Indian Telecom Industry Presentation (January 6, 2009)

1. T e l e c o m m u n i c aT i o n s
December 2008
www.ibef.org

2. Te l e c o m i n D u sT Ry ov e Rview
December 2008
contents
• Telecom industry overview
• Telecom an investment attracting sector
• Regulatory Framework and its impact
• emerging Trends in Telecom market
• major Players in Telecom sector
• Growth avenues
www.ibef.org

3. Telecom inDusTRy
oveRview
www.ibef.org

4. Te l e c o m i n D u sT Ry ov e Rview
December 2008
indian Telecom industry – a lucrative option
Facts
• Total telecom subscribers – 325.79 million (June 2008)
• Tele density – 28.33 per cent (June 2008)
• Quarterly addition of mobile subscribers (april–June
2008) – 25.80 million
• Telecom subscribers annual growth rate (2007–08)
– 44.79 per cent
• one of the biggest telecom markets in the world
• average Revenue Per user (aRPu) for Gsm (June
2008) – us$ 5.6
Source: Exchange rate as on 30 June 2008; Average exchange rate for the year 2007–08; VoiceData;
www.ibef.org

5. Te l e c o m i n D u sT Ry ov e Rview
December 2008
indian Telecom industry – a lucrative option
Facts
• more Gsm subscribers than fixed line subscribers
• Telecom equipment market (2007–08) –
us$ 23,699 million
• Handset market (2007–08) – us$ 5,962 million
• expected mobile subscriber base (2010) – about
500 million (i.e., more than one phone for every
household)
Source: Exchange rate as on 30 June 2008; Average exchange rate for the year 2007–08; VoiceData;
www.ibef.org

6. Te l e c o m i n D u sT Ry ov e Rview
December 2008
Telephony services (mobile and basic) and
internet services dominate the indian telecom services
• The indian telecom industry generated revenues Revenues of indian Telecom industry: 2002-10
of approximately us$ 32 billion in 2007–08 with a 2009-10 (e) 43
2006-07
growth rate of 60 per cent in 2007–08 over 2006–07. 20
2005-06 15
• it witnessed a caGR of approximately 29 per cent 11
2004-05
from 2002–03 to 2007–08. 10
2003-04
9
2002-03
• The caGR is expected to stabilise at 16 per cent 0 10 20 30 40 50
between 2007–08 and 2009–10. us$ billion
Sources: Average exchange rate for the year 2007–08; TRAI Report
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7. Te l e c o m i n D u sT Ry ov e Rview
December 2008
Telephony services (mobile and basic) and
internet services dominate the indian telecom services
• indian telecom services sector can be divided Telecom services in india
predominantly into basic, mobile and internet Internet
PMRTS
services. it also comprises smaller segments, such as VSATs
radio paging services,very small aperture Terminals Radio Paging
GMPCS
(vsaTs), Public mobile Radio Trunked services Basic Services
(PmRTs) and Global mobile Personal communications Mobile Services
by satellite (GmPcs).
• The mobile services in india are growing more than
basic wireline services.
Source:TRAI
www.ibef.org

