dynamics of indian telecom industry 2009 v8
TRANSCRIPT
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
1/42
Dynamics of IndianTelecom Industry
Research ReportBy
Jyothin Madari
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
2/42
2
Executive Summary Third largest telecom network in the world Fastest growing Forecasted CAGR growth
rate of over 15.3% by the end of 2012
Monthly additions of above 8 millionsubscribers
Growth impetus from wireless segment with84% wireless and 16% wired
National teledensity at 22%, rural teledensity
at 7%, while urban at 57% 9 million Internet and 2.5 million broadband
subscribers Six major operators and eight minor operators
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
3/42
3
Future Outlook Need for massive investments in infrastructuredevelopment expected to require 330,000network towers from the present 100,000
Decrease in wireline subscriber base however
strong growth in mobile subscriber base Improvements in mobile quality of service, quick
service delivery, affordable pricing plans, and lowerhandset costs.
VAS* - Key revenue stream for mobile operators
Broadband penetration is low => high growthexpected New Technologies paving the way for new services,
additional revenue streams and rural penetration
* Value added-Service
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
4/42
4
Market Forces/Growth
Drivers
Subscribers
Infrastructure/Equipment
Burgeoning
MiddleClass
BoomingKnowledge
Sector High GDPGrowth
RisingIncomeLevels
GrowingUrbanization
YoungerPopulation
Handsets
ServiceProviders
Growth
Macro Economic Factors
Industry Specific Factors
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
5/42
5
Market Size & Growth Currently valued at $100B Telephone coverage in India rose to 34.5% in
Jan 09 from 33.23% in Dec 08. Growth spurred by fall in tariffs and fall in
handset prices Wireless accounts for nearly 70% of the total
telephone subscriber base
Total telecom subscribers growth rate duringquarter ending March 2009 11.68%
Total wireline subscribers growth rate forquarter ending March 2009 0.15%
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
6/42
6
Subscriber BaseTotal Telecom Subscribers (Wireline+Wireless)*
Total Subscribers 429.72 Million
% Growth QoQ 11.68%
Urban Subscribers 309.43 Million (72%)
Rural Subscribers 120.29 Million (28%)
Overall Teledensity 36.98Urban Teledensity 88.66
Rural Teledensity 14.8
* All figures for March end 2009
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
7/42
7
Teledensity
20.74 26.88
39.4548.52
66.39
81.06
135
7.02 8.9512.74
18.3126.22
33.23
58
1.57 1.73 1.835.38
9.46 13.13
25
0
20
40
60
80
100
120
140
160
2004 2005 2006 2007 2008 2008 (Dec) 2012
(%)
Urban Total Rural
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
8/42
8
Service TypesFixed-line
Mobile
Broadband
Internet Subscribers
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
9/42
9
ICT
*
Statistics Fixed Telephone lines per 100
inhabitants : 3.5
Mobile subscribers per 100inhabitants: 18.4
Internet subscribers per 100
inhabitants: 0.8 Broadband subscribers per 100
inhabitants: 0.22
*
Information and Communication Technology
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
10/42
10
Subscriber Base
(Fixed-line and Mobile)
40 39 39.42 38 37.9 37.75 37.96
100
150192.87
229 250
325
462
0
100
200
300
400
500
600
2006 Jun-07 Jul-07 Dec-07 Dec-08 Jan-09 2010
NumberofSubscribers(inmillions)
Fixed-line Mobile
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
11/42
11
Subscriber Base
(Broadband and Internet)
0.18
1.35
2.343.1
3.87
5.456.22
5
6
8
10.411
12.8513.54
0
2
4
6
8
10
12
14
16
2005
2006
2007
2007
(Dec)
2008
(Jan)
2008
(Dec)
2009
(Mar)
Numbe
rofSubscribers(
inmillions)
Broadband Internet
