GROWTH OF DOMESTIC TELECOM MARKET IN INDIA POTENTIALS FOR INVESTMENT AND BUSINESS FOR FOREIGN PLAYERS A CASE FOR KOREAN IT FIRMS

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GROWTH OF DOMESTIC TELECOM MARKET IN INDIA
POTENTIALS FOR INVESTMENT AND BUSINESS FOR
FOREIGN PLAYERS A CASE FOR KOREAN IT FIRMS

• by
• VINOD VAISH
• Former Secretary DOT, Member TDSAT
• DIRECTOR CMAI
• 10th June, 2009 Seoul, Korea www.cmai.asia

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Telecom Administration in India

• Government of India- Department Of Telecom (DoT)
• - Policy making and Licensing
• Telecom Regulatory Authority Of India (TRAI)
• - Recommendatory Body for Licensing in Telecom
  And Broadcasting and Regulator for
  Telecom and Broadcasting
• Telecom Dispute Settlement and Appellate Tribunal
  (TDSAT)
• - Adjudicating Body for Telecom and
  Broadcasting Disputes

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Functions of Deptt. of Telecom

• Telecom Policy Formulation
• Telecom Licensing
• Wireless Spectrum Management
• Universal Service Obligation
• Standardization, R D
• Administration of
• Indian Telegraph Act
• Indian Wireless Telegraphy Act
• Telecom Regulatory Authority of India Act

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Major Milestones of the Indian Telecom Sector

• 1991 Liberalization of Telecom Sector .
  Manufacturing opened to private participation
• 1992 Bids invited for Mobile services in
  Four Metros and the Radio Paging in 27
  cities in the country licensed
• 1994 Mobile and Basic Services opened for the
  private sector in the country
• 1997 Establishment of Independent Regulator
  (TRAI)
• 1999 Migration to revenue share

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Major
Milestones of the Indian Telecom Sector
contd

• 2000 Establishment of TDSAT
• NLD sector opened up
• Corporatisation of the
  operating arm of DoT-Formation of BSNL
• 2002 -- ILD Sector Opened up for private
  participation Limited Internet
  
  Telephony permitted to ISPs

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Major
Milestones of the Indian Telecom Sector
contd

• 2004- Broadband Policy Announced
• 2005- Full Internet Telephony
  permitted to UASL Licensee

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Telecom Service Licenses-
Area of Operation
License Service Area
Access Services (CMTS Unified Services) (19Circles3 Metro)
National Long Distance (NLD) -All India
International Long Distance (ILD) -All India
Internet Services including Internet Telephony - All lndia Service Area
Very Small Aperture Terminal Service ( VSAT) -All India
Public Mobile Radio Trunk Service (PMRTS) - All India
Global Mobile Personal Communication by Satellite (GMPCS) - All India
INSAT MSS - All India
Mobile Number Portability Service - Zonal ( 1 2)
Other Service Providers (Including BPO) - All India (Registration)
Infrastructure Providers (IP-I) - All India (Registration)
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Telecom Service Users in India as on
March 2009

Wire Line Subscribers 37.9M (10.68 Rural)
Wireless subscribers 382M (GSM 75.4 CDMA 24.6)
Internet Subscriber 12.85M
Broadband Subscriber 5.52Million(4.7M on DSL 0.485M on cable rest on Fiber, wireless, leased line and other technology)
VSAT Services 0.1 Million VSAT Terminals
Public Mobile Radio Trunk 35000
Annual Gross Revenue of Telecom Sector US 10 Billion
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Opportunity Highlights in Indian Telecom

• One of the fastest growing In the world
• - ( Adding around 10-15 Million in a Month)
• More than 430 Million Subscribers in April 2009
• State of the Art Networks GSM, CDMA, IP
• Penetration Rate(30) remains lower than
  comparable markets, offering potential for rapid
  growth
• Consumer data services remains a largely untapped
  opportunity
• Government encourages both existing as well as
  new entrants

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Opportunities/ Potential Areas for
Korean companies in India