8. Te l e c o m i n D u sT Ry ov e Rview
December 2008
Private players account for highest subscriber base growth
in the basic telephony services segment
Basic Services market share of Basic services segments
in india (2007–08)
• Basic services include fixed wireline and wireless in
local loop (wll-fixed).
12%
• Fixed wireline services hold a major market share
of 88 per cent in basic services.
88%
n Fixed n WLL (F)
Source:TRAI
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9. Te l e c o m i n D u sT Ry ov e Rview
December 2008
Private players account for highest subscriber
base growth in the basic telephony services segment
• Government-owned Bharat sanchar nigam ltd. market share of wireline service operators
in india (2007–08)
(Bsnl) and mahanagar Telephone nigam ltd. (mTnl)
are the two largest operators in the wire line 79
Bsnl
82
segment, whereas Bharti airtel ltd. is the leader in
wireless segment. 9
mTnl
9
• mTnl has presence in Delhi and mumbai, whereas other
11
Private
Bsnl covers the rest of the country. 9
Players
0 10 20 30 40 50 60 70 80 90
• Though private players, such as Bharti airtel and Percentage
n As of 30 June, 2007 n As of 30 June, 2008
Reliance, have registered notable growth, Bsnl
still dominates the segment in terms of wire line
subscriber base.
Source:TRAI
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10. Te l e c o m i n D u sT Ry ov e Rview
December 2008
Reduction in tariffs have led to a constant reduction in the average Revenue
Per user (aRPu). The gradual decline in aRPu, remains well supported by the
increase in subscriber base.
• The aRPu for Gsm service in india is much higher aRPu in india
10
than that for cDma service. The aRPu per month
us$ per month
7.1 6.6
6.6 6.5
8
5.7
for Gsm services has declined from us$ 7.1 in June 6
4.9
4 4.4
2007 to us$ 5.6 in June 2008, while that for cDma 4.1 3.9 3.3
2
services have fallen from us$ 4.9 to us$ 3.2 during 0
Q2’07 Q3’07 Q4’07 Q1’08 Q2’08
the same period. Gsm cDma
• The minutes of usage (mou) for Gsm has been rising
as compared to that for cDma. The mous for cDma mou per subscriber per month in india
service has declined from 462 in June 2007 to 354 in 600 505
mou (per subscriber per month)
493
464
June 2008, whereas that for Gsm has increased from 476 462
500
400 462
476 to 505 during the same period. 413
375 354
364
300
200
100
0
Q2’07 Q3’07 Q4’07 Q1’08 Q2’08
Gsm cDma
Source: TRAI Report; and exchange rate as on 30 June 2007 and 30 June 2008, respectively
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11. Te l e c o m i n D u sT Ry ov e Rview
December 2008
The mobile subscriber base in india is likely to reach
500 million by 2010.
• The subscriber base grew to 325.79 millions on June Telecom subscriber Base in india
2008, registering a growth of approximately 45 per 2008 325.79
cent over last year. The subscriber base grew at a 2007 225.01
caGR of 43.6 per cent from June 2004 to June 08. 2006 153.42
104.22
2005
• Teledensity in india is still low in india as compared 76.53
2004
to that in some countries. as on June 2008, india had 0 50 100 150 200 250 300 350
a teledensity of 28.33 per cent as compared to the subscribers in million
previous year’s figure of 19.86 per cent.
Teledensity in india
30
28.33
25
19.86
Per cent
20
13.96
15
9.61
10 7.04
5
0
2004 2005 2006 2007 2008
Source:TRAI
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12. Te l e c o m i n D u sT Ry ov e Rview
December 2008
Private players account for highest subscriber base
growth in the basic telephony services segment
• wireless services have led to a significant growth market share* of wireless** operators in india
(as of June 2008)
in the indian telecom industry.
• currently, there are 12 players–Bharti airtel,vodafone, 1%
2% 1%
Reliance, Tata Teleservices, idea, aircel, spice, Bsnl, 4%
24%
mTnl, BPl, HFcl and shyam Telelink–active in 9%
this segment.
9%
• as compared with 2006–07, the subscriber base of
most wireless service providers has increased leading
to an increase in their revenues. 18%
15%
• The subscriber base of Bharti airtel, a leader in this 17%
market, increased from 42.70 million in 2006–07 to
69.38 million in 2007–08, followed by Reliance (50.79 n n Reliance n Voda fone
Bharti
million subscribers) and vodafone (49.20 million n n Idea n TATA
BSNL
n n Spice n MTNL
Aircel
subscribers). n Others
Source:TRAI
1 www.ibef.org

