ci bda broadband overview 2007-03-19
TRANSCRIPT
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Prepared forMetro Ethernet Forum
Carrier Ethernet Press Briefing
March 19, 2007
2007 BDA
Current Scenario in Indias
Telecom Market
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BDA IntroductionBDA Introduction
Market OverviewMarket Overview
Broadband FocusBroadband Focus
Table of Contents
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BDA provides strategy consulting and research to leading TMT firms and investors with afocus on emerging markets and emerging technologies in Asia.
The first TMT consultancy in China, BDA was founded in 1994 and is the leading firm of its
kind, now having a team of over 30 based in Beijing.
Active in India since 2004, advising TRAI as well as international carriers, vendors andinvestors active in, or seeking to enter, the Indian market.
BDA also tracks emerging technologies and business models from Japan and South Korea.
BDA has dedicated analysts organized around three sector groups:
BDA is able to support companies through: Research subscription services Customised retainers
Consulting projects
BDA: Telecom / Media / TechnologyConsulting & Research
Handsets/Devices Fixed Line & Wireless Internet/New Media
www
Equipment & Services
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BDA IntroductionBDA Introduction
Market OverviewMarket Overview
Broadband FocusBroadband Focus
Table of Contents
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Industry dynamics will make India the number twomobile subscriber market in the world by 2010
Most inhabited areas of India should be covered bymobile networks by the end of 2009, despite only45-50% coverage today.
The number of total mobile subscribers is expectedto increase from over 155 million today to 500million by the end of 2010 as per Govt. targets.
Broadband growth has just begin with the incumbentand some private telecom operators offeringaggressive pricing plans along with expanding
networks. But penetration remains minutecompared to voice penetration.
Factors accelerating growth include: low levels of penetration and increased competition
leading to product innovation and increased capital
expenditures reduced regulatory uncertainty
declining equipment costs
the Government changing its policy for UniversalService to provide subsidy for mobile cellular and plansto extend that to broadband connectivity as well
Broadband spread has just begun
Entry of foreign carriers into the ILD & NLD space
Source: Industry Reports, BDA Analysis
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India Market Status
Select ed market t rends
Indias mobile subscriber growth continues to grow faster than China
Recent M&A/FDI activity by Vodafone (Hutch Essar), and IDEA Cellulars IPO beingoversubscribed is a major vote of confidence in Indias Telecom sector growth prospectsand response to lifting of foreign investment ceiling to 74%
Government recognizes that QoS parameters are extremely important, however spectrumavailability continues to be the biggest bottleneck
Operator Wireless MarketShare Breakdown
(Jan 2007)
8.8%
16.4%
21.1%16.4%
22.7%7.2%7.5%
Airtel
Reliance
BSNL
Hutch - incl. BPL
Idea
TTSL
Others
Population 1.112 billion
Fixed Subs / Penet rat ion 40.40 mn / 4% (Jan 2007)
Mobile Subs / Penet rat ion 156.31 mn / 14% (Jan 2007)
I nternet Subs / Penet ration 8.07 mn / 0.7% (Sep 2006)
Broadband Subs / Penet rat ion 2.15 mn / 0.2% (Jan 2007)
Note: Mobile subs data includes fixed wireless customers.
Source: TRAI, COAI, AUSPI, BDA Analysis
* CDMA Mobile Figs for BSNL not included
http://bdabjfl01/Share/CCD/Projects/Archive/Old%20Projects%20to%20October%202002%20-%20A/BDA%20Database/World%20Factbook/flags/in-lgflag.jpg -
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India's mobile subscriber base is increasingphenomenally with nearly 7 million subs added eachmonth
5.3
5.96.1
6.7 6.86.5
6.8
3.5
2.9
4.4
2.5
4.5
5.4
3.9
4.8
4.3
5.0
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Sep-05
Oct-05
Nov-05
Dec-05
Jan-06
Feb-06
Mar-06
Apr-06
May-06
Jun-06
Jul-06 Aug-06
Sep-06
Oct-06
Nov-06
Dec-06
Jan-07
MicroPrepa
idTake
soff
Launch of 999 scheme
Million
Source: TRAI, Morgan Stanley Research, BDA Analysis
Penetra
tioni
nB&
CCircles
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BDA IntroductionBDA Introduction
Market OverviewMarket Overview
Broadband FocusBroadband Focus
Table of Contents
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Emphasis on broadband growth in India was ignitedby the efforts of TRAI & DOT in 2003 to 2004
Key Milest ones in t he History of I ndia Broadband
ISP policy announced to allow private ISPs to enter Nov 1998
National Telecom Policy 1999 sets targets for providing high speed data for all towns
