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y Indian mobile industry is the fastest growing across the world adding 15-20 million new subscribers every month
y 2nd largest market after China in terms of number of subscribers
y Crossed 500 million mobile subscriber mark in Dec,2009
y Fixed line subscription at 35 million which is shrinking
every month. The rest of the presentation would focus on mobile industry as it is the most significant part of Telecom Industry
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y India is divided into 23circles and separatelicenses have been issued for each circle
y Division of circles mostly along the state boundaries
y Circles were categorized as Metros, A, B and C based
on the revenue potential of the circle when 1st set of auctions were held in 1995
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1994Start of Cellular
operations
1999New Telecom
Policy
2000-01 3rd/4th Operator
Licenses
2003CDMA networks
launched
2004Calling Party
Pays (CPP)Introduced
2005Lifetime Validity
Products Issued
2008Fresh Licenses
issued to 6players
2009Tariff warsamongst
operators
2010 3G, BWA auctions
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
CDMA - - - 6 10 17 41 57 84 95
GSM 3 6 10 22 37 59 105 172 258 415
-
100
200
300
400
500
600
CDMA
GSM
In millionSource: COA I, AUSPI
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Operator Subscriber base
BSNL 28,446,969
MTNL 3,514,454
Bharti Aitel 2,928,254
Reliance Communications 1,152,237
Tata Teleservices 1,003,261
HFCL 165,978
Teleservices Limited 95,181
All India 37,306,334
The fixed line subscriber base is stagnant at 37million for last two years
The fixed line subscriber base is stagnant at 37million for last two years
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y Gartner and other analy sts estimated Indian Handsetmarket size f0r 2009 between 1115-125 million
y Low cost handsets dominate with the average selling
price of $60-65y Nokia has the dominant market share followed
Samsung and LG
y Share of CDMA in handsets is on a decline after the
decision of Reliance and Tata to focus on GSM
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y A s a result of separate licenses, there are few pan Indiaoperators. However, in the period 1999-2005, consolidation led to emergence of larger players
y
In 2007-08, new licenses were issued to new players taking total number of operators in each circle to as high as 13
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GS
y Bharti Airtely Vodafone
y Ideay BSNL/MTNLy Aircely Reliancey Tatay Uninory Stely BPL
y Reliance
y
Tata Indicomy MTS
C
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y India is currently the most competitive market in the world which has led to tariff wars
$1 = R s 45R s 1 = 100 p
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y Revenue growth has got impacted significantly y The break-even point for new operators has increased
significantly
y
Increase in churn and Multiple SIMy It is estimated that only 50% of new subscriber addition
is actually new subscribers. Rest all are either churningfrom one network to another or are adding to MultipleSIM phenomena
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26%
44%53%
63%
80%
73%
78%86% 91% 93% 96%
0%
20%
40%
60%80%
100%
120%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Prepaid as % of otal Subscribers
99% of new subscriber additions are in prepaid99% of new subscriber additions are in prepaid
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1158
814731
503412
352 316 282 240
845
453328 288
193159 146 128 123
0
200
400
600
800
1000
1200
1400
2000 2001 2002 2003 2004 2005 2006 2007 2008
ARPU Cost/Sub
GSM ARPU & Cost data (R s)
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56% Airtime (including roaming Airtime)
2%
Outroaming Airtime
5%Rentals
10% Activation & Processing Fees
1%Outroaming urc arge
10% VA Revenues2%
Ot er Revenues15%
Gross Interconnect Usage Revenue
Revenue Break-up as % of Gross Revenues
Source: P Benc marking report - 200
Net Service Revenue = 7 % of Gross Service RevenueNet Service Revenue = Gross Service Revenue Interconnection
Usage osts Outroaming Airtime
Net Service Revenue = 7 % of Gross Service RevenueNet Service Revenue = Gross Service Revenue Interconnection
Usage osts Outroaming Airtime
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So rce: enc ar in re ort - 2
Net or o eratin ex enses ro ortion of costs increased from 36% in 2 5 to 51% in 2
Net or o eratin ex enses ro ortion of costs increased from 36% in 2 5 to 51% in 2
51. %
24. %
. %
1 .2%
6. %
A s % of otal Costs
Net orO eratin
osts
Sales &Mar etin
osts
Personnelosts
26.%
12. %
4. %
4. %
3.2%
A s % of et Rev
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40.0%
11.0%16.0%
9.0%
4.0%
20.0%
PostpaidSMS
CLI
GPRS
Ringtones &
RingbackTones
36.0%
0.0%5.0%30.0
%
5.0%
24.0%
Prepaid
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y Defense occupies chunk of spectrum and hence thereis scarcity of spectrum leading to poor quality of service
y
Mobile Number Portability y Plan to roll-out mobile number portability by middle of
2010
y The roll-out has been delayed for last two years due tooperational readiness and security issues
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450 470 698 862
Known as 700MHz band
Identified by WRC-07 for IMT Entirely held by
defense
Known as 700MHz band
Identified by WRC-07 for IMT Entirely held by
defense
824 844 869 889
Known as 850 MHzband
Allocated to CDMA Entire band
available for mobile
Known as 850 MHzband
Allocated to CDMA Entire band
available for mobile
890 902.5 915 935 947.5 960
Known as 900 MHzBand
Allocated GSM All available
spectrum allocated to mobile services
Known as 900 MHzBand
Allocated GSM All available
spectrum allocated to mobile services
Paired With
Paired With Known as 450
UHF MHz Band Currently used for
Police & Security networks
Known as 450UHF MHz Band
Currently used forPolice & Security networks
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2300 2400
Known as 2.3 GHzTDD band
Intended allocation for BWA
Known as 2.3 GHzTDD band
Intended allocation for BWA
Known as 2.6 GHz
band Part intended
allocation for BWA and part for mobileservices
Currently entire band is with defense
Known as 2.6 GHz
band Part intended
allocation for BWA and part for mobileservices
Currently entire band is with defense
2500 2690
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Visit Telecom Circle to read interesting articles on Telecom and
Internethttp://www.telecomcircle.com
To download1. India Subscriber Database Circle-wise, operator-wise from
year 2000 on wards2. Circle-wise ARPU data for GSM networks3. Case stud y on how Indian Carriers make 40% EBIDTA
margins at 2 cents a minute
Visit http://www.telecomcircle.com/2009/06/india-telecom/
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