Wireless Technology – India

1. Wireless Technology – India Dr. K. T. V. Reddy Principal PVPP college of Engineering, Sion Email: principal@pvppcoe.ac.in,ktvreddy@iitb.ac.in Web:www.pvppcoe.ac.in Governing Council Member, IETE, India SSS, ACT2012

2. Presentation Plan Telecom Industry Overview 1 2 Telecom – Investment Attracting Sector 3 Regulatory Framework and Its Impact 4 Emerging Trends in Telecom Market 5 Major Players in Telecom Sector 6 Growth Avenues SSS, ACT2012

3. Background • Relationship between telephony and economic development is well recognized • Teledensity has been a good indicator of economy • Establishing quantitative relationship has not been easy • From plain telephony to a converged technologyTelephone, computer, broadband, multimedia • All Packet communication • Cable TV • Digital, virtual and mobile SSS, ACT2012

4. Developing Countries • Mixed picture • Some highly motivated relatively smaller countries have performed better than much larger (richer?) countries • Literacy, social and cultural factors • Interest in ICT • Dealing with diverse languages and scripts • Poor basic infrastructure SSS, ACT2012

5. Technology Advances • Exceptionally favorable situation • Moving to All Packet Networks ( ~ 4G) • Mobile and Wireless Techs • Very large bandwidths • Rapid fall in costs • Technology as commodity SSS, ACT2012

6. Technology, some concerns • Not quite user friendly yet • Multiplicity of mutually incompatible standard and protocols • High costs • Handling local languages and scripts • Reliability and ruggedness SSS, ACT2012

7. India • Large Populations, vast area • Over 60% still in rural areas, significant illiteracyMore than 500,000 villages many still to be fully ‘served’ • Large internal ‘digital divide’, disparities in living standards, lifestyle, etc. • ICT, a key for rapid development (self driven) SSS, ACT2012

8. India, Some Positive Factors • Large, younger, tech savvy population, not burdened by history! • Exceptional popularity of the cell phone • Democracy,... may be chaotic! • Extensive use of English • Appearance of Roman script for Indian languages • Satellite TV, Cable and Multimedia • Mass market, needs new business model SSS, ACT2012

9. The Indian Scenario • Very slow growth till the 80s • Faster and faster growth from 90s • Impact of Privatization,  the Internet, the cellphone and affordability • Cellphone as a multiservice device • India has among the world's cheapest services • 8+ million cellphones added every month! • PCs and Broadband Internet SSS, ACT2012

10. Digital Technology Starts a Revolution in India in the 80s • Digital (PCM) switching and transmission • First digital switch in a village (Kittur) in 1986 • IBM PC, CMOS Technology, HLL, etc. • Demonopolization • Privatization  on a limited scale • Nationwide network of payphones • Low cost reliable international access from the remotest area • Ancillary industry • Enlightened leadership SSS, ACT2012

11. Present Situation • Currently 500 Million lines, 1000+ million lines in 2015 • More than 80 million lines added every month • Broadband DSL, slower growth still • Widespread usage of Internet, large number of ISPs, etc. • 3G yet to pickup • Attention to rural areas SSS, ACT2012

12. The Impact in the80s • The first digital rural exchange  in 1986 -The RAX • Better facilities than most urban areas • International dialing, etc. • Economic impact study by National Institute of Bank Management Pune • There was significant increase in bank deposits • Helped farmer in his business • Awareness of new technology SSS, ACT2012

13. Reasons for the success of RAX • Very innovative approach • Very inexpensive • Rugged • Low power, can handle irregular power supply • Simple to use, maintain and manufacture • Developed with village at the focus SSS, ACT2012

14. 90s and the rise of the Internet • Mostly data networks • Internet usage in academics and research • Businesses, government, education... • ‘Narrow’ band • Relatively expensive bandwidth SSS, ACT2012

15. The Convergence • Cheaper bandwidths • DSL based broadband to homes • All services, voice, data, video on a common data pipe  (IP) • Cable TV for broadband delivery • Digital Cinema • Integration of all services • Services with 100Mbps+ • Wireless emerges as a key technology, WiFi, WiMax, etc. • Cellphone as a very low cost transaction device SSS, ACT2012

16. Benefits • Digital divide still wide open • Benefits have not yet reached the village • Technology not yet affordable and manageable in rural areas • Expensive and not simple to use • Lot remains to be done in application development SSS, ACT2012

17. The Very Positive Side! • Key role in promoting India's IT industry • Helped expansion of  exports especially IT business • Highly affordable broadband service • Broadband IP (2Mbps) replacing the std telephone line • Strong support for smaller businesses, SOHO, etc. • Many new value added services • New opportunities for innovation based on intelligent integration of diverse technologies • Technology supporting individual freedom and democratic processes • The chaotic, young India simply loves it! • A self-driven process for development SSS, ACT2012

