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GLOBAL TELECOM UPDATE - 2013

www.MarketResearchReports.com

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GLOBAL TELECOM UPDATE 2013 1



2012 was an eventful year for telecommunication industry. In 2013 keychallenges for telecom companies will be how to monetize new business

models, leverage customer data by investing in analytics and define their

response to over-the-top players.

Wholesale carriers will continue to face declining revenues and margins as aresult of domestic regulation and intense competition.

Source : rcrwireless.com

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RECENT FINDOUTS 2



1. Mobile connections growth, which will slow to 7% in 2013. with emergingmarkets accounting for 89% of net additions.

2. Mobile broadband connections will grow by a more respectable 27% and

LTE connections will increase by 150%. Fiber connections will grow by 28%.

3. The LTE-to-HSPA rollout ratio will continue to shift in favor of LTE.

4. Wholesale carriers will continue to face declining revenues and margins asa result of domestic regulation and intense competition.

5. Operators will take a new approach to M2M, with more partnering to

deliver services

6. Ericsson will be the most successful traditional network infrastructure

vendor due to its mobile radio access network and core portfolio, as well

as its growing software and services offerings

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RECENT FINDOUTS 3



7. All vendors will have to deal with the encroachment of softwareproviders in core telecoms software stacks

8. Laser for 100G will be the largest growth segment in the components

sector in 2013

9. Companies that are integrating devices and services (such as Microsoft,

Apple and Samsung) will be in the strongest position to capitalize on

growth in the devices market.

10. Android OS and Samsung will pull further ahead in the platform and

device markets respectively in 2013.


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RECENT FINDOUTS --- Gartner and Ovum 4



11. The global telecom services market will continue to be the largest ITspending market in 2013 according to Gartner.

12. By 2016, Gartner forecasts that mobile data will represent 33% of the

total telecom services market, up from 22% in 2012 due to total

worldwide IT spending which is expected to reach $3.7 trillion (2.8

trillion) in 2013, a 4.2% increase from 2012 spending.13. Ovum Research believes that mobile broadband presents the largest

opportunity for operators to grow revenue, and is expected to grow

19.2 per cent annually, generating $122.9bn in incremental revenue

between 2013 and 2016.

14. Ovum recommended that vendors step up their focus in areas such

as converged packet optical, ROADMs, 40G/100G networking gear,

carrier Wi-Fi, and network-related services.

Source : telecoms.com

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RECENT FINDOUTS Pyramid Research 5



15. Pyramid Research expected that Emerging countries like Africa and theMiddle East, will be intensified by M&A activity in2013 as smaller

operators will find it increasingly hard to compete and raise funds

16. Data card and dongle revenue will overtake SMS revenue for the first

time in 2013, generating $7.6bn and contributing about 32 per cent oftotal mobile data sales

17. In Asia-Pacific, LTE subscription to reach nearly 42m, which whilst only 1

per cent of total subscriptions in the region, it is more than one-third of

global LTE subscriptions.


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18. Pyramid also predicts that Android phones will account for more than50 per cent of all Smartphone sales in Central & Eastern Europe and

close to half of all market sales in Western Europe in 2013.

19. In North America, the US is predicted to add nearly as many prepaid

customers as postpaid, and then overtake postpaid in 2014 due toslower economic growth in the US market.

20. In Latin America, the story shifts to DTH Pay-TV growth, with direct to

home services set to overtake traditional cable TV numbers by 2017.

However, legal restrictions will continue to hamper IPTV growth.

RECENT FINDOUTS Pyramid Research 6




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21. 2012 represented a milestone for the Brazilian mobile market. Mobiletelephony reached density of more than 130 lines per 100 inhabitants

and the country is likely to have, for the first time, annual growth in

excess of 10%

22. The migration of GSM handsets, which still represents more than 70%of mobile lines in the country, for 3G will also accelerate in 2013,

though 3G handsets are not likely to overtake GSM devices until 2015.

23. Virgin Mobile is set to begin its mobile virtual network operator service,

which could then entice others to enter the market and helping to

establish the MVNO market inside Brazil.

RECENT FINDOUTS Brazil Market (I) 7



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24. Fixed broadband will continue to grow at an annual rate of 20%. Pay-TV,which increased 27% in 2012, due to DTH, is likely to keep this growth

pace in 2013, with bigger growth expected of cable TV and IPTV.

25. Brazil presents a consolidated scenario of players in the telecom space

with three groups (Telefnica, Amrica Mvil and Oi) controlling 70% of

the total revenues for the sector

RECENT FINDOUTS Brazil Market (II) 8




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26. Despite the economic downturn, intense competition, and regulatoryactions, revenues for the European wholesale telecoms market

remained steady between 2010 and 2011 (Ovum)

27. Wholesalers must lessen their dependence on traditional wholesale

fixed voice sales by meeting customers needs for non-voice services

28. Mobile wholesale, a growing sector in Europe, offers significant

potential for growth based on an increasingly diverse customer base

29. Ovum found that a number of carriers, including Telecom Italia and

Frances SFR, did increase their revenues from other sectors to morethan compensate for declines in fixed voice

30. In 2011 Europes top four: BT, Deutsche Telekom, FT-Orange and

Telefonica, accounted for over 50 per cent of total European wholesale

revenue, with the top ten responsible for nearly 75 per cent of thetotal.

