Exhibit 11 Post NTP 99 Entry Fee for Cellular and Fixed Line Service Licences Sr. No. Service Area Entry Fee for Cellular Service Providers (Rs million) Fixed Line Services Service Providers Entry Fee (Rs million ) Existin !ith L"# Existin "$erators Ne% "$erators 1 Maharashtra 5691.3 MTNL/BSNL/ Hughes Ispat HFCL/Relia!e Tele!"# $95% 115% Mu#&ai 915.' ( '3.3) * +,hra -ra,esh 3'1*.5 BSNL/Tata Teleser i!es Relia!e Tele!"# *'1% 35% 3 u0arat 6116.3 BSNL/Relia!e Tele!"# Tata Teleser i!es 195% '%% ' Ma,h a -ra,esh 1$$. BSNL/BT2L Relia!e Tele!"#/ Tata Teleser i!es 3% *%% 5 -u0a& '%* .1 BSNL/HFCL Relia!e Tele!"#/ Tata Teleser i!es *65% *%% 6 Ra0astha 13%*.3 BSNL/Sh a# Tele!"# Relia!e Tele!"#/ Tata Teleser i!es 16%% *%% $ elhi **.9 (65'. ) MTNL BT2L/Relia!e Tele!"#/ Tata Teleser i!es *5% 5%% Ta#il Na,u * 5%.% BSNL BT2L/Relia!e Tele!"#/Tata Teleser i!es *5% 5%% Cheai 1 5.3 (1$%.5) 9 4arata a ''3*.3 BSNL BT2L/Relia!eTele! "#/ Tata Teleser i!es 1$5 35% 1% est Begal 7 BSNL Relia!e Tele!"#/ Tata Teleser i!es 1*5 *5% 4"l ata *$6.* (*15.3) 11 4erala 1$6*.5 BSNL HFCL/Relia!e Tele!"#/ Tata Teleser i!es 1%% *%% 1* 8ttar -ra,esh ( ast) 1 9$. BSNL Relia!e Tele!"#/ Tata Teleser i!es $5 15% 13 8ttar -ra,esh ( est) 13 '.$ BSNL HFCL/Relia!e Tele!"#/ Tata Teleser i!es $5 15% 1' Har aa 91$.9 BSNL BT2L/Relia!e Tele!"#/ Tata Teleser i!es 5% 1%% 15 Bihar 7 BSNL Relia!e Tele!"#/ Tata Teleser i!es 5% 1%% 16 :rissa 7 BSNL Relia!e Tele!"#/ Tata Teleser i!es *5 5% 1$ +ssa# 7 BSNL Relia!e Tele!"# *5 5% 1 Hi#a!hal -ra,esh 51.% BSNL Relia!e Tele!"# 1% *% 19 ;a##u a, 4ash#ir 7 BSNL 7 1% *% *% N"rth ast 7 BSNL Relia!e Tele!"# 1% *% *1 +,a#a a, Ni!"&ar 7 BSNL 7 %.1 1% Source& %%%.trai.ov.in' a!!esse, " Mar!h * < *%%*. 1. Figures i &ra! ets are the se!", "perat"r=s >ees i the !"!ere, !ir!le. *. MTNL a, BSNL ?ere "t re@uire, t" &i,.