18.  Taking ICT to the Village • Several interesting initiatives coordinated by Swaminathan Foundation • A knowledge centre in every village • Many solutions driven by equipment suppliers, may not fully match the needs • The problem is not commercially attractive yet! • Good potential but no significant impact yet • Some problems with technology and affordability • The application and the technology yet to get together fully • The user may not be very comfortable yet • More field work, pilot trials and innovation required SSS, ACT2012

19. An Observation A couple of months back, the securities firm CLSA came out with detailed analysis of the Indian IT industry which revealed that: • 20-25% of India’s GDP expansion over the next 3-4 years will comefrom IT; • India’s IT exports will cross India’s oil imports from 2007/08onwards assuming that oil prices are at around $65 a barrel; • The IT industry –directly and indirectly—will pick up a third of theaddition to the urban labour force over the next three-four years. • Over the next three-four years, the IT industry will pick up around80-85% of India’s employable engineers. • One in seven income tax payers in the country will be a ITprofessional by 2010 up from the current one in ten. SSS, ACT2012

20. Regulatory Framework provides level playing field for all operators The Department of telecommunications (Government of India) is the main governing body for the industry. Telephone Regulatory Authority of India (TRAI) assists the Government of India (GoI) to take timely decisions and introduce new technologies in the country. Indian Telecom Industry Framework Indian Government Bodies Independent Bodies They undertake various research activities and monitor the quality of service provided in the Indian telecom industry. They also provide various recommendations to improve the status of telecom operations in India. They formulate various policies and pass laws to regulate the telecom industry in India. Handles spectrum allocation and management Wireless Planning and Coordination (WPC) Telecom Regulatory Authority of India (TRAI) Independent regulatory body DoT – Licensee and frequency management for telecom Department of Telecommunications Telecom Disputes Settlement and Appellate Tribunal (TDSAT) Telecom disputes settlement body Exclusive policy making body of DoT Telecom Commission Handles ad hoc issues of the telecom industry Group on Telecom and IT (GoT-IT) SSS, ACT2012

21. Various important regulations and laws have been passed in the Indian telecom industry post-liberalisation era Department of Telecommunication (DoT) is the main body formulating laws and various regulations for the Indian telecom industry. ILDservices was opened to competition BSNL was established by DoT Number portability was proposed (pending) Intra-circle merger guidelines were established Independent regulator, TRAI, was established Private players were allowed in Value Added Services Calling Party Pays (CPP) was implemented Attempted to boost Rural telephony Go-ahead to the CDMA technology 1999 2007 1994 2002 2005 2003 2004 2006 2000 Internet telephony initiated Unified Access Licensing (UASL) regime was introduced 1992 1997 INDIA Broadband policy 2004 was formulated—targeting 20 million subscribers by 2010 Decision on 3G services (awaited) National Telecom Policy (NTP) was formulated NTP-99 led to migration from high-cost fixed license fee to low-cost revenue sharing regime Reduction of licence fees FDI limit was increased from 49 to 74 percent Reference Interconnect order was issued ILD – International Long Distance SSS, ACT2012

22. UASL, CPP Lowering of ADC Telecom Tariff Order NTP 99 WLL Important regulations and their impact on the Indian telecom industry Unified Access Service License Regime (UASL) Unified licensing marked the end of the license regime in the Indian telecom industry. It helped in aligning convergent technologies and services. The establishment of the Unified Access Licensing Regime (2003) eliminated the need for different licenses for different services. Players are now allowed to offer both mobile and fixed-line services under a single license after paying an additional entry fee. This does not take into account national and international long-distance services and Internet access services. Access Deficit Charges (ADC) ADC makes it mandatory for a service provider at the caller’s end to share a percent of the revenue earned with the service provider at the receiver’s end in long-distance telephony. This subsidises the infrastructure costs of the service provider enabling access at receiver’s end, especially because rental for fixed-line services is low. Revision in the ADC regime is expected to be followed by further tariff reduction in telecom services. Universal Service Obligation (USO) The USO policy was laid along with NTP ’99 to widen the reach of telephony services in rural India. All telecom operators are bound to contribute 5 percent of their revenues to this fund. This system was put in place to bridge the wide gap between urban and rural teledensity, bringing it down from the current 31 percent. Initially, only basic service providers were under the purview of USO. Later, its scope was expanded to include mobile services also. Although it increases the cost burden for the telecom companies, USO helps in building the telecommunication infrastructure in the rural areas. SSS, ACT2012

