This gives a holistic view of the way the Indian internet broadband industry has grown over the years

1. India’s Internet Broadband Industry
Analysis
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2. Agenda
1. Industry Understanding
2. Key Players
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3. 1. Industry Understanding
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4. • The Indian internet wireless broadband industry - one industry
that is definitely worth a watch. More like a James Bond pot-boiler (or
Agent Vinod, in the Indian parlance?), this industry seems to have all the
twists and turns to make the audience be at the edge of their seats. A’la
the Home Alone series, this was the one child of the Telecom family that
was terribly forgotten in the great Indian Telecom growth story. While the
entire world watched the India Telecom industry bursting to its seams in
terms of the lowest call costs in the world markets, exponential increase in
customer base etc., images of farmers and sadhus boasting their cell-
phones doing the rounds, the internet broadband market was the one
playing a sideshow besides this entire extravaganza.
• “Modest” might be a modestly correct word that might be used to describe
the growth of the internet broadband industry in India.
February, 2011
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5. Internet usage trends vis-à-vis wireless users
Internet subscriber base (in million) Wireless subscriber base (in million)
 Despite the fact that India adds 8-10 million
cellular connections each month, the rate of
growth for the internet services in India has
been modest
 While the internet subscribers base has been
growing at 25% from 2004 to 2007, the actual
consumption of bandwidth has been a poor 87
Gbps
 Sluggish broadband growth for both retail and
small enterprises
February, 2011
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Broadband subscriber base (in million) Source: TRAI

6. • The alarming thing to note is the sluggish growth of the internet
consumption for the enterprise and retail segment. Applications of
broadband in the fields of telemedicine, healthcare, video-on-demand are
unheard of in India and even the localised online content ( a sound
judging parameter) is negligible. All this might be the results of a legacy of
permit policy and apathy of successive governments in the access of
international bandwidth at the submarine landing points
February, 2011
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7. Key insights on the sluggish growth of
Indian internet services market
 The pricing structure of broadband in India is arguably one of the highest in the world, making it an
elite or luxury item, denying the common man the right to information
 The cost of bandwidth in India is high primarily due to the near monopolistic policies over the past
decade exhibited at landing points of submarine links
 The usage based pricing model deters the retail users from using the latest internet multimedia
services like VOIP , video sharing, streaming etc.
 Poor quality of service (QoS) leading to a weak demand for internet related services accounts for
one of the main reasons of the sluggish growth of broadband in India
Country Price/MBPS Country Price/MBPS
(USD) (USD)
South 034 China 23.18
Korea
Sweden 0.65 Thailand 30.36
Germany 5.33 Sri Lanka 40.90
United 11.31 Slovakia 51.48
Kingdom
Poland 13.33 India* 88.61 February, 2011
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Source: White Paper “On the state and guiding principles of broadband in India, Ashwin Gumaste

8. • The internet broadband story started with the launch of the internet
services by the Indian government in August of 1995. One Mr. Singh and
Mr. Rao opened the gates to private operators via a liberal licensing
regime in the November of 1998. The internet service in India was
formally anointed with the launch of the Broadband Policy in 2004 which
described Broadband as “an “always on” data connection that is able to
support interactive service including Internet access and has the
capability of the minimum download speed of 256 Kbps to an individual
subscriber from the Point of Presence (POP) of the service provider”. As
on March 2010 there were 16.18 million internet subscribers. Besides the
numbers mentioned before, there are 117.87 million wireless data
subscribers who are accessing the internet through wireless (CDMA and
GSM) networks (TRAI)
• Though this child had long been forgotten with disastrous results, not for
long, the focus seems to be back on this area. The big boys of the industry
viz. the CII, Dept. Of IT and Dept. of telecom & IT have now formulated a
utopian vision for the broadband industry as summarized below.
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9. Indian Internet Broadband Industry: An overview
As per the Broadband Policy 2004,Broadband is defined as an “always on” data connection that is able
to support interactive service including Internet access and has the capability of the minimum
download speed of 256 Kbps to an individual subscriber from the Point of Presence (POP) of the
service provider
Opening of access
Market opened for network to wireless
Launch of private operators access technologies
internet services Broadband policy
via a liberal (3G, Wimax)
( August 1995) launched (2004)
licensing regime
(November 1998) BWA auction
(January, 2010)
 There were 16.18 million Internet subscribers on 31st March 2010 as compared to 13.54 million on 31st
March 2009*
 Besides the internet subscribers mentioned above, there are 117.87 million wireless data subscribers who
are accessing internet through wireless (GSM and CDMA) networks *
 The number of Broadband connections on 31st March 2010 was 8.77 million compared to 6.22 million as on
31st March 2009 *
 The focus is on sustenance of fixed networks & TRAI has proposed support to the tune of Rs. 2000 crores
every year for three years. Broadband connections on copper has increased from 5.36 mn. in March 2009 to
7.6 mn. in March 2010 (41.7% of overall increase) *
February, 2011
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10. India’s Broadband vision
“ Drive ubiquitous broadband for every Indian, accelerating India’s economic development and
improvement in quality of life ; in the process of making India one of the top five broadband countries
in the World by 2010” – CII and DOIT & DOTMCIT,GOI
Targets
 10million subscribers by 2010 and 35 million subscribers by 2020 in urban India across homes,
enterprises and public kiosks
 Broadband coverage for at least 50% of the rural population by 2010 and 100% by 2020 through rural
broadband kiosks
 Appropriate and locally relevant e-education, e-health, e-governance, entertainment and e-commerce
to be made available via broadband connectivity to all cities, towns and villages in India
Projected Investments Demand Targets for Urban Market
February, 2011
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Source: CII and DOIT & DOTMCIT,GOI

