Telecom 2015 five telling years

Agenda

• Recap of stage one and stage two• Scenario framework for Telco, 2015

– Standstill– Progressive– Surprise free– Disruptive

• Companies Standing• STAR 2015• Summary and conclusions

Agenda

• Recap of stage one and stage two• Scenario framework for Telco, 2015

– Standstill– Progressive– Surprise free– Disruptive

• Companies Standing• STAR 2015• Summary and conclusions

Agenda

• Recap of stage one and stage two• Scenario framework for Telco, 2015

– Standstill– Progressive– Surprise free– Disruptive

• Companies Standing• STAR 2015• Summary and conclusions

The telecom industry has undergone significant structural changeover the last decade; how will it evolve over the next 5 years?

• With growth of wireless telephony, land line volume is declining.• With increasing competition ARPU is declining . • VOIP and other INTERNET based telephony, bypass Telecom systems.• New technologies in Telecom, demand higher CAPEX with no scope of

matching ROI.• Price wars to somehow gain business volume; hamper income and the

business viability.• Stake holders are compelled to follow the market in pricing, in order to

retain market share.

-How will communications evolve over the next five years?

Four future scenarios

Agenda

• Recap of stage one and stage two• Scenario framework for Telco, 2015

– Standstill– Progressive– Surprise free– Disruptive

• Companies Standing• STAR 2015• Summary and conclusions

Standstill

USAGE: connectivity usage similar to today – personal, download etc.

Services: Packaged connectivity and communication services prevail.

Revenue model: Start war of tariff packages, emphasis on cost control.

Industry Structure: declining of small players

Access: will be depend on advanced technology, which will affect 2G,3G services.

Regulation: will be strict.

Agenda

• Recap of stage one and stage two• Scenario framework for Telco, 2015

– Standstill– Progressive– Surprise free– Disruptive

• Companies Standing• STAR 2015• Summary and conclusions

Progressive

USAGE:- Usage Will be high in this case

SERVICE:- Customer require premium connectivity

ACCESS:- Android and low cost phones drive this scenario

REVENUE MODEL :- Wholesale driven with premium connectivity a key feature for revenue generation Carriers are able to generate premium prices for ultra broadband.

INDUSTRY STRUCTURE:- A co-operative of horizontally integrated infrastructure providers catering to a myriad of asset-light service providers such as OTTs, Banks, Utilities, Governments etc.

REGULATION:- As it is today

TRIGGER / REALIZATION PATH FOR SCENARIO

Economic and Financial

Investment and Technology

Competition Regulation

Consumer and Markets

Investors confident of higher return

from open connectivity innovation

Widespread deployment of

ultrafast broadband

National govt. fund open

infrastructure for economic growth

Increase use/ availability of

connected devices

Current Positioning and Way forward

Scope of Wallet Business

• Scope of business for the MTM Service Provider.– Most money transactions are virtual money moves between

mTm-acc & mTm-acc within the MTM system. Therefore, most of real money remain within the system.

• Potential of MTM as a business.– There will be above billion phones in India soon.– With a minimum monthly average of Rs.10000/- transaction the

annual business will be a mind boggling sum of Rs. 120 Trillion.– The surplus liquidity available could be usefully deployed.

Critical Success AttributesProgressive

Funding model for open access networkinfrastructure

Accessibility in rural market

Dynamic BusinessDesign

Structurally separate Network and services

Potential Capability

Bharti Airtel

Vodafone Idea

Good Good Medium

Good

Excellent

Medium

MediumGoodGood

Good Good

Weak

Recommendations

Partnership with other infrastructure providers includingmunicipalities extend ultra-fast broadband coverage Collaboration with good Rural

retailer

Build modular business architectures based onstandards and flexible, common technology platforms

Create new operating model and organization tosupport structural separation

Innovative applicationSuch as M-Commerce

Excellent Good Good

Companies have to start some new Value added

services

Agenda

• Recap of stage one and stage two• Scenario framework for Telco, 2015

– Standstill– Progressive– Surprise free– Disruptive

• Companies Standing• STAR 2015• Summary and conclusions

Surprise Free

USAGE:- High Usage

SERVICE:- Increased customer adoption digital lifestyle services

ACCESS:- High access required specially in rural. areas

REVENUE MODEL:- Low because of immense competition

INDUSTRY STRUCTURE : Some emerging market providers expand globally.

REGULATION : Liberal policies.

Critical Success Attributes

SURPRISE FREE

INFRASTRUCTURE

3G

RURAL MARKET

VALUE ADDED SERVICES

NUMBER PORTABILITY

Potential capability

Airtel Vodaphone Idea

Good Good Medium

Medium(13)

Good

Medium(11)

GoodGoodExcellent

SecondFirstThird

Weak Medium

Good(9)

RECOMMENDATIONS

Shared infrastructure with reduced Capex and

increased connectivity.

INFRASTRUSTURE

Collaboration with good Rural retailers.

Generate more alternatives for consumers .

Improve Quality Service.

Agenda

• Recap of stage one and stage two• Scenario framework for Telco, 2015

– Standstill– Progressive– Surprise free– Disruptive

• Companies Standing• STAR 2015• Summary and conclusions

Disruptive

USAGE: Demand will be high

Services: Lasses faire

Revenue model: Typically lowering price (Skype)a

Industry Structure: More rivals are entering leading to competition

Access: High value services to customers

Regulation: Deregulation

Percentage of Active Subscribers(sources- TRAI)

Reasons - Multiple sim users or subscribers

signed up only for the freebies that came bundled with startup kits.

Most of the new operators are in the business of throwing Sims to collect a customer.

Unsatisfactory service by new providers.

Operator % of Active users operator wise

BHARTI 89%

IDEA 87%

VODAFONE 75%

RCOM 67%

AIRCEL 59%

BSNL 59%

MTS 46%

TATA TELE 45%

VIDEOCON 39%

UNINOR 31%

STEL 24%

Strategy In rural

• Studies the commercial viability of a rural based on parameters such as source of livelihood, average income, and involvement in frequent commercial transactions or travels.

• Qualifying villages are first to receive a base station• Bharti Airtel tracks the revenue generated per base station (instead

of ARPU, which is considered less relevant in a rural context).• Use of local languages, Vans.• Set up PCO’s to increase brand awareness and service.• Customer service centre are set up with the use of local employees • Bharti Airtel has already established over 18,000 service centers in

rural India, covering over 400 languages and local dialects

Future Strategy

• Changes in the organization structure

• QUALCOMM (US based company- has broadband license in four circle-Mumbai, Delhi, kerala & Haryana)

• Also keep an eye on- UNINOR, VIDEOCON, STEL.

• Additional 40,000 towers for rural market

Strength And weakness

• Strength– Very focused on Telecom– Leadership in fast growing telecom sector– Pan-India footprint

• Weakness

- Price competition from vodafone and idea

- Untapped rural market.

Rohit Kumar GuptaSunny TomarSaud HasanDeepak Kumar VermaRaghav MehtaVinod Kumar