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
12/42
12
Fixed-line Telecom MarketTotal Wireline Subscribers 37.96 Million
% Growth QoQ 0.15%
Urban Wireline Subscribers 27.38 Million (72.13%)
Rural Wireline Subscribers 10.58 Million (27.87%)
Village Public Telephones (VPT) 5.61 Million
Public Call Office (PCO) 6.20 Million
All figures for March end 2009
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
13/42
13
Operator wise Market
Share of Fixed-line ServiceUrban+Rural Fixed-line Operators
BSNL
77.30%
MTNL
9.41%
Other
Private
Operators
13.29%
Urban Fixed-line Operators
BSNL
69.00%
Other
Private
18.00%
MTNL
13.00%
Rural Fixed-line Operators
Other
Private
0.35%
BSNL
99.65%
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
14/42
14
Mobile Telecom MarketTotal Wireless Subscribers 391.76 Million
% Growth QoQ 12.93%
Urban Wireless Subscribers 282.05 Million (72%)
Rural Wireless Subscribers 109.71 Million (28%)
GSM Subscribers 297.26 Million (75.88%)
CDMA Subscribers 94.50 Million (24.12%)
All figures for March end 2009
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
15/42
15
Development and
Penetration
3.1 5.0510.5
2237.4
58.5
105.4
180
0.86.4
10.919.1
44.2
85
0
20
40
60
80
100
120140
160
180
200
2000 2001 2002 2003 2004 2005 2006 2007
(millions)
GSM Subscriptions CDMA Subscriptions
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
16/42
16
Operator wise Total Market
Share of Mobile ServiceBharati Airtel
23.97%
Reliance18.56%
Vodafone
17.55%
BSNL13.31%
Tata
9.93%
Idea
8.96%
Aircel
4.73%
Others
2.99%
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
17/42
17
GSM vs. CDMA
Statistic* GSM CDMAShare of Prepaid 94% 0.7%
Incoming Minutes ofUsage per subscriber permonth
249 192
Outgoing Minutes ofUsage per subscriber permonth
235 164
Outgoing SMS persubscriber per month
30 10
ARPU# $4 $2
# Average Revenue Per User *March End 2009
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
18/42
18
Operator-wise MarketShare of GSM
BPL
0.73%
Bharati
31.60%
BSNL
15.71%
Idea
13.08%
Spice
1.39%
Vodafone
23.13%Reliance
6.73%
Aircel
6.22%
MTNL
1.41%
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
19/42
19
Operator-wise MarketShare of CDMA
Reliance
55.72%
Tata Teleservices
37.16%
HFCL
0.41%
MTNL
0.32%
Shyam Telelink
0.63%BSNL
5.76%
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
20/42
20
Internet Service
Total Internet Subscribers (including Broadband) 13.54 Million
% Growth QoQ 5.30%
Broadband Subscribers 6.22 Million
Wireless Data Subscribers
(i.e. through mobile handsets)
117.82 Million
Total International Bandwidth owned by ISPs 209 GB
Total National Bandwidth owned by ISPs 174GB
All figures for March end 2009
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
21/42
21
Operator wise MarketShare of ISPs
MTNL
15.69%
BSNL
53.62%
Bharati Airtel Ltd.
8.01%
Reliance
Communications
Infrastructure Ltd.
6.91%
Sify Technologies Ltd.2.99%
Tata Communications
Internet Services Ltd.
2.72%
Hathway Cable &
Datacom Pvt. Ltd.
2.50%
You Telecom Pvt. Ltd.
1.47%
Data Infosys Ltd.
1.83%Others
4.26%
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
22/42
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
23/42
23
Technology wise Market Share ofBroadband Subscribers
5.364
0.474 0.2440.042 0.02 0.074
0
1
2
3
4
5
6
DSL Cable
Modem
Ethernet
LAN
Fiber Leased Line Other
Sub
scriberBase(inm
illions)
All figures for March end 2009
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
24/42
24
Operator wise Market Share ofBroadband Service Providers
BSNL
57%
Bharati Airtel
13%
You Telecom India
Pvt. Ltd.
2%
Sify Limited
2%
Tata Communications
Internet Services Ltd.
4%
MTNL
11%
Hathway Cable &
Datacom Pvt. Ltd.
4%
HFCL Infotel Ltd
1%
Reliance
Communication
Infrastructure Ltd.