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10 of 10IIMA/PSG0092(A)IIMA/PSG92A
Exhibit 11Post NTP 99 Entry Fee for Cellular and Fixed Line Service Licences
Sr. No.Service AreaEntry Fee for CellularService Providers(Rs million)Fixed Line Services
Service ProvidersEntry Fee(Rs million)
ExistingWith LOIExisting OperatorsNew Operators
1Maharashtra 5691.3MTNL/BSNL/ Hughes IspatHFCL/Reliance Telecom79501150
Mumbai915.4 (843.3)
2Andhra Pradesh 3412.5BSNL/Tata TeleservicesReliance Telecom2410350
3Gujarat 6116.3BSNL/Reliance TelecomTata Teleservices1950400
4Madhya Pradesh177.8BSNL/BTVLReliance Telecom/ Tata Teleservices380200
5Punjab 4028.1BSNL/HFCLReliance Telecom/ Tata Teleservices2650200
6Rajasthan1302.3BSNL/Shyam TelecomReliance Telecom/ Tata Teleservices1600200
7Delhi822.9 (654.8)MTNLBTVL/Reliance Telecom/ Tata Teleservices250500
8Tamil Nadu 2850.0BSNLBTVL/Reliance Telecom/Tata Teleservices250500
Chennai185.3 (170.5)
9Karnataka4432.3BSNLBTVL/RelianceTelecom/ Tata Teleservices175350
10West Bengal -
BSNLReliance Telecom/ Tata Teleservices125 250
Kolkata276.2 (215.3)
11Kerala1762.5BSNLHFCL/Reliance Telecom/ Tata Teleservices100200
12Uttar Pradesh (East)1897.8BSNLReliance Telecom/ Tata Teleservices75150
13Uttar Pradesh (West)1384.7BSNLHFCL/Reliance Telecom/ Tata Teleservices75150
14Haryana917.9
BSNLBTVL/Reliance Telecom/ Tata Teleservices50100
15Bihar-BSNLReliance Telecom/ Tata Teleservices50100
16Orissa-BSNLReliance Telecom/ Tata Teleservices2550
17Assam-BSNLReliance Telecom 2550
18Himachal Pradesh51.0BSNLReliance Telecom 1020
19Jammu and Kashmir-BSNL-1020
20North East-BSNLReliance Telecom 1020
21Andaman and Nicobar-BSNL-
0.110
Source: www.trai.gov.in, accessed on March 28, 2002.1. Figures in brackets are the second operator's fees in the concerned circle.2. MTNL and BSNL were not required to bid.29 of 33IIMA/PSG0092(A)A
Exhibit 12Market Assessment(March 31, 2001)
Sr. No.Service Area
(1)Geographical Area
(2)
(000 sq km)PopulationUrban PopulationPer Capita Income (2000)
(7)
(US$)VehiclesTwo WheelersDirect Exchange LinesAverage Revenue per User
(14)(Rs per month)
Number
(3)
(million)Expected Annual GrowthRate(4)
(%)Number
(5)
(million)Expected Annual GrowthRate(6)
(%)Number
(8)
(million)Expected Annual GrowthRate(9)
(%)Number
(10)
(million)ExpectedAnnual Growth Rate(11)
(%)Number
(12)
(million)ExpectedAnnual Growth Rate(13)
(%)
Metro
1Chennai- 6.7 2.16.72.1568 1.3 9.0 0.6 12.7 0.8 17.61,237
2Delhi1.513.54.613.54.67174.39.63.75.71.89.31,100
3Kolkata- 19.8 2.419.82.46040.87.7 0.6 8.2 1.9 16.9760
4Mumbai-18.32.518.32.5661 1.2 11.71.29.8 2.7 15.11,100
A Circle
5Andhra Pradesh275.1 79.0 2.2 17.9 2.6333 4.3 11.03.37.1 2.2 22.8694
6Gujarat193.0 49.7 1.7 13.9 1.74705.68.54.17.4 2.5 16.1745
7Karnataka191.8 52.3 1.9 13.9 2.33473.911.03.08.52.218.5781
8Maharashtra307.6 98.7 2.1 31.8 2.15845.711.04.69.8 6.2 16.6694
9Tamil Nadu130.163.91.219.41.54393.29.04.110.2 3.718.6644
B Circle
10Haryana44.2 20.9 1.16.02.2547 1.3 9.01.14.80.917.4659
11Kerala38.9 32.9 2.1 7.2 1.13061.99.01.510.2 2.3 17.1535
12Madhya Pradesh308.2 83.6 1.717.12.12513.69.03.410.6 1.5 17.4592
13Punjab50.4 24.3 2.3 7.0 1.76153.116.03.59.2 1.8 18.7632
