INDUSTRY WATCH Telecom Sector & 3G VAS

By: Karamjeet Kaur

Current Scenario in Telecom Industry

India is 4th largest market in Asia after China, Japan and South Korea. The telecom industry is one of the fastest growing industries in India. India has nearly 200 million telephone lines making it the third largest network in the world after China and USA. With a growth rate of 45%, Indian telecom industry has the highest growth rate in the world.

Contribution of telecom sector in terms of revenue is 2.1 % of GDP as compared to 2.8% in developed economies.

CLASSIFICATION OF TELECOM SECTOR

Fixed line telephony
BSNL and MTNL account for 90% revenue for basic services.

Mobile Telephony Internet

25 private companies providing cellular services in 19 telecom circles and 4 metro cities, covering 1500 towns across the country. There is no restriction on the number of internet companies and more than 185 companies are operational.

Telecom equipments
Growth in the telecom equipment market resulted in increasing demand for telecom services.

Private sector available in 18 circles and collectively account for 10% of revenue.

Presently, there are five private service operators in each area, and an state operator

Growing demand of corporate for applications such as electronic commerce, Internet leased lines, ISDN, VPN etc is driving the growth of the internet services market.

Key players like BSNL, BHARTI, RELIENCE, TATA, BPL and HUTCHISON will drive equipment market growth.

 BSNL is the largest telecom company in India. BSNL and MTNL leads in the landline services while Bharati Airtel is the most important player in the cellular services. Companies such as Reliance, Airtel, Tata and Idea are offering several schemes to attract consumers. Some of the schemes are call rates being Re.1 per second, making calls on the same network has become free or very nominal rate is charged. Their ads are also very innovative and creative. Who can forget the Vodafones Zoozoo ads or Ideas social message ads endorsed by Abhishek Bachchan? Mobile companies are also providing best offers on musical ring tones downloading wallpapers etc.

Market Share

Major Players

Airtel
Sunil Bharti Mittal founded the Bharti Group. In 1983, Sunil Mittal was into an agreement with Germany's Siemens to manufacture the company's push-button telephone models for the Indian market. In 2009, Airtel launched its first international mobile network in Sri Lanka. In 2010, Airtel began operating in Bangladesh and 16 African countries. Today, Airtel is the largest cellular service provider in India and fifth largest in the world.[

 Airtel owns 70 % of Warid Telecom in Bangladesh through a joint venture. Bharti Airtel Limited will take management control of the company and its board, and will relaunch the company's services under its own Airtel brand. On 14, February 2010 a statement issued by Zain Ghana issued a resolution to accept a proposal received from Bharti Airtel Limited (Bharti) to enter into exclusive discussions until 25 March 2010, regarding the sale of its African unit, Zain Africa BV. The offer was for $10.7 billion. The deal would provide Bharti access to 15 more countries in the region, adding around 40.1 million subscribers to its already 125 million-plus user base. The combined revenue of the two entities would be around $12 billion.

 Market leader in India with a market share of 30.07% (as of May 2010). It is 6th most valued brand according to an annual survey conducted by Brand Finance and The Economic Times in 2010. Tie-up between Bharti Tele-Ventures Limited and Research In Motion (RIM) and Apple for Apple iPhone 3Gand Apple iPhone 3GS

Vodafone
Vodafone Group plc is a global telecommunications company headquartered in Newbury, United Kingdom. It is the world's largest mobile telecommunications company measured by revenues and the world's second-largest measured by subscribers (behind China Mobile) It operates networks in over 30 countries and has partner networks in over 40 additional countries. It owns 45% of Verizon Wireless, the largest mobile telecommunications company in the United States measured by subscribers.

 On 28 October 2005, the Company announced the acquisition of a 10 per cent stake in India's Bharti Tele ventures, which operates the largest mobile phone network in India under the brand name AirTel. Then on 11 February 2007, the Company agreed to acquire a controlling interest of 67% in Hutchison Essar Limited for US$11.1 billion. At the same time, it agreed to sell back 5.6% of its AirTel stake back to the Mittals. Vodafone would retain a 4.4% stake in AirTel. On 21 September 2007, Hutch was rebranded to Vodafone in India.

Idea cellular
Idea Cellular, usually referred to as !dea, is a wireless telephony company operating in all the 22 telecom circles in India based in Mumbai. It is the 3rd largest GSM company in India behind Airtel and Vodafone and ahead of state run player BSNL. In 2000, Tata Cellular was a company providing mobile services in AP. When Birla-AT&T brought Maharashtra and Gujarat to the table, the merger of these two entities was a reality. Thus Birla-Tata-AT&T, popularly known as Batata, was born and was later branded as !dea.