13. Te l e c o m i n D u sT Ry ov e Rview
December 2008
india is one of the few countries in the world to have more Gsm subscribers
than fixed-line subscribers.
Gsm preferred to cDma segment by a large margin in indian mobile service market share
(as on June 2008)
terms of subscriber numbers.
26% 74%
n CDMA n GSM
Source:TRAI
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14. Te l e c o m i n D u sT Ry ov e Rview
December 2008
Gsm preferred to cDma in number of additions to subscriber base
• Bharti airtel has the largest market share in the Gsm segment. During 2007–08, out of the total subscriber base
of 212.51 million, the private players accounted for more than 80 per cent, whereas, the public sector operators
(Bsnl and mTnl) accounted for the remaining share (20 per cent).
• Reliance communications dominates the indian cDma mobile services segment with a subscriber base of 42.71 million.
market share Gsm service Providers market share cDma service Providers
(as on June 2008) (as of June 2008)
0.38% 0.45% 0.15%
1%
2%
6.17%
2%
4%
6%
32.65%
13%
35.41%
57.44%
18%
23.5%
n Bharti Airtel n Vodafone n BSNL n Reliance n Tata Teleservices n BSNL
n Idea n Aircel n Reliance n MTNL n HFCL n Shyam Telelink
n Spice n MTNL n BPL
Source:TRAI
1 www.ibef.org

15. Te l e c o m i n D u sT Ry ov e Rview
December 2008
various other services emerged by leveraging the telecom services industry
Radio Paging Services
Radio paging services were launched in india in 1995.
These services, however, could not compete well
with cellular services in general and sms technology
in particular and is shrinking continuously. at present,
all but four radio paging service providers have been
marginalised in the indian market.
Very Small Aperture Terminals (VSATs)
at present, there are 9 vsaT service providers in india
including Bsnl, Bharti airtel, Hughes communication
and Hcl comnet. The number of subscribers of vsaT
services increased on a quarterly basis by 8,473 to
89,868 in June 2008. The market for vsaT services
registered a 10.41 per cent growth for the quarter
ending June 2008. Hughes communication is the market
leader, with a market share of 30 per cent, followed by
Hcl comnet with 27 per cent.
Source:TRAI
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16. Te l e c o m i n D u sT Ry ov e Rview
December 2008
various other services emerged by leveraging the telecom services industry
Public Mobile Radio Trunked Services (PMRTS)
PmRTs services have been showing a negative growth.
PmRTs’ subscriber base decreased by 2.99 per cent
during the quarter ending June 2008. High license fee
for this service leaves low margin for services providers,
thereby inhibiting its growth. in india, 12 operators
are offering this service to total of more than 35,000
subscribers.
Global Mobile Personal Communication by
Satellite (GMPCS)
GmPcs2 services were launched in india in 1999. These
services allow a subscriber to communicate with others
from any point on earth through a hand-held terminal.
moreover, the telephone number remains unchanged,
irrespective of the subscriber’s location. iridium india
Telecom limited is the pioneer in GmPcs services in
india. The Government of india has restricted foreign
equity participation in this segment to 74 per cent.
Source:TRAI
1 www.ibef.org

17. Te l e c o m i n D u sT Ry ov e Rview
December 2008
Despite a slow penetration rate, internet services segment
embodies huge growth potential in india
• in india, there has also been significant growth in the internet subscribers: 2000-2008
subscriber base for wireless internet, which stood 14
internet subscriber (in million)
at 75.97 million for the year 2007–08 with mobile 11.66
12
9.22
10
internet penetration at 1.8 per cent. more than 56 per 8 6.94
cent of indian mobile subscribers own a web-enabled 6 5.55
4.55
3.64
3.42
3.04
4
handset at present. 2
0
• The total number of internet subscribers increased at 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
a caGR of approximately 21.17 per cent from 2000–
01 to 2007–08.
Source:TRAI
1 www.ibef.org

18. Te l e c o m i n D u sT Ry ov e Rview
December 2008
Despite a slow penetration rate, internet services
segment embodies huge growth potential in india
• The total number of internet subscribers grew from Top Five internet service Providers
by market share (as on June 2008)
9.22 million in June 2007 to 11.66 million in June
2008, primarily attributed to an increase in broadband
4.84%
subscriber base from 2.42 million in June 2007 to 4.38 7.07%
million at the end of June 2008.
7.47%
• Bsnl is the biggest player in this market with 5.94
million subscribers, followed by mTnl, Bharti airtel, 50.96%
Reliance and sify Technologies. 16.49%
• internet services can also be accessed through mobile
phones (cDma and Gsm). Bharti airtel is the leader
in wireless internet operators with a market share of
approximately 24 per cent. n BSNL n MTNL n Bharti Airtel
n Reliance n Sify
Source:TRAI
1 www.ibef.org