14Rajasthan342.2 56.3 2.3 11.5 2.33112.810.02.610.01.519.2620
15Uttar Pradesh (East)240.9 91.7 2.3 19.1 2.31512.39.02.211.1 1.3 20.7608
16Uttar Pradesh (West) 75.1 2.2 15.6 2.3320 2.3 9.02.211.1 1.1 20.7690
17West Bengal88.8 81.2 2.223.32.2319 1.1 12.01.08.2 0.7 21.9516
C Circle
18Bihar94.2 102.2 2.1 14.0 2.11201.97.01.55.8 0.7 20.8649
19Himachal Pradesh55.7 6.0 1.9 0.5 1.9275 0.2 5.00.19.9 0.321.2362
20Orissa155.736.61.85.11.8202--0.97.80.5-576
Total/Average2518.31012.72.1281.62.340750.810.045.28.936.617.38710
Source: (i) www.censusindia.net, accessed on February 25, 2002. (1) (ii) Cellular Operators Association of India, Telecom Regulatory Authority of India, Tata Statistical Outline (7,14) (iii) Internal Documents (3-6, 8-13), (8-11) derived from Motor Transport Statistics of India, as on 31st March, 19973 of 3IIMA/PSG0092(A)A
Exhibit 13Comparative Analysis for Wireline, Cellular and WLL in a Typical Metro
ParameterWirelineCellular (GSM)WLL (CDMA)
Capex Cost per Subscriber
Initial rollout (US $)400-500 125-150125-175
Incrementalexpansion (US $125-15070 85
Handset Cost (Rs)8003,000 to 30,0005,000 to 12,000
Rental (Rs/month)250295250 (TRAI has specified 200)
Air time Rate
Outgoing (Rs)
1.20 for 3 minutes0.90 for 30 seconds (about half for high commitment ARPU plans)Same as wireline
Incoming (Rs)Free0.90 per 30 seconds(free for high commitment ARPU plans)Free
Expected Usage
Post paid (minutes)300-400400-600
Pre-paid (minutes)75-100No data at present (but likely to be 125-175)
ARPU
Post paid (Rs/month)7191200-16001000 - 1100
Pre-paid (Rs/month)-400-500-
Spectrum IssuesNA4.4 + 4.4 MHz each for three operators in the 900 MHz band and 5 +5 MHz for the fourth operator in the 1800 MHz band Up to 5 + 5 MHz each for an operator in the 900 MHz and similarly in the 1800 MHz bands on first come first served basis, with initial allotment of 1.25 +1.25 MHz.
ReliabilityProvenProvenEstimated 2,00,000 lines in service in India.
Time to Roll Out 6-8 months from scratch, 12-20 days incremental 4-8 months from scratch4-8 months from scratch
CommentsHigh capex cost including for the last mile Network effect given existing 7.5 million subscriber base is in its favour.
We forecast 32.7 million subscribers all-India by 2007.
Roaming permitted
Our estimation for an existing network with 500,000 capacity suggests likely return on capital employed of 14% based on current tariff structure.
Short Message Service exchange between CDMA and GSM networks yet to be commercially established. Good option for wireline incumbent to leverage at low incremental cost. Global experience suggests a market once dominated by a platform (GSM) not easily amenable to a switch. Recent experience in China, after the country attained a mobile penetration of 14.1%, met with limited success. However, prospects in India are better, given the low 0.62% mobile penetration.
We forecast 11.6 million subscribers all-India by 2007.
Service limited to SDCA only. On going debate on whether roaming is permitted.
Our quick estimation for a 250,000 capacity network suggests likely return on capital employed of 10%.
Interoperability between CDMA and GSM networks was demonstrated at the recent FIFA world Cup.
