India Telecom Market – Current and future

1. India Telecom Market – Current and future Keynote Presentation By NK Goyal, President CMAI Chairman Emeritus, TEMA. Vice Chairman ITU APT Chairman, ITPS Dubai Member, Governing Board Telecom Equipment and Services Export Promotion Council (Govt. of India) at AMDOCS INDIA 10th of April 2012   www.nkgoyals.com, www.cmai.asia;

2. CES, 2009 being inaugurated and ribbon cutting at Las Vegas on 8th January, 2009 by NK Goyal with Sir Howard Stringer, Chairman & CEO of Sony Corporation, Mr. Tom Hanks, the American movie star, Mr.Gary Yacoubian, Chairman CEA & President of Myer-Emco AudioVideo, Mr. Gary Saprio, Vice President of CEA, Ms. Qu., Presixdent, CECC China, Mr. Patrick Lavelle, President and CEO of Audiovox, Mr. Peter Lesser, President and CEO of X-10 (USA) Inc, Mr. Loyd Ivey, Chairman and CEO of MiTek Electronics and Communications, Mr. Jay McLellan, President and CEO of Home Automation, Inc. (HAI), Mr. Mike Mohr, President of Celluphone, Mr.Grant Russell, President of Kleen Concepts 

3. About CMAI CMAI prime Integrated Association of India representing all verticals of ICE, telecom sector of India in India having 48.600 members and more than 54 MOUs with International organizations with branch offices in USA, UK, Japan, Korea, Singapore, Taiwan, China and Malaysia. It offers one window service for information dissemination, guidance on setting up businesses in India. It connects to Industries, Government, Trade and Business It is involved in policy formulations with Government and other stake holders or Technology Innovations, Indigenous manufacturing It is developing scientific knowledge and practical means for protecting human ecology and environment from the harmful effects of environmental hazards like e waste, radiation etc. It assists manufacturers to maximize competitiveness in the domestic and international markets. It also offers consultancy services on turn key basis through its member companies

4. Advantage India • GDP crossed USD 1 Trillion Mark • 4th largest economy in World when adjusted for purchasing power parity • Growing well in excess of 8% per annum for last three years. Current GDP Growth 7.5 to 8.5% • USD 380 Bn. Projected infrastructure investment in next 5 years www.cmai.asia

5. Dynamics of Indian Telecom Market • Indian Telecom Sector has been masterpiece of liberalization becoming world’s highest monthly addition, second largest base in world, lowest tariff, largest number of operators, new innovative ways of doing business, world’s smallest recharge, world’s lowest cost handset etc. • Wireless, Internet has dramatically changed the living style, economics, social engineering • Subs Feb end 943.49 Mn., Wireless 911.17 Mn. VLR 670.56 Mn. • Broadband 13.54 Mn. • 22 Telecom Circles, 277 Licenses issued • 188 Licenses to only GSM Network. • 30 Licenses to only CDMA Network. • 59 Licenses issued to both GSM and CDMA network. • And 92 Licenses are modified for 3G network. • Indian Telecom sector now known for world’s largest controversies, ambiguities www.cmai.asia

6. India Telecom Investment Opportunities • Second largest telecom penetration, world’s highest monthly additions. 943 Mn. Subscribers • Indian Telecom sector to witness huge investments to the tune of $ 110 Bn. during 2012-2017 • Telecom Subscribers to cross 1.5 Bn. by 2015, 5 Bn. by 2020. • About 25 per cent ( Appx. 300 million) would be 3G/4G subscribers, which would require scaling up the infrastructure. • About $70 Bn. estimated investment for green field 2G, 3G/4G and WiMax networks, while $ 25 Bn. would be required to set up an extra 200,000-odd telecom towers across the Country. • The total investment in the pan-India Broadband rollout is expected to be $ 20 Bn., while another $ 20 Bn. will be invested in augmenting the transmission network. www.cmai.asia;

7. Innovative ways • Most economical way of doing business, lowest tariff highest profitability • Managed services contract for network and IT services • Lowest recharge less than 20 cents • Missed call concept • SMS based earnings due to TV games, greetings, jokes, social networks, VAS contents • Lowest acquisition cost for new connection ..half dollar for life time • 92% prepaid connections....low cost of recovery • Multiple choice of technology and vendors • Handset bundling…...handset less than ten dollars • Broadband bundling…PC on loan www.cmai.asia;

8. Issues in News • 2G So alleged Scam • Broadband failure • Failure of Domestic Manufacturing • Radiation and Health Issues • Supreme Court Judgment • Licensing and Spectrum

9. SC Judgment • First come First Serve FCFS…flawed • Sep07-March 08 process challenged • 122 licenses quashed, to be operative after 4 months • No decision on licenses issued between 2001 and Sep. 2007, as parties not in proceedings • TRAI to recommend for grant of license and auction of spectrum

10. Licensing…Decisions awaited • NTP 2012, IT Policy 2012, Manufacturing Policy To provide medium and long term prospective, stable & forward looking regulatory environment, better informed spectrum auctions • Quashing of 122 licenses, roadmap for auction of spectrum and policy for licensing, treatment of spectrum and license fees already paid • Auction of 3G, 4G as also future 2G • UASL Licenses not to be linked with Spectrum. However may be required when spectrum is to be auctioned • Unified Licenses without spectrum • Uniform 8% License fee for all Telecom Licenses • Licensing fees for IP-I Service Providers www.cmai.asia

11. Spectrum….Clarity required • Spectrum initially 2.25+2.25….4.4+4.4…TDSAT says right upto 6.2….ambiguity beyond 6.2 • According to the Supreme Court Order all new licenses/spectrum by Auction Price for all spectrum including initial earlier 4.4MHz. • Decision awaited on charging the existing operators for the spectrum including 4.4MHz and 4.4 to 6.2MHz and beyond • Decision on Spectrum Refarming • Policy for operators to acquire additional spectrum • Spectrum pricing for Extension beyond current 10 years validity www.cmai.asia

12. Mergers and Acquisitions…Decisions awaited • Clear Policy for mergers upto 35% of market share and for mergers beyond 35% • Clear Policy for Spectrum holding of merged entity to be maximum 25% for GSM and 10MHz in CDMA in license area • Clear Policy for equity and cross holding, lock-in period, treatment of spectrum beyond permissible limits. • Decision announced that spectrum sharing not allowed for 3G, but for 2G clarity awaited. • Clear Policy for spectrum pricing for merged entities within and beyond permissible limits www.cmai.asia

13. Mobile Handset Market • Over 2 Bn. people worldwide will own at least one smart phone in 2015, with unit sales growing over 175% from 2010. (Parks Associates ) • Global mobile handset industry valued at appx $133bn in 2009 likely to grow at CAGR of 17.1% during 2009–14 to reach $293bn by 2014. • India and China largely driving growth of smart phones in Asia Pacific, which constituted 47% of total of 112 Mn. shipments during 2009. Likely to grow more than 50% by 2014 with total shipment forecasted 712 Mn. • Smart phones contributed 79 % of profits during 2009 even though market share was hardly 17%. www.cmai.asia

14. THANKS…. Great Indian Opportunity www.cmai.asia, www.nkgoyals.com. www.cmai.org.in +91 98 111 29879 http://in.linkedin.com/in/nkgoyals, http://www.facebook.com/nkgoyalcmai