with greater than 200,000 population
1999
TRAI releases consult at ion paper & recommendat ions on Accelerat ingGrow th of I nt ernet and Broadband Penetr ation
Nov 2003 & April 2004
National Internet Exchange launched by Department of IT 2003
TRAI issues consultation on Review of Internet Services Dec 2006
DOT part ially accepts TRAI s recos for I nt ernet and Broadband, includingthose for broadband subscriber t argets, and releases Broadband Policy 2004
Oct 2004
WPC de-licenses 2.4 GHz spectrum for outdoor usage Jan 2005
BSNL & MTNL launch residential broadband services on DSL Jan 2005
TRAI slashes rates of international and domestic leased circuits Apr & Nov 2005
India misses first broadband subscriber target of 3 mm Dec 2005
TRAI issues recommendations on IPLC competition , which are then accepted by DOT Dec 2005 & Dec 2006
Source: TRAI, BDA
200 d l d f k f h
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In 2004, TRAI developed a framework for howto analyze growth of broadband in India &identified the various hurdles preventing it
11 Hurdles Are Preventi ng t he Grow th of Broadband
Price1. Prices for broadband are 1,200 times higher than in Korea
Access to the customer
2. Lack of access to the incumbent s copper for DSL
3. Low qualit y of cable TV infrastructure and lack oforganization
4. High costs for DTH and VSAT
5. Policies preventing w ireless solutions from spreading6. Clearances for right of way
Cost of backhaul networks7. Lack of effective competition in the w i th in ci ty netw orks
8. High costs ofinternational bandwidt h
9. Ineffective implementation ofNational I nt ernet Exchange ofI nd ia (NI XI )
Fiscal policies
10. High taxes and duties, and lack of incentives for faster growth
Content and applications11. Lack of locally relevant content and absence of change agent
to drive growth
Infrastructurefor Access
Content Access devices
Reinforcinggrow th cycleIn
crea
sedco
ntentleve
ls
prom
otefu
rtherd
eman
dfo
r
quality
infr
astruc
ture
Availabilityofviable
infrastru
cturepromotes
proliferationofaccessdevices
Proliferation of access devices promotescontent creation
The information, programs,and services on the internet
This includes portals,information sites, e-mail,messaging, chat, e-commerce, etc.
The interface the user haswith the internet and itscontents
Does not have to be a PC
Complete connection to the end-userfrom information source
Connection can be wire-line or wireless,broadband or narrowband
Grow th in Broadband andI nternet is Driven by theI nterplay of Three Distinct Factors
Source: TRAI
http://www.trai.gov.in/Default.asphttp://www.trai.gov.in/Default.asphttp://www.trai.gov.in/Default.asphttp://www.trai.gov.in/Default.asp -
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3
9
20
0.11.3
2.1
0.40
5
10
15
20
2003 2004 2005 2006 2007 2010
Targets Actual
I ndian Broadband Subscribers Broadband Breakdow n by Technology,Sept 2006
Since then, broadband subscriber growth in Indiahas not met the targets set by the Government
90%
5%4%1% 0.10%
DSL Cable Modem Ethernet LAN Fibre Radio
Million
Source: TRAI, BDA
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0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07
Wireless Broadband
Percent age Mont hly Grow t h of Subscribers
Percent
Even the trend of broadband growth is not yet verypositive, and much less consistent than mobile
Source: TRAI, BDA
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Many in the industry have been questioninggovernment policy initiatives
Spectrum allocation and pricing for wirelessbroadband
Unified licensing & VOIP / Internettelephony interconnection with PSTN
License fees for ISPs providing VPN and
Internet telephony
Wholesale / resale market for bandwidth
Local loop unbundling
Clarification of broadcast & cable laws for
IPTV provisioning
Rural area growth via niche operators
QoS and SLAs for upstream bandwidthfrom NLD & ILD operators
Relocation of satellite services from lowerextended C band (3.4 GHz 3.7 GHz)
Regulating international bandwidth landingstations
USO subsidies for wireless infrastructure in
rural areas
Potential USO subsidies for broadband inrural areas
State wide area networks and 100,000community service centers
Reduction of entry barriers for telcos intoNLD & ILD services space
Has the government changed policies suf ficient ly t o enable exponent ial grow t h
Out st anding issues Posit ive m ovement s
Source: BDA
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But for broadband to succeed in India, each part ofthe ecosystem needs to be appropriately promoted
Technology
Government Services Rural Development
Content / Services
Regulation
Source: BDA
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Contact Details
I ndia: + 91 11 4700 3100China: + 86 10 8529 [email protected]
www.bdaconnect.com