103900* 84339 13988 70351

2011-12 120000* 103900 15387 97007

Total 398700 345134 61503 283631

(Rs crore)*Projected11

Areas of Investment in 12th Plan• Investment required in

– Network expansion- Triple Play• Especially in rural and remote areas

– Network upgrades• Rapid Advancements in Technology/ customer demand cycles• 3G expected to account for 20% of subscriber base by 2015• NGN & IPV6

– Broadband expansion (BWA)– National Optical Fibre Network (NOFN)– Convergence of Technology– Value Added Services– Manufacturing and R&D

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Investment AssumptionsExisting • Telephone subscribers more than 875 million• Active subscribers about 588 million• Broadband subscribers more than 12 millionExpected by March 2017 (end of 12th V Year Plan)• Telephone subscribers- 1200 million– 3G/4G subscribers about 25% i.e. 300 million• Broadband subscribers- 175 million• e-Governance initiative to boost demand

• Telecom tower, VAS• Low ARPU/Tariff

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Estimated Sectoral Investment in 12th FYP

• Core telecom equipment - Rs. 1,35,000 crore + 1,50,000 Crore– Investment in 2G network 2G -Capacity addition - 500 million 500 million @Rs. 2700/- per line (average) =Rs. 1,35,000 crore– Investment in 3G/4G, Wimax, LTE etc capacity- 500

million

500 million @Rs. 3000/- per line= Rs. 1,50,000 crore

Total Investment in Core telecom equipments = Rs. 2,85,000 crore

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Estimated Sectoral Investment in 12th FYP

• Transmission Network (SDH, Microwave Radio, Routers)

Rs. 40,000 crore (Approx. 14%)• Access Network (Investment in tower, battery, power plant,

Green Telecom) Rs. 1,00,000 crore

Total Investment in Access and Transmission Network = Rs. 1,40,000 crore

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Estimated Sectoral Investment in 12th FYP

• Broadband Roll-out- Rs. 75,000 crore• Customer premises equipment (USB Dongles,

modem etc) Rs 50,000 crore• Spectrum charges (on renewal/ through

auction) Rs 1,00,000 croreTotal Investment =2,25,000 crore

Total Investment in Telecom Infrastructure Rs. 2,85,000+1,40,000+2,25,000= Rs. 6,50,000

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