Source: I-SEC Research, Indian Telecom Sector.Analysis of Operating Costs
ParameterGSMWireline
Variable Cost(55%)(51%)
Bad Debt5%6%
Billing4%-
Collection3%-
Interconnection34%62%
Licence Fee 40%20%
Sales and Acquisition8%12%
SIM Cost2%-
Spectrum Charges4%-
Total100%100%
Fixed Cost(45%)(49%)
Administration23%23%
Advertisement and Promotion21%1%
Employee Cost28%68%
Network Cost28%8%
Total100%100%
Source: I-SEC Research, Indian Telecom Sector.
Cellular Return Model for Incremental Subscriber
Parameter
Costs
Interconnect Share20%
Sales and Advertisements5%
Employees7%
Bad Debt3%
Networking8%
Administrative Expenses7%
Total Operating Costs50%
EBITDA Margins50%
EBITDA Revenue Share15%
Operating Profit35%
Annual Revenues (US $)108
Operating Profit (at 35% of Revenue)(US $)37.8
Capex (US $)100
ROCE38%
Source: Morgan Stanley Dean Witter Research, India Telecommunications, March 21, 2001
Exhibit 11Post NTP 99 Entry Fee for Cellular and Fixed Line Service Licences
Sr. No.Service AreaEntry Fee for CellularService Providers(Rs million)Fixed Line Services
Service ProvidersEntry Fee(Rs million)
ExistingWith LOIExisting OperatorsNew Operators
1Maharashtra 5691.3MTNL/BSNL/ Hughes IspatHFCL/Reliance Telecom79501150
Mumbai915.4 (843.3)
2Andhra Pradesh 3412.5BSNL/Tata TeleservicesReliance Telecom2410350
3Gujarat 6116.3BSNL/Reliance TelecomTata Teleservices1950400
4Madhya Pradesh177.8BSNL/BTVLReliance Telecom/ Tata Teleservices380200
5Punjab 4028.1BSNL/HFCLReliance Telecom/ Tata Teleservices2650200
6Rajasthan1302.3BSNL/Shyam TelecomReliance Telecom/ Tata Teleservices1600200
7Delhi822.9 (654.8)MTNLBTVL/Reliance Telecom/ Tata Teleservices250500
8Tamil Nadu 2850.0BSNLBTVL/Reliance Telecom/Tata Teleservices250500
Chennai185.3 (170.5)
9Karnataka4432.3BSNLBTVL/RelianceTelecom/ Tata Teleservices175350
10West Bengal -
BSNLReliance Telecom/ Tata Teleservices125 250
Kolkata276.2 (215.3)
11Kerala1762.5BSNLHFCL/Reliance Telecom/ Tata Teleservices100200
12Uttar Pradesh (East)1897.8BSNLReliance Telecom/ Tata Teleservices75150
13Uttar Pradesh (West)1384.7BSNLHFCL/Reliance Telecom/ Tata Teleservices75150
14Haryana917.9
BSNLBTVL/Reliance Telecom/ Tata Teleservices50100
15Bihar-BSNLReliance Telecom/ Tata Teleservices50100
16Orissa-BSNLReliance Telecom/ Tata Teleservices2550
17Assam-BSNLReliance Telecom 2550
18Himachal Pradesh51.0BSNLReliance Telecom 1020
19Jammu and Kashmir-BSNL-1020
20North East-BSNLReliance Telecom 1020
21Andaman and Nicobar-BSNL-
0.110
Source: www.trai.gov.in, accessed on March 28, 2002.1. Figures in brackets are the second operator's fees in the concerned circle.2. MTNL and BSNL were not required to bid.