RECENT FINDOUTS Europe Market (I) 9



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30. In 2011 Europes top four: BT, Deutsche Telekom, FT-Orange andTelefonica, accounted for over 50 per cent of total European wholesale

revenue, with the top ten responsible for nearly 75 per cent of the total.

31. AT&T is mulling over buying a wireless operator in Europe by the end of

2013.

32. European regulations are stifling innovation within the telecom industry

and preventing its growth said Ben Verwaayen, CEO of Paris-based

telecom equipment maker Alcatel-Lucent

33. 28 regulators in Europe had created rules focused on lowering prices forcustomers, whereas in the U.S. And other regions regulators had also

focused on spurring innovation and new investments.

34. In 2011 Europes top four: BT, Deutsche Telekom, FT-Orange and

Telefonica, accounted for over 50 per cent of total European wholesalerevenue, with the top ten responsible for nearly 75 per cent of the total.

RECENT FINDOUTS Europe Market (II) 10



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34. Europe's top telecommunication companies are discussing the creation of

a pan-European infrastructure network to unite the region's disjointed

national markets

35. Putting together a pan-European network would end up with a huge

amount of logistical and financial difficulties but it would move Europe

more in line with the likes of the US and China.

36. Fitch Ratings, prophesizes that there is a slim chance for the talks to

succeed between European commission and Telecom operators . Fitch

believes network sharing within individual countries will remain a more

common method of cutting costs and defending margins.

RECENT FINDOUTS Europe Market (III) 11



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37. Russian Telecom market expected to grow 3.5% CAGR 2012 2015, mainly

driven by Mobile Data.

38. Mobile Data to Grow in Russia with 30% CAGR

RECENT FINDOUTS Russia (I) 12



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39. MTS a leading Russian mobile operator, and its main shareholder, AFK

Sistema continues to suffer losses. MTS effectively lost its asset in

Uzbekistan.

40. Also India a South Asian country, revoked all telecom licenses and

suggested that Sistema pay India 12 times the amount the Russian

company originally invested there in 2008.

41. Tenders for 800MHz / 2.5GHz frequencies to be used for LTE-based

telecommunications, orchestrated by Megafon, Vimpelcom, MTS and

Rostelecom.

RECENT FINDOUTS Russia (II) 13



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42. The telecom sector has recorded gross revenue at INR 52,937.32 crore

(roughly USD 98 billion) during the quarter ended September 2012, an

increase of 0.80% over the previous quarter at Rs 52,512.10 crore.

43. Adjusted gross revenue declined by 0.07% to Rs 35,473.16 crore during

the September quarter from Rs 35,499.01 crore reported during the

quarter ended June 2012.

44. The governments earning from the telecom sector in terms of license fee

also dipped 1.97% to Rs 2,884.16 crore during the July-September quarter,

as against Rs 2,941.02 crore earned during the April-June quarter this

fiscal year.

RECENT FINDOUTS India (I) 14



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45. However, operators gross revenue (excluding revenues of ILD, NLD and

ISPs, VSAT) declined by 0.61% during the quarter ended September 2012

to Rs 39661.37 crore.

46. The average revenue per user (ARPU) for GSM service dipped 0.45% to Rs

95.05 in July-September 2012 quarter from Rs 95.47 in April-June 2012

quarter. ARPU for CDMA service increased by 3.80% from Rs 74.91 inquarter ended June to Rs 77.76 during the quarter ended September

2012.

47. The tremors of official auditor CAG's last year estimation of Rs 1.76 Lakh

crore presumptive revenue loss to the government in the allocation of 2Gspectrum continued to be felt in 2012 with Supreme Court cancelling as

many as 122 telecom licenses in February.

RECENT FINDOUTS India (II) 15



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48. LTE Revenues In India To Reach $11.88Bn In 2017

49. LTE revenues in India, UAE and Saudi Arabia are set to reach $11.88

billion, $4.55 billion and $3.38 billion.

50. In last four years, the sector grew by 20% CAGR and the mobile subscriber

base crossed 900 million, second only to China

51. Telecom contributes approximately 3% to Indias GDP

52. The country is completely dependent on the instant voice and data

communication provided by the telecom networks; this dependency isirreversible.

RECENT FINDOUTS India (III) 16



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53. NTP (National Telecom Policy) plans to connect 250,000 Indian villages by

optical fiber network. This will translate into demand for an additional

400,000 base stations and 50,000 towers with average tenancy of 2.3 at

an investment of Rs.50,000 Crore. In effect, the NTP is visualizing doubling

the current telecom capacity and increasing its reach to 95+% of India

while providing broadband level of internet capability.

54. In FY 09-10, telecom attracted USD 2.5bn FDI (10% of total FDI); howeverin the last seven months, Indian telecom received a meager USD 48mn FDI

(0.32% of total FDI)

55. The tower infrastructure industry, which has fuelled Indian telecom

growth by investing over Rs. 100,000 Cr in the last 15 years.