19. Te l e c o m i n D u sT Ry ov e Rview
December 2008
The sales for Gsm-based handsets have been growing in india
as compared to cDma-based handsets
• The handset market in india, consisting of mobile and mobile Handset market in india
fixed handsets, registered a growth of 33 per cent with 2007-08 5,761
the sales volume of 95.6 million over 2007–08. 2006-07
4,750
2005-06 3,231
• The expansion of wireless networks and an increase in 2004-05 1,966
subscriber base, both in urban and rural areas, led to a 2003-04 1,610
boost in the sale of mobile handsets across india. The 0 1,000 2,000 3,000 4,000 5,000 6,000
mobile handsets sale grew by 12 per cent and that of value us$ million
fixed handsets declined by 41 per cent over 2007–08.
• out of the total number of handsets sold in 2007–08,
68.3 million were based on Gsm technology and the
remaining (27.3 million) on cDma. The sales for Gsm
handsets grew by 34 per cent as compared to 28 per
cent for cDma phones.
Source:VoicenData.com,TRAI
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20. Te l e c o m i n D u sT Ry ov e Rview
December 2008
nokia, sony ericsson, samsung, and Reliance mobile phones are most popular
across the country
• nokia continues to dominate the handsets market. market share of Gsm and cDma Handset
manufacturers: 2006–07
its market share increased from 53.6 per cent in
1.20% 1.00%
2006–07 to 62.5 per cent in 2007–08. sony ericsson
has the second highest market share (12.8 per cent) 3.50%
5.00%
in 2007–08.
6.20%
• lG, motorola, ZTe and Haier witnessed a decline in 6.20%
their market share in 2007–08 as compared to that in 62.50%
2006–07. 12.80%
n Nokia n Sony Ericsson n Samsung
n LG n Motorola n ZTE
n Huawei n Haier n Others
Source:Voice Data
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21. Telecom – an iDeal
invesTmenT secToR
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1

