Data is the next big revenue driver for Indian Telcos. This presentation provides the perspective on business, consumers, demographics, segmentation and broadband data.

1. Data Business: The India
Perspective
Rethinking the present in terms of
future
3rd October 2012

2. India: A country going Digital
• 121 million internet users
– 10% Population penetration
– 38% Y-o-Y growth
• 39 million 3G subscriptions
– 4% penetration
– 841% Y-o-Y growth
• Mobile Internet usage has surpassed
Desktop Internet usage in India
during April-May 2012
• 28% of travel gets booked online; 117
million transactions on IRCTC alone
• 47% of classifieds business is online
• 7% of bank users access their
accounts online
• 25% of the IT returns filed online in
2010-11
Source: Kliener, Perkins, Claufield, Byers D10 Conference
Internet world stats, Comscore

3. Data Revenues- Growth (Rs. Crores)
Potential
CAGR 33%
CAGR 50%
CAGR 41%
Source: CNBC TV18, Network 18 LIME4 report

4. India Telcos: Revenue Break Up – Voice &
Non-Voice
Pyramid Research – Ernst & Young Analysis F-Forecast

5. India: Internet Connections by type (in
Millions)
Even while Mobile Broadband takes a Lion’ s share, PC broadband doubles up in the next 3 years
Numbers represent the number of connections and not the number of Internet users
Source: TRAI – Telecom Industry quarterly performance reports. Avendus Estimates

6. The case for dongles
• 55 million PCs in India (2012)
– BCG expects number of PCs in India
to reach 216 million by 2015
– 4X increase expected in 4 years
• PC broadband to reach 15.6%
households by 2015
– 15 million broadband connections
– 10 million DSL connections
– 4 million CDMA dongles
• PC Broadband to be driven by
dongles and 4G broadband
• Dongles business to grow by
100% in next 3 years
Source: Avendus Estimates

7. Geographic distribution of users
While our Primary focus remains to be Metros,Tier A/B cities
Internet connections and data quantum growth is expected from Tier C and D towns
Source: IAMAI/ Cube Report 2011

8. The Potential in Rural Broadband
• Geographic distribution of users is traditionally skewed
toward Tier I/II cities
• Next 100 million users will be driven by Tier III/IV towns
– Already 30-40% of e-tailing industry sales is happening through Tier II/III
towns
• National Broadband plan 2010, envisages Internet in every
village by 2014
– USO to fund roll outs
– ITC e-choupal is building connectivity infrastructure across 40K villages across
10 states
– Nokia Lifetools, provides weather updates through SMS to 17 million
subscribers
– eFarm creates a mobile enabled supply chain connecting farmers to the
markets

9. Geographic distribution of users
• For penetrating Tier C and D towns, Telcos will need to rethink
last mile distribution issues.
• Associating with Rural bodies such as IFFCO, e-Choupal, Taluks
and agent system could be useful for making an entry at the
low tier geographies
– Would help keep the costs of entry down low
• Association with Commodity exchanges and other relevant
functional features which can be device bundled key to pick
up of the same.

10. The Potential in Rural Broadband
• Geographic distribution of users is traditionally skewed toward Tier I/II
cities
• Next 100 million users will be driven by Tier III/IV towns
– Already 30-40% of e-tailing industry sales is happening through Tier II/III towns
• National Broadband plan 2010, envisages Internet in every village by 2014
– USO to fund roll outs
– ITC e-choupal is building connectivity infrastructure across 40K villages across 10 states
– Nokia Lifetools, provides weather updates through SMS to 17 million subscribers
– eFarm creates a mobile enabled supply chain connecting farmers to the markets

11. Age distribution of Internet Users
Source- State of The Internet with focus on India (June 2011). Avendus estimates

12. Age distribution of Internet Users
• Current positioning of Internet services based on
teens and early twenties, new professionals is very
relevant for the current.
• But Telcos need to look at making the device and the
positioning relevant to the 25-54 age groups as well.
• Again the choice of devices and services that can be
customized and bundled will be important
differentiator.

13. Addressable market through FY 2017
Total Mobile subscriptions growing
at 10% CAGR
Internet Users growing at 39% CAGR
Dial-up expected to de-grow at 3%,
Wireline to grow at 14% CAGR
Wireless Internet will lead internet
growth
Dongles to hit 50 mn by FY’17
Mobile data to drive growth in
Internet
All Values in Millions
13
Census, TRAI, Pyramid Research

14. Consumer Segmentation – FY 2012
Values provided are the INR Crore values for the respective segments
Values in brackets reflect the % of subscribers in that segment Source: DARE consumer survey

15. Consumer segmentation – FY 2014
Values provided are the INR Crore values for the respective segments
Values in brackets reflect the % of subscribers in that segment Source: DARE consumer survey

16. Data Device market

17. http://ronnie05.wordpress.com