drivers of telecom in india
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Drivers of Telecom in India. Ashok Jhunjhunwala, TeNeT Group, IIT Madras, [email protected] Pan-IIT Conference - March 03. India’s Imperatives. India has 1000 million people 180 million households - PowerPoint PPT PresentationTRANSCRIPT
Drivers of Telecom in India
Ashok Jhunjhunwala, TeNeT Group, IIT Madras,
Pan-IIT Conference - March 03
India’s Imperatives
India has 1000 million people– 180 million households– 40 million fixed line telephones,
12 million mobile and four millionInternet connections
Upbeat Mood as Indian Telecom Poised for Growth
– 100 million lines by 2005– 200 million lines by 2010
Customers Start to benefit– long distance cost tumbles from
Rs 30 to Rs 5 per minute
Primary Bottleneck
Affordability– Telephone infrastructure cost (Capex) about Rs30K per line a
few years back Finance Charge : 15% Depreciation : 12% Operation and Maintenance : 13% License fees, WPC charges, service tax: 10% 50 % of Rs 30,000 required as yearly revenue to break even
– revenue of Rs 1200 per month
What percentage of Indian Households can afford this?
Urban Household Affordability Vs Monthly Telecom Spend*
36
22
11
6
31 2%
5%
10%
19%
61%
38%
0
5
10
15
20
25
30
35
40
220 330 440 630 940 1560
Monthly Telecom Spend (in Rs)
HH
s I
n
Mil
lio
ns
0%
10%
20%
30%
40%
50%
60%
70%
HH
s I
n %
Affordable HHs (In mn)
Affordable HHs ( In %)
* For year 2002-03 at 25% unreported income & 3% income spend on telecom
1.40.5
3.0
6
15
31
0%1%2%
5%
24%
11%
0
5
10
15
20
25
30
35
130 190 260 360 550 910
Monthly Telecom Spend (in Rs)
HH
s In
M
illi
on
s
0%
5%
10%
15%
20%
25%
HH
s In
%
Affordable HHs (In mn)
Affordable HHs ( In %)
Rural Household Affordability VsMonthly Telecom Spend*
* For year 2002-03 at 25% unreported income & 1.75 % income spend on telecom
India Requires
Telecom Infrastructure at a Capital Expenditure (CAPEX) of under Rs 10,000 per line
– Not a problem of the West, as affordability there is much higher– a task of scientists of Developing Countries
In doing so and serving the large potential market of India and other Developing Countries
– we can be amongst the world leaders in telecom technology
CAPEX cost has fallen to about Rs 16000 per line– can get to Rs 10,000 per line in a few years
Telecom Network Technology
Contribution to CAPEX from Network Elements for emerging market
– Backbone Network (contributes to 10% of CAPEX)– Fibre, WDM Networks, SDH Networks
– Backbone Switches and Routers (contr. 5-10% of CAPEX)
– Access Network (contributes to 60 to 65% of CAPEX)– Mobile, Fixed Wireless and Fibre Access
– Service Platforms (contributes to 10 to 15% of CAPEX)– OMC, Customer Care & Billing, NMS, IN Services and ISP platforms
India has a fibre 10 km from almost any village in 85% area
Backbone Network
BSNL has fibre going to most taluka (county) headquarters
Reliance, Bharati and Tata laying fibre feverishly
Technology– WDM Network
mostly obtained from Lucent, Alcatel, Nortel, Sycamore etc.
– SDH Network Hwawei, UTStarcom, ZTE,
Tejas Network dominate Chinese and Indian
cost-effective technologies
Access Network
Contributes to 60 to 65 % of per line CAPEX
– Mobile Cellular : GSM/GPRS and IS-95/3G-1X costs have significantly come down : rapid expansion likely technologies dominated by Ericcson, Nokia, Siemens, Lucent,
Qualcom etc.– Korean companies enter via IS-95/3G-1X
– Fixed Wireless : providing fixed telephone and Internet to homes and offices
– Fibre Access Network : dominate urban centers
Fixed Wireless: dominated by corDECT WiLL
To PSTN
To Internet
35 kbps Internet(premium rate of 70 kbps) plus simultaneous telephone
at Rs 8K per line
Fibre Access Network
.