22. Te l e c o m – i n v e sT m e n T aTTR ac Tin G s ec ToR
December 2008
india – an ideal investment Destination
• world’s largest democracy
• independent judiciary
• skilled and competitive labour force
• Fifth-largest telecom network in the world; second-
largest among the emerging economies after china
• on an average, approximately 8 million users are
added per month, making india the world’s fastest
growing wireless services market
• liberal Foreign investment Regime: FDi limit increased
from 49 per cent to 74 per cent; the rural telecom
equipment market also open to large investments
• among the countries offering the highest rates of
return on investment
Source:TRAI
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23. Te l e c o m – i n v e sT m e n T aTTR ac Tin G s ec ToR
December 2008
india – an ideal investment Destination
• The large untapped potential in india’s rural markets
revealed by 9.21 per cent teledensity in rural markets
as compared to the national level of 28 per cent.
• The government promoting telecom manufacturing by
providing tax sops and establishing telecom-specific
special economic Zones
• Fully repatriable dividend income and capital invested
in telecom equipment manufacturing
Source:TRAI
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24. Te l e c o m – i n v e sT m e n T aTTR ac Tin G s ec ToR
December 2008
since india’s telecom sector trails that of other asian economies
by about 10 years, growth is a certainty.
• india is currently the second-largest mobile market in Proposed investments By Telecom companies
the world in terms of mobile subscribers. in india (us$ Billion)
• The indian telecom market generated revenues of BSNL 1.3
Idea 2.4
approximately us$ 32 billion in 2007–08. Further, Reliance 5.7
the industry is expected to register a caGR of Aircel 5
approximately 16 per cent from 2007-08 to 2009–10 Quippo Telecom Infrastructure 3
(QTIL)
and scale to us$ 43 billion by 2010. Vodafone 6
• it is also expected that by 2012, fixed line revenues
will reach us$ 12.2 billion and mobile revenues will
reach us$ 39.8 billion.
• several foreign companies are making large
investments in india..
Source:TRAI
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25. ReGulaToRy FRamewoRk
anD iTs imPacT
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26. ReG u l aTo Ry F Ra m e wo R k anD i T s i mPac T
December 2008
Regulatory framework provides level-playing field for all operators
• The Department of Telecommunications (DoT) of the
Government of india is the main governing body for
the industry
• Telecom Regulatory authority of india (TRai) assists
the Government of india to take timely decisions and
introduce new technologies
• The Telecom Disputes settlement and appellate
Tribunal (TDsaT) was also established in the same
year.
Source: Regulate Online, Fitch Report and TRAI
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27. ReG u l aTo Ry F Ra m e wo R k anD i T s i mPac T
December 2008
Indian Telecom Industry Framework
WPC
spectrum management
TRAI
independent Regulator
DoT indian Telecom
licensor and Frequency industry
management for Telecom Framework TDSAT
Disputes settlement Body
GoT–IT
Handles ad–hoc issues
Integrated Fixed Line Private CDMA GSM Operators
ILD Players
Bsnl Reliance Hutch/vodafoneairtel/
vsnl TTsl Bhartiidea/spice
mTnl
Source: Regulate Online, Fitch Report and TRAI
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28. ReG u l aTo Ry F Ra m e wo R k anD i T s i mPac T
Regulatory framework provides level-playing field for all operators
Unified Access Licensing Regime (UALR)
The establishment of the ualR (2003) eliminated
the need for separate licences for different services.
This regime allowed players to offer both mobile and
fixed-line services under a single licence after paying
an additional entry fee. The regime does not take into
account the national and international long-distance
services and internet access services.
Between February and march 2008, DoT granted 120
new licences to provide unified access services to
various companies, including Datacom solutions Pvt.
ltd., aska Projects ltd., swan Telecom Pvt. ltd., loop
Telecom Pvt. ltd. and s Tel ltd.
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29. ReG u l aTo u i c aTi o n
Te l e c o m mRynF Ra m e wo R k anD i T s i mPac T
December 2008
Regulatory framework provides level-playing field for all operators
Universal Service Obligations (USO)
The uso policy was implemented along with nTP ’99
to widen the reach of telephony services in rural india.
all telecom operators are bound to contribute
five per cent of their revenues to this fund. This system
was put in place to bridge the wide gap between
urban and rural teledensity, bringing it down from the
current 31 per cent. initially, only basic service providers
were under the purview of uso. later, its scope was
expanded to include mobile services also. although it
increases the cost burden for telecom companies, uso
helps in building the telecommunication infrastructure in
rural areas.
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30. ReG u l aTo Ry F Ra m e wo R k anD i T s i mPac T
December 2008
important regulations and their impact on the indian telecom industry
Unified Access Service License Regime (UASL) impact of Policy change on indian Telecom industry
16 250
cellular tariff (cents per minute)
• The establishment of the ualR (2003) eliminated
number of subscribers (million)
200
12
the need for separate licences for different services. 150
Telecom
8 Tariff order
This regime allowed players to offer both mobile and 100
wll uasl
wll
4 Removal of aDc
cPP
fixed-line services under a single licence after paying 50
lowering of aDc
nTP’99
0 0
an additional entry fee. The regime does not take into 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
account the national and international long-distance Total cellular subscribers cellular Tariff
services and internet access services.
• Between February and march 2008, DoT granted
120 new licences to provide unified access services
to various companies, including Datacom solutions
Pvt. ltd., aska Projects ltd., swan Telecom Pvt. ltd.,
loop Telecom Pvt. ltd. and s Tel ltd.universal service
obligation (uso)
Source: Regulate Online, Fitch Report and TRAI
0 www.ibef.org

31. Te l e c o m m u n i c aTi o n
December 2008
important regulations and their impact on the indian telecom industry
Universal Service Obligations (USO)
The uso policy was implemented along with nTP ’99
to widen the reach of telephony services in rural india.
all telecom operators are bound to contribute
five per cent of their revenues to this fund. This system
was put in place to bridge the wide gap between
urban and rural teledensity, bringing it down from the
current 31 per cent. initially, only basic service providers
were under the purview of uso. later, its scope was
expanded to include mobile services also. although it
increases the cost burden for telecom companies, uso
helps in building the telecommunication infrastructure in
rural areas.
1 www.ibef.org