• 3G and Broadband Wireless Access and applications
• Triple Play Services
• Next Generation network and services
• Cell phones , 2G 3G Fastest growing Cell
  phone market.
• FTTH ( Fiber To The Home) -Passive Optical
  Networks
• Value added services in Mobile segment
• Transition from Ipv4 to Ipv6 in Indian Network
• Voice on IP protocol (VOIP) and Internet
  Telephony
• Security Equipment for IP networks (Internet, NLD
  ILD)

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3G and Broadband Wireless Access and
applications

• The Government of India intends to allot spectrum
  Blocks in the 2.1 GHz, 2.3 GHz and 2.5 GHz Bands
  through a fair and transparent process
• Separate auction for 2.1 GHz (3 G Auction ) and
  2.3 GHz and 2.5 GHZ bands (BWA Auction)
• Allotment to be carried out on service area wise
  basis though there will be a simultaneous auction
  for all service areas
• 3G auction in 2.1 GHz up to four blocks 2x5 MHz
  One additional block reserved for BSNL/MTNL
• 4 blocks of unpaired 20 MHz in2.3 and 2.5 GHz.
  One block allocated for BSNL/MTNL remaining 3
  blocks to be auctioned

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Contd.

• As India braces for 3G roll out, newer and value
  added applications will be possible through this
  platform and vendors and developers will have
  untapped opportunities
• Similarly in BWA ample opportunities will be
  available for such applications

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TRIPLE PLAY SERVICES

• Broadband Triple play converged services
  (data/video/telephone) permitted for UASL
  Licensees.
• IPTV holds a promising future for India.
• Target of achieving 20 million broadband by 2010
  could also be helped by IP TV
• Major service providers are planning roll out of
  triple play including IP TV

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Next Generation Network and
Services

• Major Telecom Players have started switching
  towards IP based Next Generation Networks
• Korean companies can venture with Indian
  companies to offer NGN Networks /equipments
• Some of the NGN services that will find very
  good market in the country are Real Time voice
  and video conversational services, Audio video
  and Text conferencing, content delivery services
  such as radio / video streaming, Video on demand
  , broadcast IPTV, messaging etc

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Cell phones , 2G 3G and CPE for
BWA

• Korean companies have significant market share in
  cell phone handsets.
• India expects 500 million cell phones by 2010
• The launch of 3G holds a promise for good
  business in this segment

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Passive Optical Networks and FTTH

• Leading new technology for broadband access
  promising bandwidth for new generation
  applications such as HDTV , interactive gaming
  etc
• Korean companies have expertise of deployment in
  their country . It has gained reputation for high
  performance, low cost and exceptional stability
• Indian Telecom Service Providers have plans for
  its deployment in the country e.g. Reliance in
  Mumbai

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Value added services in Mobile segment

• The following services are popular in India
• Personalized service like ringtone download
• SMS based services
• Mobile TV
• Video on demand
• games

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TRANSITION FROM IPV4 TO IPV6 NETWORK

• Korean Govt. has planned for full migration to
  IPV6 by 2011
• India is also planning to move toward IPV6
  keeping pace with international community
• Korean companies can explore this important
  segment of business in India since they are the
  leading players in this area.
• Lawful Interception Systems in India to be
  upgraded to IPv6
• By December 2010 all new equipment shall have to
  be IPv6 compliant

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Voice on IP protocol (VOIP) and Internet
Telephony

• Voice on IP permitted to NLD/ILD for
  transportation of traffic within their networks.
• Phone to phone internet telephony permitted to
  UASL licensees.
• Restricted internet telephony permitted to ISPS.
  
• Proposals under consideration to further
  liberalize internet telephony.
• Internet Telephony and voice hold a promising
  future for companies and players in this segment.

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SECURITY APPLICATIONS

• More and more IP networks are being introduced
  in the Indian telecom network there is a good
  requirement of security applications from the
  service provider, security agencies
• To name a few those required by ISPS / NLDs/ ILDs
  for their IP operations.

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BRIDGING THE DIGITAL DIVIDE

• A major chunk of Indian Population resides in
  rural areas
• It has thrown a challenge to provide rural
  connectivity for voice, video and data.
• The telecom companies are encashing this
  opportunity and the rural India has started
  giving them good revenues and profitability
• There is lot left for businesses in rural India
  and telecom has a major share left into it
• Korea can venture to offer a technology suiting
  to rural India

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