11. Broadband technology options for urban market
Parameters Technology Options
xDSL on Copper HFC-Cable Fiber- Ethernet Wireless Satellite
Bandwidth Downstream- From In principle same Practically no limits Wide range possible High bandwidth
possible – 1.5 Mbps to 12 Mbps as DSL – Japan and Korea based on technology possible for
Downstream/U Upstream - From 256 QoS in cable plan up to 40 Mbps option downstream. Very
pstream Kbps (on ADSL) to architecture may to home on fiber Wi-Fi used for limited use of two
12Mbps (on SHDSL) be an issue. During systems typically 200+ kbps way transmission in
upstream connectivity . With satellite systems
symmetric high WiMAX/MMDS, up to
bandwidth could be 10 Mbps connectivity
costly is possible
Leverage on Leverages existing Leverage existing Fresh access While it is possible Reusable satellite
existing twisted pair reducing Digital TV class networks will be that wireless solutions systems and
infrastructure incremental costs HFC systems required in most can draw on the communication
reducing places . However existing hard spectrum for
incremental costs over time , when infrastructure used in satellites. New CPE
prices decline, fiber mobile phone, the would be required
might be used to technology
replace the existing infrastructure
copper cables spectrum
requirements and
even OSS/BSS would
totally be new
Maturity of Fairly stable – over 355 of the global Prima facie mature Some technologies are 2 way satellite is
solution 60% of the global broadband and established . mature but no not yet mature
broadband services subscriber based on However compared standards exist
are on DSL cable – fairly stable to DSL /Cable , has a (LMDS/MMDS)
and mature low installed base Standards evolving (
solution Wi-Fi, WiMAX) likely to
mature in future February, 2011
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Source: CII and DOIT & DOTMCIT,GOI

12. Broadband technology options (contd.)
Parameters Technology Options
xDSL on Copper HFC-Cable Fiber- Ethernet Wireless Satellite
Long term No long term Might be replaced by Fully optical Depends primarily on Less likely as high
prospects prospects due to FTTH as fiber costs systems will remain spectrum availability costs involved
imminent fiber go down over time the “key” wired & costs but will have
replacement networks place for mobile usage
Global Exists Exists Exists Standards evolving Not clear
Standards
Equipment Relatively low Cable costs are the Fiber costs are Right now costlier Costs high
Costs lowest in absolute coming down than DSL/Cable/Fiber
terms
Capability of Major players will be Fragmented industry, Only strong players Mostly strong players – Solution providers
players likely to strong not savvy on as commitments wireless voice the likely players
take up this technology or required serious telephony players,
technology professional ISP’s
Key Insights from the analysis
 Wireless broadband connectivity services are likely to be used in rural networks where density of
usage is much lower or for hotspots kind of niche locations
 Unlikely that true broadband connectivity to home on wireless would be rolled out on a city-wide
basis in a major way in the next 2-3 years
February, 2011
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Source: CII and DOIT & DOTMCIT,GOI

13. • Now we know that there is actually a vision. If so then what is going on
the ground for achieving this grand vision. As true to our nature as pot is
to soot, there surely lots happening; in terms of spectrum scams (2G) and
hence a huge ensuing hullabaloo that has somehow helped the attention
right back to where it should ideally have been from the beginning.
• Finally the long awaited opening of access network to wireless access
technologies happened via the Broadband wireless auction (BWA)
conducted in the month of January 2010 and hence a new era of high
speed data accessibility was introduced to the Indians. Auction happened
for the 22 circles and went to different players while Reliance Infotel
emerged as the singled Pan India licensee to this access.
• This auction holds huge potential in terms of possible future growth and is
all set to spawn an entire ecosystem of services associated with a typical
high broadband connection. More so, due to pathetic state of internet
broadband penetration (fibre/wireline networks) in India, adding to ease
of reaching an end user without a wire.
February, 2011
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14. Growth prospects of the wireless broadband market
Growth drivers: Consumer
base & enterprise
penetration
Consumer centric Potential to grow at
wireless devices will CAGR 74% & comprise
lead to increase in of 86% BB user base by
market penetration 2015
Share of non-voice
revenues to reach 30% of
operator revenues by 2015
February, 2011
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Source: Analysys Mason, TRAI