In June 2008, Idea Cellular bought out BK Modis stake in Spice Communications for Rs 2,700 crore adding Punjab and Karnataka circles. Modis joint venture partner, Telekom Malaysia, invested Rs 7,000 crore for a 14.99% stake in Idea.

3G- Introduction
International Mobile Telecommunications-2000 (IMT-2000), better known as 3G or 3rd Generation, is a family of standards for mobile telecommunications fulfilling specifications by the International Telecommunication Union, which includes UMTS, and CDMA2000 as well as the non-mobile wireless standards DECT and WIMAX.

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DATA RATES
IMT-2000 provides higher transmission rates: a minimum data rate of 2 Mbit/s for stationary or walking users, and 384 kbit/s in a moving vehicle, the ITU does not actually clearly specify minimum or average rates or what modes of the interfaces qualify as 3G, so various rates are sold as 3G intended to meet customers expectations of broadband data. Capability for high-speed wireless data transfers, almost 40 times the speed of existing digital networks

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3G Technology features
1. Duplex: Allows simultaneous two-way data transfers.

2. TIME DIVISION DUPLEX In this approach, the uplink and the downlink operate on the same frequency, but they are switched very rapidly: one moment the channel is sending the uplink signal, the next moment the channel is sending the downlink signal.

3. Flexibility capable of supporting a wide range of services and applications.

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Why 3G ????
Customer benefits
Higher bandwidth enables a range of new & exciting applications Newer ways to personalize mobile communications Most 3G phones have video calling

No Software installation or configuration

Utility and ease of use Engaging Primarily visual

Building on the popularity of TV

Interactive

Immediacy and fast response

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Our Offerings on the 3G platform

Products

IVVR (attractive voice & video call)

IVVR systems add a new dimension to the IVR paradigm by giving IVR systems the ability to use dynamic or static video information for caller assistance. IVVR systems do not require the installation of special software on the mobile phone As the number of video-equipped consumer increases, the demand for video-enabled services will also increase. Providers offering videophone services on 3G, UMT networks will also need IVVR.

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Caller Benefits The IVVR experience is faster and more interesting. Visual agent interaction is more engaging and enhances trust.

Call Center Benefits Reduced costs through increased self service Improved communication a picture is worth 1000 words Higher customer perception of the level of service Stronger customer bond
Mobile Service Provider Benefits Increased air time Expanded appeal of video-capable networks

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Video mail
A must have service in a 3G network Natural progression from Voicemail Ability to see the menus even when the messages are being played enabling an overview, ease of use and speed for the users
Steps User calls The receiver is unable to take the call Unanswered call is forwarded to the Video Mail service Caller sees the subscriber's prerecorded video message/greeting Caller records his own message for the receiver Receiver sees the messages left by callers on his Video mailbox when he uses it the next time GLOBAL BUSINESS SCHOOL AMITY

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IVP (INTERACTIVE VIDEO PROMOTION )

Video Advertising Introducing video advertising into video based services can provide advertising funded services to consumers and/or subscribers. Any real time video stream or prerecorded video can incorporate advertisements. Advertising video can be inserted prior and post any video content A pool of advertisements can be automatically inserted and rotated between views to allow for maximizing advertisement revenues.

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Video Gaming
Integrated with the Altruist Media Platform Deliver instant, anywhere anytime interactive gaming. From basic single player games to multiparty competitions anything is possible. Provide innovative services to consumers allowing the viewing of real time sports and racing broadcasts directly to their 3G Video mobile.

Single/Multi-player Video Games

Compliant with any 3G Compatible handset (ability to take video calls)

Phone camera not needed Real time gaming live opponent

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Video CRBT

Natural progression from Voice-based CRBT Instead of just the audio, the caller will get to see the video of the Ring Back Tone set by the user

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Video Conferencing
Live Video Chat Forums Chance to have a face to face discussion Choose a topic that concerns you

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FUTURE OF 3G MVAS
Introduction of NGN would enhance the quality of services in the MVAS market in India. The users would be able to access more feature rich services. Number portability would in turn will be profitable to the MVAS market in India. Opportunity to develop innovative services to meet market demands and to increase average revenue (ARPU) from the subscribers

Gives operators the flexibility to market multiple services to their subscribers with premium rates for the video-based application Provides operators an avenue to move 2G users to 3G services, opening up the more lucrative revenue source provided by 3G premium services Service providers can be MVNOs as already existent in many European nations and U.S

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Thank you

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