32. ReG u l aTo Ry F Ra m e wo R k anD i T s i mPac T
December 2008
important regulations and laws passed
DoT is the main body formulating laws and
regulations for the indian telecom industry.
ilD services intra-circle
were opened to merger guidelines measures to number
Bsnl was competition
Private players independent were established boost rural portability
established
were allowed regulator, TRai, calling Party telephony was proposed
by DoT Go-ahead
in value added was established Pays (cPP) was
(pending)
to cDma
services implemented
technology
1994 1999 2002 2003 2004 2005 2008
internet
1992 1997 2000 2006
telephony
unified access
initiated Broadband Policy 2004
licensing (uasl)
Reduction 3G policy
was formulated—
national regime was
nTP-99 led FDi limit was
of license announced,
targeting 20 million
Telecom introduced
to migration subscribers by 2010 increased from 49
fees spectrum
Policy from high-cost to 74 per cent auction
Reference
(nTP) was fixed licence awaited
interconnect
formulated fee to low-
order was
cost revenue
issued
sharing regime
Source: TRAI; 2) Fitch Report ilD-international long Distance
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33. key TRenDs in THe
Telecom inDusTRy
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34. em eR Gi nG T R e nD s i n T e l e com maRkeT
December 2008
meRGeRs anD acQuisiTions (ma)
The market is witnessing several ma activities that Recent Mergers and Acquisitions in the Indian
are resulting in consolidations in the industry. This trend Telecom Industry
has assisted companies in expanding their reach in Etisalat – Swan Telecom
the indian telecom market to offer better services to emirates Telecommunications corp. acquired 45 per
customers. cent stake in swan Telecom Pvt. ltd. by paying us$ 900
million.
NTT DoCoMo – Tata Teleservices
nTT Docomo, the Japanese phone company bought
26 per cent stake in Tata Teleservices by paying us$ 2.7
billion.
RCom – Yipes Holdings
Reliance communications ltd. acquired us-based yipes
Holdings inc., a leading provider of ethernet services in
us for us$ 300 million.
Idea – Spice
idea cellular acquired 48.2 per cent stake in spice
communications in order to expand its services in
Punjab.
Source:TRAI and Grant Thornton India
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35. em eR Gi nG T R e nD s i n T e l e com maRkeT
December 2008
FDi in the indian Telecom sector
The indian government allows FDi of up to 74 per cent, FDi in Telecommunication sector
subject to licensing and security requirements, in the 2008-09 (till July 08) 315
following categories: 2007-08 1261
2006-07 478
• Basic and cellular services 2005-06 624
• national/international long distance 2004-05 129
2003-04 116
• value-added services such as PmRTs and GmPcs
0 300 600 900 1200 1500
• Radio paging service us$ million
• internet services (providing service gateway)
• infrastructure providers (category-ii)
Source:TRAI and Grant Thornton India
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36. em eR Gi nG T R e nD s i n T e l e com maRkeT
December 2008
FDi in the indian Telecom sector
The indian government allows FDi of up to 100 per cent
in the following categories:
• manufacturing of telecom equipment
• internet services (not providing international
gateways)
• infrastructure providers providing dark fibre, right of
way, duct space, tower (iP category-i)
• electronic mail
• voice mail
Source:TRAI and Grant Thornton India
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37. GRowTH avenues
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38. GRowT H av e n u e s
December 2008
india presents a host of opportunities for telecom companies
G Services enterprise
3G
Telecom services
The indian government plans to auction the spectrum
for 3G services by inviting bids from domestic as well wimaX
Rural
Telephony
as foreign players. The 3G spectrum is among the major Growth
avenues
investment opportunities and is expected to attract infrastructure
value added
sharing
services
investments worth us$ 8–10 billion during 2008–11.
virtual Private managed
network services
international and foreign players can enter this segment
through joint-ventures with indian companies with
a stake of not more than 74 per cent. They will also
have to pay an additional entry fee of us$ 328 million
to acquire unified services access licence (usal).
companies such as aTT and nTT Docomo are
planning to enter in this sector.
Source:TRAI, CII-Yankee Study
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39. GRowT H av e n u e s
December 2008
india presents a host of opportunities for telecom companies
Worldwide Interoperability for Microwave Access
(WiMax)
wimax has been one of the most significant
developments in wireless communication in the recent
past. since this mode of communication provides
network access in inaccessible terrains at a speed of
more than 4 mbps, it is expected to be a major factor
in driving telecom services in india, especially the
wireless services. Thus, it will lead to the increased use
of telecom services, internet, value added services and
enterprise services.
Source:TRAI, CII-Yankee Study
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40. GRowT H av e n u e s
December 2008
india presents a host of opportunities for telecom companies
Managed Service
managed service is another segment that is attracting
telecom companies. on account of the rapidly growing
subscriber base, service providers find it difficult to
manage their infrastructure and network. in such
cases, they completely or partially outsource their
infrastructure or network management operations.
Virtual Private Network
virtual Private network is a private data network that
provides connectivity within closed user groups (cuG)
via public telecommunication infrastructure. it is similar
to leasing/owning lines and yet getting exclusive access.
Source:TRAI, CII-Yankee Study
0 www.ibef.org

