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Technology Research and Business Insight

Contents
Worldwide Telecommunication Market Update, Q4 - 2010 ........................................................................ 2
Key Findings and Recommendation.............................................................................................................. 2
Trends in Market ........................................................................................................................................... 2
Changes in Global Market ......................................................................................................................... 2
Enterprise Network and Communication ............................................................................................. 2
Carrier Network Infrastructure ............................................................................................................. 3
Mobile Devices ...................................................................................................................................... 3
Mobile Services ..................................................................................................................................... 3
Fixed Services ........................................................................................................................................ 3
Analysis ......................................................................................................................................................... 4
Global Telecom Market............................................................................................................................. 4
Services Market..................................................................................................................................... 4
Equipment Market ................................................................................................................................ 4
Leading Service Providers ..................................................................................................................... 6
Leading Telecom Supplier ..................................................................................................................... 6
Telecom Market Segmentation ............................................................................................................ 7

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Technology Research and Business Insight
Worldwide Telecommunication Market Update, Q4 - 2010

Key Findings and Recommendation


- Growth in mobile devices segment is intact with a Smartphone’s sales are driving the overall
telecom market. Over, 22% of the new mobile devices sold are Smartphone’s and open-
source based operating systems like Android has seen wide acceptance from OEMs and
users.
- Growth in enterprise network and communication is intact with pent up demand for
network infrastructure.
- The biggest growth trend is observed in data services and it is expected the mobile data
services will continue to be strong, with a 17% annual growth rate (CAGR ) by next five years
globally.
- Consumer fixed services will continue to see substantial decline in voice revenue.
Broadband access is still the growth engine, though pressures are coming to bear in
developed markets.
- Operators must continue to supplement their legacy access-based services with content-
driven (and increasingly video-enabled) services and applications.

Trends in Market

The telecom market continues to show some general trends: It has always taken a significant share of
total Information, Communication and Technology market and revenue realization from services are
predominantly high. The pressure from declining ARPUs, saturated penetration and competition has
signaled the need for successful service innovation by service provider. Without such innovation, and a
network strategy that can support it, services providers will be facing a very tough scenario in the
coming decade.

- Data Services and Mobile devices remain the only sector showing widespread significant growth
- One of the earlier methods of boosting growth through investment in emerging markets is no
longer lucrative as penetration increases, local competition and reducing ARPUs.

Changes in Global Market


Enterprise Network and Communication
- Growth in enterprise network and communication is intact with pent up demand for
network infrastructure.
- Enterprise Telecommunication and Services spending is intact. Spending in bandwidth,
Ethernet infrastructure and wireless lan is expected to surge.

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Carrier Network Infrastructure
- The expansion of carrier network infrastructure is mostly slow and the spending in network
infrastructure related to broadband, backhauls and mobility is cautious. Operators are little
concerned about the different choices of architectures (Metro, EoSDH, GPON etc) of and
taking and “wait and see” policy keeping convergence on Broadband, 3G/4G and Enterprise
Business.

Mobile Devices
- Growth in mobile devices segment is intact with a Smartphone’s sales are driving the overall
market. Over, 22% of the new mobile devices sold are Smartphone’s and open-source based
Operating systems like Android has seen wide acceptance from OEMs and users.

Mobile Services

- Mobile services are upward in revenues in Asia /Pacific and other emerging markets. India
and China have continued positive additions of subscribers.
- The biggest growth trend is observed in data services and it is expected the mobile data
services will continue to be strong, with a 17% annual growth rate (CAGR ) by next five years
globally.
- Mobile voice services will continue to erode from substitution, price pressure and
competition.

Fixed Services

- Consumer fixed services will continue to see substantial decline in voice revenue.
Broadband access is still the growth engine, though pressures are coming to bear in
developed markets.
- Enterprise fixed services will remain close to flat or slightly declining throughout due to price
competition.

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Analysis
Global Telecom Market

The mobile device revenues are expected to grow over 10% in next three years making it the biggest
telecom equipment segment. Telecom Services vs Equipment revenue contribution factor is 3:1 as
observed in FY 2010.

Revenue Growth in % YoY


2009 2010 2011 2012

13%
10.30%

10.10%
11.10% 3.90%
6.10% -1.30%
3.70% 0.70%
0.20% 3.80%
2.90% 4.20%
3.60% -0.20%

Enterprise Carrier Network Mobile Devices Mobile Services Fixed Devices


Networking and Infrastructure -1.20% -1.00%
-3.60%
Communications -5.00%

-18.40%

Source: Gartner, October 2010

Services Market
- Mobile services supplanted fixed services in 2007 as the larger market and proportion of
mobile to fixed connections worldwide will exceed 5:1.
- Mobile Services market is expected to show CAGR of 4.2 % to touch $1.0 Trillion reneuve
mark by 2012.

Equipment Market
- Telecom equipment market will recover from negative growth trend observed in 2009 . It is
expected to show a CAGR of 7% over next five years.

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- Mobile Devices and Enterprise Network Infrastructure will contribute the in the growth of
Telecom equipment revenues.
- Carrier network infrastructure revenues and growth will be moderate with expected CAGR
of 3% by 2014.

Telecom Market Revenues by Sector, worldwide, 2009 and 2014

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Leading Service Providers

S.NO Operator Name Revenues in 2008 (B USD) Revenues in 2009 ( B USD) Trends
1 AT&T 124 123

2 NTT 102 109

3 Verizon 97 107

4 Deutsche Telekom 90 90

5 Telefonica 84 74

6 France Telecom 78 71

7 China Mobile 59 66

8 Vodafone 73 61

9 Telecom Italia 44 37

10 KDDI 35 37

Leading Telecom Supplier

S.No. Vendor Telecom Revenue 2008 Telecom Revenue Trend


( B USD) 2009(B USD)
1 Nokia 70 56

2 Cisco 40 35

3 Samsung 25 27

4 Ericsson 30 23

5 Huawei 18 22

6 Motorola 28 21

7 Alcatel Lucent 24 19

8 RIM 10 14

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9 NEC 14 13

10 LG 13 12

Sony Ericsson 16 9

Telecom Market Segmentation

World Wide Telecom Market, Segment Wise (Millions of Dollars)

2,500,000
Mobile Devices — Retail Revenue
2,000,000
Mobile Services

1,500,000
Consumer Fixed Network Services

1,000,000 Enterprise Network Services

500,000 Telecom Operations Management


Systems
Carrier Network Infrastructure
0
2009 2010 2011 2012

Source : Gartner , October 2010

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