Growth Strategy to Achieve 250 Million

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Growth Strategy to Achieve 250 Million

• T V Ramachandran, Director General
• April 19, 2006 _at_ New Delhi

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Mobile Growth is Providing Huge Benefits to
Economy

• As per a Ovum study for 2004,
• Economic benefits that have resulted to India
  are
• 3.6 million jobs generated directly or
  indirectly.
• Employment dependent on the industry expected
  to rise
  by at least 30 over the next 12 months.
• Mobile industry generates
• Rs.14500 crores per annum for the Government.
• An annual GDP contribution of Rs. 31300 crores.

All above only from 48 million mobiles and 25
pop coverage!!
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Present Status

• 90 million mobile subscribers as of March06
• Over 5 million additions per month
• We are well on course to reach 250 million

Million
Year Ended March
We now have to target to reach 500 mn by 2010
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Where Will the Growth Come From?

• The New Subscribers to come mainly from the rural
  areas
• requires high capital expenditure
• Tariffs ARPU in India are one of the lowest in
  the world
• leaves operators with inadequate free cash
  flow

Spirit is willing, but flesh weak!!.......
We Need a Paradigm Shift in Our Approach
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I. The New Growth Strategy for 500 Million

• Harnessing the forces of coopetition while
  nurturing the spirit of competition
• Historic initiative of sharing towers in urban
  areas by operators Project MOST
• Subsidy support from the Universal Service Fund
  for creation of shared wireless infrastructure in
  rural remote areas
• Operational efficiencies are increasing Opex
  per subscriber brought down by 80 in the last 5
  years
• Needs to be further brought down by
• Outsourcing of non-core activities to reduce cost

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II. The New Growth Strategy for 500 Million

• Joint Planning for Interconnection Timely
  availability of interconnection increasingly
  important for growth
• Possibility of interconnect exchange to be
  explored
• It will improve service quality, service range
  and service availability for customers.
• Spectrum More spectrum essential for growth
• Defence concerns to be addressed to enable
  expeditious vacation of spectrum
• To improve revenues, operators need to cater to
  customer requirements through-
• Joint Content Development to develop local
  content for new markets
• SMS based learning programmes
• Mobile Music Already the mobile music download
  revenues are of the size of the music industry

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III. The New Growth Strategy for 500 Million

• Cooperative Fraud Management Industry bad debts
  _at_ 2.5 i.e. well over 700 crores
• Operators need to join hands and share data for
  Fraud Management
• It will help reduce avoidable churn and Bad Debts
• Corporate Social Responsibility Cooperation to-
• Control Spam
• Enforce safeguards with respect to use by youth
• Deal with Disaster Management
• Inventory Sharing
• To reduce cost

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Growth Strategy to Reach 500 Million Review of
Government Levies Required

• Indian telecom sector, the most highly taxed
  sector as compared to international benchmarks
• High levies act as a major hurdle for spread of
  service
• Government should lower the levies on telecom
  sector
• In spite of lowering of levies, the revenues to
  the government would be fully protected and there
  is no loss of revenues to the exchequer
• Even an annual reduction of 50 in the revenue
  share license fee will not reduce the revenues of
  the government, on the contrary, they would
  continue to rise significantly

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Growth Strategy to Reach 500 Million Review
of Government Levies Required
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Conclusion

• Indian Mobile Potential Globally one of the
  Highest
• However, Coopetition among service providers
  essential to effectively tap potential
• Working together would be a Win-Win for all
  Consumers, Government and Service Providers

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500 Million by 2010 is Surely Possible !!
Million
Year Ended December
Actual
Let us make it happen through coopetition
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Thank You! tvram_at_coai.in