Emerging as best option to connect dense urban areas– For Residential Areas
Fibre to the street corner with POTS, DSL or Ethernet on Copper for 500 m combined with 802.11 wireless tomorrow may replace coaxial based cable
TV tomorrow
– For Commercial Areas Fibre to the Building with Ethernet in Building
– Technologies dominated by Indian and Chinese companies Huawei, ZTE, UTStarcom, Midas
Rural Opportunity
India has 600,000+ villages– 650 million people, Rs 600,000 Crores Rural annual GDP
Can we double the Rural GDP in the next ten years….
Connecting Rural India
– BSNL’s Contribution: on the average one fibre connected rural
exchange for every 150 sq km a wireless system with 10 km range at existing fibre
connected exchange would cover 80 - 85% of villages in India
– India need a communications company which would focus and operate only in Rural Areas
looks at rural areas as large potential business and provides wireless Internet connectivity in villages
thinks and acts rural
N-Logue : A Rural Service Provider– aggregate demand into a kiosk using
corDECT Wireless in Local Loop ISP in a box : Minnow Reliable power back-up
– Rs 50,000 (including taxes) per Kiosk providing telephone, Internet, multimedia PC with web-camera, printer and 4 hour power back-up for PC
plus Indian language software
– set up by a village entrepreneur on the line of STD PCOs needs Rs 3000 per month to break even
Innovative Technologies& Business Models
n-Logue Deployment Strategy
Scope:•1 –3 Talukas•25 Km radius, 2000 sq
km•4 – 5 lakh population•2 - 5 towns•300 -400 villages
Connections:•Individuals•Government
— schools and PHCs
• Kiosks
LSP
Rs. 50,000 / Kiosk
ACCESS CENTRE
KIOSK OPERATOR
Application & Content
Providers
Telephone Backbone
Internet Backbone
Banks
BanksMicro Finance Organisations
500 + Connections (at least 1 in each village)
What is the monthly income?
STD PCO Rs 500+ Children learn typing
– all kinds of on-line and off-line education Rs 500+
Kiosk is a photography shop Rs 300– also a video parlour on weekend evenings Rs 300
email and browsing– voice mail and video mail Rs 500+
e-governance access– connect to taluka Government office for services Rs 200
and much more
Word-processor in Indian Languages
Multi-lingual Office PackageIITM -
Chennai Kavigal
Mailclient in Tamil
Mundi . . . .
A 60 year old from a village near Melur
– Palaniamma had lost vision in both eyes since 2 years
– through the Aravind process Doctors confirmed that vision can be restored in at least one eye
IITM trying to develop Remote Diagnostic tools
– Blood Pressure, Sugar & Iron, ECG Monitor, stethescope
– at total cost of Rs 10,000
Crop Consultancy
Top: Ladies Finger Diseased with yellow mosaic
Below : Post treatment
Saving of Rs 140,000 for the farmers
Cost of information Rs 20
Can Kiosks become Micro-banks?
TeNeT and n-Logue working with ICICI– Remote Bill Payment– Rural ATM– Micro-finance– Remittance– better credit assessment
Credit and Product Marketing is one of the biggest requirement of Rural India
Do we have a model for sparser areas?
Fibre not available in 15% of areas Only about 50 to 100 villages in 20 Km radius
– less population per village– less available money
Technology Intervention
Business Intervention– finance and buying/selling may make even larger sense
• 8-10 voice channels + 64/128 kbps Internet satellite backhaul
• Each hub supports 16 to 20 remote sites with 2 Mbps downlaod
• Rs 10,000 corDECT + Rs 10,000 backhaul cost per connection
PSTN
Internet
2.4 m antenna3.8 m antenna
15 -20 Kms with 100 connections
For inaccessible Rural Areas
2 M
bps
-->
128
Kbp
s --
>
<-- 64 Kbps
ISRO-IITM
To Sum Up
Telecom will take off in a major way in India in coming years
– most regulatory hurdles crossed– focus on reduction on CAPEX
Can Telecom help in Doubling India’s Rural GDP– will change India– Internet is Power
can we have a micro-bank in every village in the next five years