23. FDI and other M&A activities increasing in number Major trends in the telecom sector is increasing M&A activity, de-regulation of telecom policies and growing interest of international investors. Recent Deals in Telecom Sector The Indian telecom industry has a 74 percent FDI limit in the telecom services segment. The GoI has permitted 100 percent FDI in manufacturing of telecom equipment in India. Vodafone purchased stake in Hutch from Hong Kong's Hutchison Telecom International for USD 11.08 billion. FDI in Telecom Sector Reliance Communications Limited has sold a five percent equity share capital of its subsidiary Reliance Telecom Infrastructure Limited to international investors across the US, Europe and Asia. The deal was worth USD 337.5 million. Telekom Malaysia acquired a 49 percent stake in Spice Communications for USD 179 million. The Indian telecom industry has always attracted foreign investors. In fact, the cumulative FDI inflow, during the August 1991 to March 2007 period, in the telecommunication sector amounted to USD 3,892 million. It is the third largest sector to attract FDI in India in the post-liberalisation era.FDI calculation takes into account radio paging, cellular mobile and basic telephone services in the telecommunication sector. Maxis Communications acquired a 74 percent stake in Aircel for USD 1.08 billion. Ericsson to design, plan, deploy and manage Bharti Airtel network and facilitate their expansion in the rural areas, under a USD 2 billion contract. SSS, ACT2012

24. Major Players in different segments of Indian telecom industry Basic Services Operators MOBILE SERVICES GSM Services Operators BSNL Airtel MTNL Vodafone Reliance Idea TTSL Reliance BSNL Internet Services Operators BSNL CDMA Services Operators MTNL Reliance Reliance TTSL TTSL BSNL Airtel MTNL – Mahanagar Telecom Nigam Ltd. TTSL – Tata Teleservices Ltd. SSS, ACT2012 BSNL – Bharat Sanchar Nigam Ltd.

25. Emerging technologies – 3G and WiMax to assist in penetration of telecom services in India 5 • The Indian government plans to auction the spectrum for 3G services by inviting bids from domestic as well as foreign players, and creating a competitive environment that offers better services to consumers. Therefore, the 3G spectrum is among the major investment opportunities and growth drivers of the telecom industry. • The immense potential for 3G is reflected by the 30–40 percent annual growth in Value-Added Services. • Cell phone manufacturers are striving to develop USD 100 priced 3G handsets for the Indian market. • India expects to replicate its 2G growth in 3G services. 6 • WiMAX has been one of the most significant developments in wireless communication in the recent past. Since this mode of communication provides network access in inaccessible locations at a speed of more than 4 Mbps, it is expected to be a major factor in driving telecom services in India, especially wireless services. Thus, it will lead to the increased use of telecom services, Internet, value-added services and enterprise services. WiMAX is expected to accelerate economic growth and assist in providing better education, healthcare and entertainment services. • It is estimated that India will have 13 million WiMAX subscribers by 2012. • Aircel is the pioneer in WiMAX technology in India. • The state-owned player, BSNL, aims to connect 74,000 villages through WiMAX. • Bharti, Reliance and VSNL have acquired licenses in the 3.3GHz range to utilise the opportunities offered by this domain. SSS, ACT2012

26. Saturation Period Start-up Period Fastest growth period 90％ India 0.45％ 50％ Key Point 10％ India 30% S-Curve in Addressable Market: affordable population excluded population under poverty line and below 15 years old Huge Potential of Indian Broadband Markets Indian Broadband Subs Penetration S-Curve in Addressable Market Source: TRAI • Broadband markets is still in its infancy stage with low penetration rate. • A big gap with other developing/developedcountries anticipates a huge potential. SSS, ACT2012

27. Hype Cycle for Wireless networking Infrastructure Expectations Time Peak of Inflated Expectations Trough of Disillusionment Slope of Enlightenment Innovation Trigger Plateau of Productivity Years to Mainstream Adoption: obsolete before plateau less than 2 years 2 to 5 years 5 to 10 times more than 10 years • For a new technology, people are usually keen on the advantages. Their overenthusiasm generates the peak of inflated expectations. • When the new technology is put into commercial use, people find that there is a variety of limits. Thus the trough of disillusionment occurs. • The new technology enters the stage of practical application and enjoys stable development in line with the commercial law. • WiMAX 16e is entering the stage of practical application. In the following years, WiMAX 16e will see broad application throughout the world. 16e+ is available at the end of 2010, WiMAX is about 3 years ahead of LTE in the Product chain. LTE WiMAX 16m WiMAX is entering the stage of practical application WiFi LTE-Advance HSPA+ WCDMA EV-DO Rev. B HSPA TD-SCDMA WiMAX 16e M2M WiMAX 16e+ Cloud Computing Source：Gartner SSS, ACT2012

28. Indian Telecom Statistics SSS, ACT2012

29. Existing Operators SSS, ACT2012

30. Thanks! • Sources • DOT • TRAI • COAI & AUSPI • Ernest & Young • IMRB • BDA • Telecom India Daily (internal research) • ……..open internet SSS, ACT2012

31. Conclusion • India has benefited immensely from ICT • It has given an opportunity of rapid economic and social development SSS, ACT2012

32. Thank You ! SSS, ACT2012