15. Growth in the service delivery ecosystem
(wireless broadband)
• Telecom operators and ISPs have made total investment of ~ INR 1,000 bn (USD 23 bn) for 3G and BWA
Service spectrum, and are entering into ecosystem partnerships for delivery of data-intensive services
Providers
• Device vendors are launching mass market access devices such as INR 7,000 (USD 150) smart-phones and INR
Device 14,000 (USD 300) net books, and partnering with operators to bundle video capable handsets
OEMs
• Technology vendors, both Indian and global, are developing platforms such as SDPs for integrated and seamless
Delivery & multi-screen experience, ODPs for easy discovery and activation, and enabling platforms (such as advertising,
Enabling elevance, content management and commerce) for enhanced experience and ease of use
Platform
Providers
• Data-focused as well as mass market product and application platforms offering services such as mobile /
Product broadband TV, online gaming and rural VAS are being developed by various local vendors
/Application
Providers
• Content providers are aggregating and developing both popular entertainment content such as music / videos,
Content and mass market content such as utility applications and educational content, customized for the small screen
Aggregators
/Developers
February, 2011
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Source: Analysys Mason, TRAI

16. Scope of WiMAX in India
Low
penetration in
India can be emerging
world’s lowest markets like
end to end cost India provide
for WiMAX tremendous
India predicted growth
to have 27 mn. service market
opportunities
users by 2012 ( for WiMAX
20% of world
India slated to WiMAX market)
become largest
WiMAX market in
Asia Pacific by 2013
(projected annual
growth of 130%)
February, 2011
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17. The future of wireless broadband: Wimax or LTE?
• Reliance Infotel , the • Samsung demonstrates
sole pan India license Wimax 2 as counter to
holder for 2.3GHz LTE
spectrum opts for LTE • Wimax is a stable
• Aircel goes for LTE with technology with cheap
Nokia-Siemens equipment , adoption by
• Qualcomm supports players while LTE is a
LTE by supporting 3G new technology and will
India Forum take a few years to
• LTE is touted as the so stabilize
called future of wireless
broadband offering more
bandwidth in same
spectrum
February, 2011
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Source: WiMAX Forum

18. 2. Key Players
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19. BWA Auction, 2010
Telecom Circle Successful Operator Winning Price ( Rs. crore)
Delhi Infotel and Qualcomm 2,241.02
Mumbai Infotel and Qualcomm 2,292.95
Maharashtra- Goa Bharti Airtel and Infotel 915.64
Gujarat Infotel and Tikona 613.85
Andhra Pradesh Aircel and Infotel 1,059.12
Karnataka Infotel and Bharti Airtel 1,543.25
Tamil Nadu Infotel and Aircel 2,069.45
Kolkata Infotel and Bharti Airtel 523.20
Kerala Infotel and Qualcomm 258.67
Punjab Bhari Airtel and Infotel 332.27
Haryana Infotel and Qualcomm 119.90
UP East Tikona and Infotel 142.50
UP West Tikona and Infotel 183.87
Rajasthan Tikona and Infotel 97.32
Madhya Augere and Infotel 124.66
Pradesh
West Bengal Infotel and Aircel 70.97
Himachal Pradesh Tikona and Infotel 20.66
Bihar Infotel and Aircel 99.28
Orissa Aircel and Infotel 63.63
Assam Aircel and Infotel 33.02
North East Infotel and Aircel 21.27
Jammu and Kashmir Aircel and Infotel 21.27
February, 2011
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20. Internet Subscriber Base & Market
Share of ISP’s
ISP Service Area Subscriber base Share (%)
Bharat Sanchar Nigam Ltd. All India 10172299 56.84
Mahanagar Telephone Nigam Ltd. Delhi & 2362245 13.20
Mumbai
Reliance Communications All India 1829707 10.22
Infrastructure Ltd.
Bharti Airtel Ltd. All India 1381921 7.72
Hathway Cable & Datacom All India 333717 1.87
Pvt. Ltd.
You Broadband & Cable All India 251702 1.41
India Private Limited
Tata Communications All India 231610 1.29
Internet Services Limited
Tikona Digital Networks Pvt All India 174950 0.98
Ltd
Sify Technologies Ltd.* All India 162808 0.91
Data Infosys Ltd. All India 104586 0.59
February, 2011
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Source: TRAI

21. Growth achieved by the top 10 ISP’s in
the last Quarter
February, 2011
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22. Consumer feedback on existing BB
providers in Madhya Pradesh (TRAI)
 Most of the broadband users are not happy with the maintainability of the broadband service being
provided to them and a significant number of the customers stated their dissatisfaction with the
broadband connection and modem provided by the service provider
 Service providers should improve their processes for resolution of billing complaints
 Network performance will play a critical role in acquiring broadband market share in the future with
high uptimes and higher speeds to customers
February, 2011
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23. Possible growth areas
Assessing
LTE for
future growth
perspective
Value Added
Service s
Tie-ups with Tie-ups for
Mobile
financial orgs. online Online Enterprise Tech-enabled
handsets for Utilities in
for online healthcare education mobility government
increasing BB vernacular
transaction services to facility applications services
penetration
utilities remote areas
Last Mile Content
Infrastructure
development
Improvement
in QoS
February, 2011
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