56. Under the proposed unified licensing regime, additional license feesof 8% will be imposed and the FDI limit be reduced from 100% to 74%

RECENT FINDOUTS India (IV) 17



Source : thehindubusinessline.com

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57. The total IT investment in China's telecom industry was RMB 42.74 billion

in 2011, and the telecom industry IT solution market totaled RMB 13.71

billion. IDC forecasts the latter will climb to RMB 25.21 billion by 2016

58. 3G penetration rate in China was just 20.0% of the total mobile subscriber

base, which reflects significant growth opportunity

59. Mobile user base in China is ever increasing by November 2012, China

Mobile had 82.43 million 3G users, followed by China Unicom's 73.32million and China Telecom's 65.85 million.

60. Chinese MVNO market could be worth more than 70 billion RMB ($11

Billion) in 2015.

61. Chinese Telecom companies Huawei and ZTE focusing on building strong

credibility among industry stakeholders, outside China.62. Besides America, India, Australia, Canada and the U.K. have reservations

about doing business with the Chinese telecom equipment suppliers.

RECENT FINDOUTS China (I) 18



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63. Apple has 11 stores in China and Hong Kong. Revenues from China jumped

82.8% year over year to $22.79 billion in fiscal 2012.

64. Smartphone shipments in China hit a new record with the addition of

more than 60 million customers in the third quarter of 2012.

65. China will reclaim its lead as the world's largest Smartphones market in

2013 as the nation is expected to sell 240 million Smartphones. This would

represent one-third of global shipments, said analysis firm Canalys66. Total shipments hit 224 million in 2012 in China, making the country the

world's No 1 Smartphone manufacturer.

67. Other countries with big increases in smart phone usage expected in 2013,

include: Brazil +40 per cent, Russia +30.7 per cent, India +61.4 per cent

and Indonesia +51.7 per cent.

RECENT FINDOUTS China (II) 19



Source : Chinadaily.com.cn

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68. Telecom Services market in South Africa to grow at a CAGR of 1.91 percent

over the period 2011-2015.

69. Most countries in Sub-Saharan Africa (SSA) have mobile penetration rates

of less than 80%, but growth will still slow.

70. Among them Ugandas telecommunication sector will peak at US$1 billion

by 2017

71. By the end of 2012 Ugandas telecom sector had accrued US$858 million inservice revenue.

72. Mobile voice service revenue to decline from $613 million (USh1.45

trillion) in 2012 to $576 million (USh1.4 trillion) in 2017

73. Pyramid Research identified the main growth drivers in Uganda to be fixed

data services, with a CAGR of 23 percent, and mobile data with acompound annual growth rate (CAGR) of 27.1 percent, amounting to

accumulative revenue opportunity of $1.9 billion (USh4.7 billion)

between 2012 and 2017.

RECENT FINDOUTSMiddle East & Africa 20



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74. Saudi Arabia's telecom investment to reach SR37bn in 2013.

75. Saudi Arabia is by-far the largest telecom market in the GCC, accounting

for 66% of total mobile subscribers, 59% of total fixed-line connections and

58% of total internet users. Despite this only 38% of the country's

population are connected to the internet.

76. The latest CITC figures indicate that broadband penetration reached

almost 40% in the third-quarter of 2012 or 11.73 million users due to theexpanded use of smart phones and offerings of various data packages by

mobile operators. Fixed broadband subscriptions including DSL, fixed

wireless (WiMAX), FITx and other fixed lines have also grown during the

same period to around 2.25 million subscribers at a penetration rate of

36.5% of households Kingdom-wide.

RECENT FINDOUTSMiddle East & Africa 21



Source : citc.gov.sa

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77. Australian telecom market to reach $43 billion by this year.

78. Government decided to change its broadband infrastructure and plan to

launch supporting policies in e-commerce, e-health, e-education and smart

grid.

79. The $36 billion plan includes a government investment of $27 billion and

needs to be seen in the context of the $60 billion raised by the

privatization of Telstra (Telstra is Australias largest telecommunicationsprovider offering a full range of telecom services throughout Australia.)

80. NBN (National Broadband Network) will connect around 7% of all premises

in the country to fixed-wireless networks.

81. Australia has 5.5 million mobile broadband subscribers, the release of a 4G

network by one mobile network operator witnessed growth of morethan 300,000 subscribers in just over half a year.

RECENT FINDOUTSAustralia 22



Source : buddeblog.com.au

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KEY SUGGESTIONS FOR MARKET PLAYERS 23



Source : plunkettresearch.com

Enhanced your customer analytics

Focus on Customer experiencemanagement

Digital enablement

Strategic partner management

Yield management

Understand your assets and

managing them for optimal

value

Partner with others in

the broader digital space

Understanding the

relationship betweenonline marketing and

offline sales

Innovate products and

services that are

designed to attract

and retain customers.

Gather and analyze data

about customers and thenuse it to create right

product mix and services

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