2%
Others
4%
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
25/42
25
ARPU & Pricing Trend
India has one of lowest mobile tariffs inthe world resulting in low ARPU
ARPU have been on the decline since2004 due to price wars and increasedcompetition in the mobile telecomsector
ARPUs continue to drop by 5% whiletariffs decrease further by 15% Low tariffs building margin pressure on
operators
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
26/42
26
Mobile Pricing/TariffsMobile Tariffs in Absolute ter
0.230.22
0.19
0.17 0.16
0.11 0.11 0.11
0.09
0.05 0.050.04
0.030.02
0
0.05
0.1
0.15
0.2
0.25
Belgium
Italy
UK
France
Brazil
Philippines
Taiwan
Argentina
Malaysia
HongKong
Thailand
Pakistan
China
India
USD
Lowest inIndia
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
27/42
27
Mobile Pricing/Tariffs
Tariff war has intensified in thepast few months and competition
has reached a new levelThe price war has spread to the
SMS segment as well, with
negative impact on operatorrevenues
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
28/42
28
ARPUs are falling
Effective margin/ min 2005
1.25
0.25
1.5
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
Cost per
minute
Margin Effective
rate per
minute
Effective Margin/min 2006
0.87
0.08
0.95
0
0.1
0.2
0.3
0.4
0.5
0.6
0.70.8
0.9
1
Cost per
minute
Margin Effective
rate per
minute
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
29/42
29
VAS (Value added Services)
More Lucrative for operators and contentproviders as some VAS at 14c make moremoney than voice at 3c4c.
VAS include, SMS, Ring tones, Caller tones Internet Data Access Mobile Commerce On-demand Music, Videos, Animation clips Contests/Voting Gaming Enterprise products (Email, Office, etc.) New Alerts/Match Scores
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
30/42
30
VAS Forecast and Growth
VAS
Revenues $500 million (thisincludes texting)
Parties involved Media contentproviders, Mobileoperators andaggregators
VAS
Revenues $10 Billion
Parties involved Media contentproviders, mobileoperators, aggregators,banks, Enterprises
2006
Forecast 2009-2010
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
31/42
31
Leading VAS and mobileapplication service providers
Indiagames
OnMobile
Mobile-2-Win
IMImobile
HungamaMobile
Mauj.com
VAS
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
32/42
32
Telecom AdministrativeFramework
Total of 22circles 4 Metros 5 A Circles 8 B Circles 6 C Circles
Each circle hasLDCAs (LongDistance ChargingAreas) and SDCAs(Short DistanceCharging Areas)
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
33/42
33
Telecom RegulatoryBodies
Government of India
Ministry of Communications &
InformationTechnology
TDSAT DoT TRAI
State ownedoperators
PrivateOperators
License Fees/Spectrum Charges
Timely policy and regulatoryinterventionhas ensured that Sectordevelopment has stayed on track.
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
34/42
34
Regulatory Bodies KeyResponsibilities
Agency Key Responsibilities
Department of Telecommunications(DoT)
Policy Formulation, licensing, wirelessspectrum/frequency management
Enforcement of wireless regulatory measurement
Standardization/validation of equipment, R&D, etc.
Telecom Regulatory Authority of India(TRAI)
Mandate for Tariffs, Interconnection, Standards forquality of service
Recommendatory: Licensing Timing, terms &conditions, License revocation, competitionfacilitation, etc.
Telecom Disputes Settlement & AppellateTribunal (TDSAT)
Adjucation and disposal of disputes between serviceproviders and/or a group of consumers
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
35/42
35
Upcoming Technologiesand Growth Areas
3G
WiMax
Network Infrastructure
Telecom Equipment Exports
Handsets
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
36/42
36
3G
MTNL and BSNL have launched 3Gservices
Other Private players are yet toobtain licenses
Expensive affair for operators to
upgrade to 3G 3G equipment upgrades will be
high
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
37/42
37
WiMax
The total base station equipmentmarket is estimated to be between
$50 million and $120 million forWiMax
Projected total WiMax connections
by 2012: 6.9 million
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
38/42
38
Network Infrastructure
The industry needs to addadditional capacity to sustain
growth Continuing trend towards import of
telecom equipment
Shared Wireless infrastructure like,share tower services, help reduceoperator costs by 15-18%
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
39/42
39
Telecom EquipmentExports
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2006 2007 2008 2012
(Projected)
(inRs.
Crore)
Exports fueled by localTelecom equipment
manufacturers
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
40/42
40
Handsets Market Share
Total (GSM+CDMA)
Others
8.40%
Sony-
Erricson
6.80%
Samsung9.50%
Nokia
53.70%
LG14.40%
Motorola
7.20%
GSMOthers
7.30%
Sony-
Erricson
8.90%
Samsun
g
9.00%
LG
4.40%
Motorol
a
7.80%
Nokia62.60%
CDMAOthers11.50%
Nokia
24.30%
Samsung
11.20%
LG
47.60%
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
41/42
Feedback/Questions
-
8/14/2019 Dynamics of Indian Telecom Industry 2009 v8
42/42