41. GRowT H av e n u e s
December 2008
india presents a host of opportunities for telecom companies
Enterprise Telecom Services
Telecom service providers are increasingly targeting
enterprises by providing them dedicated services. some
of the key services include voiP, dedicated telecom
communication systems; iT infrastructure-enabled
unified communication services, etc. This segment is
expected to witness major developments as the demand
for enhanced telecom infrastructure is increasing along
with the growth in the information and communication
technology (icT) industry.
Source:TRAI, CII-Yankee Study
1 www.ibef.org

42. GRowT H av e n u e s
December 2008
india presents a host of opportunities for telecom companies
Value-Added Services value-added services in india (2007–08)
The vas industry in india generated revenue of us$ 4%
1.2 billion in 2007–08 and is expected to reach us$ 4.0 10%
billion by 2015.
17%
major growth drivers for vas in india 44%
• increasing focus on localisation and availability of
content in local languages 25%
• Development of m-commerce applications, such as
booking tickets and making bill payments n Person to Person SMS n Ringtone Download
n Person to Application Application to Person SMS
• availability of mobile Tv and development of shows, n Games Data n Others (MMS etc.)
films, etc., for the same
Source:TRAI, CII-Yankee Study and IMRB Report
www.ibef.org

43. GRowT H av e n u e s
December 2008
india presents a host of opportunities for telecom companies
• availability of complete subscriber data has helped
in reaching niche audience leading to a growth in
advertising revenue through m-marketing
• Development of video-based applications, such as
video sms and podcasts
Source:TRAI, CII-Yankee Study and IMRB Report
www.ibef.org

44. GRowT H av e n u e s
December 2008
value-added services and Rural Telephony
hold large market potential in india
Rural Telephony urban-Rural Disparity in india
60
• under the Bharat nirman Programme, the 57.7
50 49
government will invest us$ 2 billion, from 2008
Teledensity (%)
40 38
to 2009, to set up about 100,000 community
30 26.2
service centres in rural areas to provide broadband 28.3
21.3
20 19.9
connectivity. 14.3
12.2 12.9
10.4
10 9.1 9.2
7.0
5.1
8.2 4.3
3.6
• with the teledensity in rural areas at less than 10 per 5.0
2.9 1.5 1.9
1.7
1.2 1.7
0.9
0.7
0
cent against the national teledensity of approximately 2000 2001 2002 2003 2004 2005 2006 2007 2008
urban Rural Total
28 per cent, there seems to be huge untapped
potential for mobile phone penetration in rural india.
Source:TRAI, CII-Yankee Study and IMRB Report
www.ibef.org

45. Te l e c o m m u n i c aTi o n
December 2008
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