Marketing & NGN: Contextualizing to Emerging market needs

1. FORUM ON NEXT GENERATION STANDARDIZATION (Colombo, Sri Lanka, 7-10 April 2009) Marketing & NGN: Contextualizing to Emerging market needs Mohan Krishnan, IMRB International

2. Agenda • What is Anywhere? • Emerging market situation: Case of India • Implications for NGN rollout and marketing

3. Who are we? • One of the oldest Market Research company in South Asia – IMRB, LMRB & part of £7.5 Bill WPP Group Plc., • Partnering in India & Middle East with Yankee Group, official industry Analyst for ITU

4. What Is Anywhere? Our vision for how ubiquitous connectivity transforms consumers, enterprises and the world we live in.

5. Anywhere Is a Revolution Battles underway and ahead will transform the world we live in. It will bring the largest technology change in our lifetimes.

6. Anywhere Will Surpass the Internet’s Impact

7. The Anywhere revolution includes major battles underway

8. The Anywhere network must serve multiple masters

9. Anywhere is causing a new kind of customer to emerge

10. The Five anywhere consumer segments • Actualized Anywheres are the most Anywhere in their behaviors • Outlet Jockeys are Anywhere on the go, but not at home • Digital Shut-ins are somewhere at home • Technophytes are later adopters, driven by price cuts • Analogs are uninterested in technology but will grudgingly be pulled along—eventually

11. Consumers’ Anywhere behaviours are in transition • Connectivity behaviors are undergoing change in all regions as new services emerge • These are more powerful differentiators than conventional demographic segmentation methods • Providers of services must understand the varying needs and attitudes of consumers in their market, and tune offers differently

12. Anywhere is transforming workplace too

13. The Three Stages of Anywhere

14. Where Will Anywhere Happen? 16 countries reach the Anywhere tipping point by 2012

15. Emerging Market lessons “India” – a case in point

16. India : One of the few growth markets this year • India likely to overtake Italy, France and Germany’s GDP by 2015 • Indian economy would be performing better than Brazil and Russia in this front. • 30% of India’s population will be between 25-44 years of age in 2020 • The young and earning age offers huge potential

17. Growing top 3 segments A huge base 2.6 mln HHs 15 mln people THE VERY RICH THE CONSUMING CLASS 46 mln HHs 265 mln people THECLIMBERS The direction of change 74 mln HHs 429 mln people THE ASPIRANTS 33 mln HHs 192 mln people 24 mln HHs 140 mln people THE DESTITUTE 2006-07 2001-02 5.2 mln HHs 30 mln people 76 mln HHs 432 mln people 82 mln HHs 472 mln people 20 mln HHs 117 mln people 17 mln HHs 95 mln people Source : Indian Market Demographics, NCAER

18. The Internet Usage Hierarchy In Millions A Sept 2008 study by IMRB estimated Internet user in rural India at 5 million (out of 750 million) Source: I-Cube 2008, IMRB International

19. Internet user market • A Internet Ever Userdefined as one who has ever accessed Internet • This population is already higher than the population of countries like UK, Canada, South Africa, Spain, etc. In Millions Base: All India Estimates Source: I-Cube 2008 Knows Computers Internet Ever User Active Internet User Source: I-Cube 2008, IMRB International

20. Application usage has diversified significantly in recent times Source: I-Cube 2008, IMRB International

21. E-commerce is growing rapidly Source: I-Cube 2008, IMRB International & IAMAI

22. Public access has been the main reason for growth of user base 15.4 mn 3.1 mn 4.9 mn 7.5 mn 13.2 mn 17.9 mn 1.4 mn Source: I-Cube 2008, IMRB International

23. However, network deployment lags demand Source: IMRB analysis

24. And, BB deployment target continues to be missed Source: CII-IMRB-IBM study 2004 Source: TRAI

25. Policy makers in emerging markets will be forced to give priority to BB growth Congress Manifesto: All villages connected to broadband in next three years. BJP Manifesto: Create 1.2 million IT-enabled jobs in rural areas, drastic reduction in computer prices, broadband connectivity to every village in five years. Promote ‘open standard’ and ‘open source’ software.

26. LLU & BB • Between 2004 to 2007 the numbers of wireline telephone connections have reduced from 40 mn to 33 mn. • Connections in urban areas have reduced from 26 mn to 22 mn • With only 25% of network having ability to deliver BB, we can add best add 3.5 million BB subcribers • This year, BSNL launched an initiative to offer wireline connections bundled along with broadband services in Bangalore. Result: 0.1 mn new connections out with 60% BB subscribers. Rs 120 trillion loss since 2004

27. USOF • The USOF has about USD 1.5 billion in undistributed funds (In 2009) Need innovative mechanisms to enable direction of funds to BB Source: LIRNAsia

28. Shared access through Govt. intervention in rural markets: CSC – Common Service Centre • National eGovernance Plan (NeGP) envisions a “web-enabled Anytime, Anywhere access” to information and services in rural India • 100,000 CSC to be rolled out • Govt. saved money in PPP auction given enthusiasm of private players • BB connectivity is a big issue • Multiple technologies being deployed which will create problems later • Chicken-egg issue – connectivity & content • History of past failure – need to provide a lesson

29. One key message:

30. Emerging Markets Do Not Support Traditional Subscriber-Centric Business Models Value in the Subscriber Verizon Wireless Sprint H3G Vodafone ARPU or Equivalent Vonage TIM China Mobile Value in the Community Yahoo! eBay Facebook Google YouTube Skype Sling Media Number of Users Source: Company Annual Reports and Yankee Group

31. More important to drive value from community – mobile tariff example

32. MVAS ecosystem provides some clue to drive utility of NGN Source: IMRB-IAMAI study, June 2008 Rs. 1 cr = 10 Million, 1 USD~ Rs.50

33. Marketing implications for the Next Gen Networks providers

34. Guidelines for Technology vendors & Service providers • Develop your solutions to address price sensitivity in the Indian market. • Incorporate robust professional and managed service capabilities into the market solutions. • Design solutions that can overcome deficiencies in supporting infrastructure, such as electricity and available backhaul solutions. • Anticipate and capitalize on opportunities that will emerge as low-cost network computing devices become available. • Capitalize on opportunities to export capabilities developed in India to other emerging markets.

35. Guidelines for Technology vendors & Service providers • Recognize the strong correlation between broadband penetration and economic prosperity. • This necessitates accelerated licensing and a focus on enabling technology. • Seed opportunities to commercialize universal service initiatives in rural areas. Initiatives such as eHealth and distance learning have broad applicability across many emerging markets. • Aim for rural broadband initiatives to bolster existing industries.

36. Thank You Mohan.Krishnan@imrbint.com