Daily downloads of around 1 million paid ringtones. averag

1
Indian Cellular Industry Current Status Future
Prospects

• T V Ramachandran, Director General
• September 21, 2005 _at_ New Delhi

2
Where Are We Today

• Cellular services started in India in 1995 GSM
  was the mandated standard.
• Above Government decision proved to be beneficial
  for India as GSM has been established as the
  dominant standard.
• As of August 2005, there were nearly 50 million
  GSM subscribers which constitutes 80 of the
  total cellular subs.
• The month of July and August witnessed record
  growth in GSM subscriber addition of about 2
  million.
• 75 of the new mobile subscribers in India choose
  GSM.
• There are 83 state-of-the art Networks of GSM.
• Roll out of services in more than 4,000 town
  cities and more than 60,000 villages.
• Total Private GSM Investments are over Rs 50,000
  crores.

GSM-Fixed Crossover achieved in April 2005.
3
GSM Growth Through the Years
CPP
3rd 4th Cellular
Sub figures in million
NTP99
Year ended April
Several points of inflexion in the past, have
given kick-start to improved cellular growth
4
Steeply falling tariffs have ensured affordable
services to a large subs base
Rates per minute have fallen by over 90 in the
last seven years.
Introduction of CDMA
Source TRAI Study paper No 2/2005
5
GSM - the Primary Driver of Growth
GSM constitutes around 80 of the cellular
market in India.
GSM
CDMA
Market share of GSM continues to rise steadily
6
GSM Increasing its Market Share Globally
Indian GSM industry is in sync with the
worldwide standards worldwide GSM constitutes
75 of the subs base and 80 of the monthly
additions.
GSM
GSM Launch
CDMA Launch
CDMA
7
Cellular Growth in India has Been Fuelled by-

• Increased Affordability through migration to
  Revenue Share.
• Intense competition
• Introduction of CPP from May 2003
• Growth in Pre-paids
• Increased rollout and coverage

All Leading to a surging Subscriber Base
8
GSM Penetration to the Common Man
Mobile has fast moved from a class service to a
mass service for the common man fuelled by
continuously falling tariffs and increased
coverage.
Better prices for the produce
Connectivity for the farmers
9
GSM Penetration to the Common Man

• Affordability has made mobile services the key
  plank for economic development.

Mandi Prices on the Move
Kerala Fishermen Call in their Catch
10
Revenues From VAS for GSM Industry
VAS Revenue composition for 2004 (in )
27
65
8
VAS shows promising trends, share in total net
service revenue increasing continuously
Source PWC Indian GSM Cellular Benchmarking
Study 2004
11
Revenues from VAS

• Revenue from the VAS segment is growing at the
  rate of 30 to 40 percent annually. At present,
  this segment accounts for 10 to 13 percent of the
  total revenue of a service provider,
• - Tim DeLuca Smith, Communications Manager,
• SmartTrust.
• Daily downloads of around 1 million paid
  ringtones
• average cost Rs 9 per ringtone.
• Around 100 million SMSs in a day
• Reality game shows like KBC 2, Fame Gurukul,
  Indian Idol, etc have massive reach and generate
  high revenues.

12
Popularly Used Value Added Services
Airtel Live portal with games, music, cricket,
stock, news, easy charge facility, logos, range
of voice activated services, games, missed call
alerts, Airtel Live, Hello Tunes
etc. Hutch Online Yahoo MSN Messenger, Java
based games, missed call alerts, logos, games,
news, stock, range of voice activated services,
Caller Tunes, etc. Idea Daily horoscopes,
cellular jockey to send musical greeting cards,
voice activated services, music, logos, news,
stock, movies, cricket, games, jokes, Dialer
Tones, etc. BPL Ringtones, logos, picture
messages, send-a-song, mobile gaming,
etc. Spice Ringtones, logos, picture
messages,SMS Chat, mobile gaming,
etc. Aircel Ringtones, logos, picture messages,
games, music, etc.
health tips
jokes
astrology
push to talk
ringtones
mobile gaming
13
Factors for High Mobile Potential

• High GDP growth rate
• Fastest growth amongst major democracies in last
  10 years
• Average growth of 5.5 in the nineties
• As per Goldman Sachs, India could emerge as third
  largest economy in next 50 years
• Rising Income Levels
• Per capita income rising by 4 in the nineties
• 4th largest economy in terms of purchasing power
  parity (PPP)
• Increased Urbanization
• With increased development of infrastructure,
  rural India will become increasingly mainstreamed
• High forex reserves
• Booming knowledge sector

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The Demographic Dividend

• The young ones The adopters of wireless
• 54 of the population, ie. 555 million below 25
  years age
• 45 of the population even below 19 years age
• The Working Age Group The Users of Wireless
• Indias working age population is steadily
  burgeoning
• 2001 59 of total
• 2006 62 of total
• 2011 63.4 of totalpeak representing 747
  million.more than entire population of Europe
  that year!!
• The Professionals The Heavy Users
• Increasing number of Professionals who are less
  price sensitive and require hi-quality
  information as well as commerce business
  services and applications

15
The Consumption Dividend

• The Rising savings rate - expected to grow from
  23 to about 30, - will result in increased
  consumer spending
• The Improving levels of affluence between 1995
  and 2002, nearly 100 million people became part
  of the consuming and rich class
• Liberalization children driving consumer
  behaviour Consumption vs. saving, accessing
  credit vs. living within means, different
  rankings of necessities and luxuries
• 462 million people in the consuming and affluent
  classes by 2006-07, with another 472 million as
  climbers
• 70.5 of population will be middle income in
  2006-07 as compared to 56.7 in 99-00
• High income group will rise to 11.7 from 6.9
• Even at a 6 CAGR based on PPP, market size will
  rise from USD 1500 billion today to USD 2700
  billion by 2010 and to USD 3400 by 2015

16
Potential of the Sector
Indian Cellular Industry has the potential to
reach about 200 million by 2007.
This will contribute in a significant and
substantial manner to overall teledensity target
set by the Government
17
Push Towards Next Generation

• India represents one of the most exciting
  opportunities for mobile services in the coming
  decade.
• We are already providing 2G and 2.75G services.
• The next big push would be the introduction of 3G
  services.

Early and expeditious introduction of 3G services
in India will hold the key to Indias mobile
success and its future dominance in mobile
telephony
18
3G in India

• 3G will be introduced in India by 2006.
• 3G upgradation for GSM is 3GSM (WCDMA).
• In India GSM constitutes 80 of the total
  cellular market this will form a ripe base for
  3GSM (WCDMA).
• Worldwide also 3GSM (WCDMA) drives the 3G growth.

19
GSM - Predominant Global Mobile Standard for 3G
As of date, 3GSM subscribers have crossed 30
million, accounting for around 70 of the 3G
market. GSM share continues to rise month after
month
20
Benefits of 3G for India

• 3G has a 4-5 times higher voice capacity than
  present 2G services.
• An ideal platform to deliver low cost voice
  telephony to Indian consumers.
• 3G has hi-speed data capabilities
• It will fulfill the content rich mobility
  experience for urban Indians.
• 3G will help in enhancing Indias competitiveness
  in the ITES / BPO segment.
• Extremely effective tool in driving penetration
  of the huge addressable market in the rural
  areas.
• 3G will also enable achieving the broadband
  objectives of the Government.

3G will integrate India and Indian consumer with
the far reaching developments taking place across
the world.
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Thank You! tvram_at_coai.in