Alok Pratap Singh

Overview of Indian Telecom Market Rational for going 3G◦ VLR, Reducing ARPU, Stagnating Revenue◦ Mobile Internet and Data trend in Telecom

3G vs WIMAX vs 4G 3G Applications Overview of Delhi Telecom Market Research Methodology Data Analysis and Results Findings and Implications Limitations and Research Directions

HLR – Home Location Register : 687.71 MillionVLR – Visitor Location Register : 482.89 Million (70%)

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Cost control is the survival mantra in 2010

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3G:International Mobile telecommunications -2000 (IMT--2000), better known as 3G or 3rd Generation, is a generation of standards for mobile phones and mobile telecommunication. Compared to the older 2G and 2.5G standards, a 3G system must allow simultaneous use of speech and data services.

3G systems consist of the two main standards, CDMA2000 and W-CDMA, as well as other 3G variants such as NTT DoCoMo's Freedom of Mobile Multimedia Access (FOMA) and Time Division Synchronous Code Division Multiple Access (TD-SCDMA) used primarily in China.

WiMAX is an IP based, wireless broadband access technology that provides performance similar to Wi-Fi networks with the coverage and QOS (quality of service) of cellular networks. WiMAX is also an acronym meaning "Worldwide Interoperability for Microwave Access (WiMAX).

WiMAX is a wireless digital communications system, also known as IEEE 802.16, that is intended for wireless “metropolitan area networks". WiMAX can provide broadband wireless access (BWA) up to 30 miles (50 km) for fixed stations, and 3 - 10 miles (5 - 15 km) for mobile stations. In contrast, the WiFi wireless local area network standard is limited in most cases to only 100 - 300 feet.

HSDPA, short for High-Speed Downlink Packet Access, is a new protocol for mobile telephone data transmission. It is known as a 3.5G (G stands for generation) technology. Essentially, the standard will provide download speeds on a mobile phone equivalent to an ADSL (Asymmetric Digital Subscriber Line) line in a home, removing any limitations placed on the use of your phone by a slow connection. It is an evolution and improvement on W-CDMA, or Wideband Code Division Multiple Access, a 3G protocol. HSDPA improves the data transfer rate by a factor of at least five over W-CDMA. HSDPA can achieve theoretical data transmission speeds of 8-10 Mbps (megabits per second). Though any data can be transmitted, applications with high data demands such as video and streaming music are the focus of HSDPA

With Long Term Evolution (LTE) there is a new radio platform technology that will allow operators to achieve even higher peak throughputs than HSPA+ in higher spectrum bandwidth.

The overall objective for LTE is to provide an extremely high performance radio-access technology that offers full vehicular speed mobility and that can readily coexist with HSPA and earlier networks. Because of scalable bandwidth, operators will be able to easily migrate their networks and users from HSPA to LTE over time.

Mobile TV – a provider redirects a TV channel directly to the subscriber's phone where it can be watched.

Video on demand – a provider sends a movie to the subscriber's phone.

Video conferencing – subscribers can see as well as talk to each other.

Tele-medicine – a medical provider monitors or provides advice to the potentially isolated subscriber.

Location-based services – a provider sends localized weather or traffic conditions to the phone, or the phone allows the subscriber to find nearby businesses or friends.

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10000001200000140000016000001800000

No of

Subs

crib

erWireline Growth Delhi

Bharti

Reliance

Tata

MTNL

Assumption◦ 10% market share in the first year of all the Delhi market and thereof 40% growth

on YOY basis.◦ Per consumer ARPU is 300/- in first year and thereon reduces by 25/- YOY basis

till it reaches 200/- in 5th year. Than it stagnates on this level.◦ Conservative Network expenditure is 1500 crore for all the three operators,

therefore total expenditure by all three operators are 11.5 billion.◦ No interest charges

1st year revenue: 33,000,000 X 10% X 300/- = 990 million 2nd year revenue: 1.2 billion 3rd year revenue: 1.6 billion 4th year revenue : 2 billion 5th year revenue : 2.5 billion 6th year revenue : 3.5 billion To breakeven, minimum time period is 6 years, not considering the operating cost.

Abstract Purpose: A research was conducted to study the

consumer perception of various service provider and to explore common denominators uniting them to predict the early winner in Delhi market.

Design/methodology/approach – Data were collected by questionnaire from 55 Part Time MBA students of MDI (Lead Users) on Judgmental or purposive sampling.

Abstract Findings: Airtel is poised to grow among all the 3G

service provider, followed by Vodafone. The growth parameter will be Network, Service, Tariff and Speed.

Research Limitation/ Implication – More sample data coupled with Focus group and Qualitative research would have enhance the understanding of adaptability behavior of 3G services.

96% of the respondents are earning more than 35,000/- per month.

71% respondents are earning more than 50000/- per month.

81% respondents are spending more than 700/- on mobile.

60% respondents are spending more than 1000/- per month on mobile

• 87% of the respondents spends more than 500/- per month on Internet.• 63% of the respondents spends more than 750/- per month on Internet.• More than 80% of respondents are spending 1200/- and above on mobile and Internet connectivity.• More than 60% of respondents are spending 1750/- and above on mobile and Internet connectivity.

Statistics

Mobile Service

Provider

Choice for

Mobile Service

provider based

on Tariff (on

scale 1-5)

Choice for

Mobile Service

provider based

on Network (on

scale 1-5)

Choice for

Mobile Service

provider based

on Easy

availability of

retail outlet (on

scale 1-5)

Choice for

Mobile Service

provider based

on More Users

Friends &

Family (on scale

1-5)

Choice for

Mobile Service

provider based

on Service (on

scale 1-5)

Choice for

Mobile Service

provider based

on Others (on

scale 1-5)

N Valid 55 42 43 37 36 42 5

Missing 0 13 12 18 19 13 50

Mean 3.05 2.57 1.70 4.19 4.00 2.45 1.00

Median 1.00 3.00 1.00 4.00 4.00 2.00 1.00

Mode 1 3 1 5 5 2 1

Minimum 1 1 1 1 1 1 1

Maximum 7 5 4 5 5 5 1

AIRTEL

Reliance

MTNL

TATA

Mean Advertised Speed (2.85 ~3): 500 kbps-1Mbps

Mean Perceived Speed (3.48 ) : 3 Means - Neither good nor Bad&4 Means - Good

Mean Advertised Speed (3.43): 3 is 500 kbps-1 Mbps, while 4 is 1-2 Mbps

Mean Perceived Speed (3.14 ~3 ) : 3 Means - Neither good nor Bad

Total Airtel Internet User: 27

Problem Facing: 11 (41%)

Speed : 36%

Connectivity : 27%

Service : 27%

Tariff : 9%

Total Reliance Internet User: 7

Problem Facing: 4 (57%)

Speed : 25%

Connectivity : 50%

Service : 25%

Most important criterion for selection of mobile internet service provider is 1-Network, 2- Service, 3-Tariff , and 4- Speed

Speed and flawless connectivity would be the driver for data service provider.

Airtel is at a better pedestal than Vodafone, while Reliance is facing an uphill task.

Though this segment is the highest salary getter in India, and probably they would spend the maximum on this new technology, there would be less uses.

The trade off is between Number and Pricing. The most lucrative segment (Earning >35000/- per month) is expecting a price tag between 1001-1200/- and up to 1500/- on unlimited data. Currently only BSNL pricing is near to it (1359/-). Tata Docomo is offering 15 GB data @2001/- , while Reliance 21 GB @2100/-.

Except Airtel, Vodafone, all the above company perception on tariff is aggressive, while their customer care perception is not encouraging.

At present, private players are proclaiming a speed of 21 Mbps while BSNL is offering speed of 7.2 Mbps, we have seen in our survey, customer would be grieved a lot if the promise isn’t fulfilled.

Sample data is limited. Further survey of different segments are required to

understand customer psyche. One such survey can be done on PGPM of MDI, DPS school or Modern school.

Based on the finding, focus group study can be conducted to reach a final conclusion.