IIMA/PSG0092(A)A6 of 6
Exhibit 12Market Assessment(March 31, 2001)
Sr. No.Service Area
(1)Geographical Area
(2)
(000 sq km)PopulationUrban PopulationPer Capita Income (2000)
(7)
(US$)VehiclesTwo WheelersDirect Exchange LinesAverage Revenue per User
(14)(Rs per month)
Number
(3)
(million)Expected Annual GrowthRate(4)
(%)Number
(5)
(million)Expected Annual GrowthRate(6)
(%)Number
(8)
(million)Expected Annual GrowthRate(9)
(%)Number
(10)
(million)ExpectedAnnual Growth Rate(11)
(%)Number
(12)
(million)ExpectedAnnual Growth Rate(13)
(%)
Metro
1Chennai- 6.7 2.16.72.1568 1.3 9.0 0.6 12.7 0.8 17.61,237
2Delhi1.513.54.613.54.67174.39.63.75.71.89.31,100
3Kolkata- 19.8 2.419.82.46040.87.7 0.6 8.2 1.9 16.9760
4Mumbai-18.32.518.32.5661 1.2 11.71.29.8 2.7 15.11,100
A Circle
5Andhra Pradesh275.1 79.0 2.2 17.9 2.6333 4.3 11.03.37.1 2.2 22.8694
6Gujarat193.0 49.7 1.7 13.9 1.74705.68.54.17.4 2.5 16.1745
7Karnataka191.8 52.3 1.9 13.9 2.33473.911.03.08.52.218.5781
8Maharashtra307.6 98.7 2.1 31.8 2.15845.711.04.69.8 6.2 16.6694
9Tamil Nadu130.163.91.219.41.54393.29.04.110.2 3.718.6644
B Circle
10Haryana44.2 20.9 1.16.02.2547 1.3 9.01.14.80.917.4659
11Kerala38.9 32.9 2.1 7.2 1.13061.99.01.510.2 2.3 17.1535
12Madhya Pradesh308.2 83.6 1.717.12.12513.69.03.410.6 1.5 17.4592
13Punjab50.4 24.3 2.3 7.0 1.76153.116.03.59.2 1.8 18.7632
14Rajasthan342.2 56.3 2.3 11.5 2.33112.810.02.610.01.519.2620
15Uttar Pradesh (East)240.9 91.7 2.3 19.1 2.31512.39.02.211.1 1.3 20.7608
16Uttar Pradesh (West) 75.1 2.2 15.6 2.3320 2.3 9.02.211.1 1.1 20.7690
17West Bengal88.8 81.2 2.223.32.2319 1.1 12.01.08.2 0.7 21.9516
C Circle
18Bihar94.2 102.2 2.1 14.0 2.11201.97.01.55.8 0.7 20.8649
19Himachal Pradesh55.7 6.0 1.9 0.5 1.9275 0.2 5.00.19.9 0.321.2362
20Orissa155.736.61.85.11.8202--0.97.80.5-576
Total/Average2518.31012.72.1281.62.340750.810.045.28.936.617.38710
Source: (i) www.censusindia.net, accessed on February 25, 2002. (1) (ii) Cellular Operators Association of India, Telecom Regulatory Authority of India, Tata Statistical Outline (7,14) (iii) Internal Documents (3-6, 8-13), (8-11) derived from Motor Transport Statistics of India, as on 31st March, 19978 of 8IIMA/PSG0092(A)A
Exhibit 13Comparative Analysis for Wireline, Cellular and WLL in a Typical Metro
ParameterWirelineCellular (GSM)WLL (CDMA)
Capex Cost per Subscriber
Initial rollout (US $)400-500 125-150125-175
Incrementalexpansion (US $125-15070 85
Handset Cost (Rs)8003,000 to 30,0005,000 to 12,000
Rental (Rs/month)250295250 (TRAI has specified 200)
Air time Rate
Outgoing (Rs)
1.20 for 3 minutes0.90 for 30 seconds (about half for high commitment ARPU plans)Same as wireline
Incoming (Rs)Free0.90 per 30 seconds(free for high commitment ARPU plans)Free
Expected Usage
Post paid (minutes)300-400400-600
Pre-paid (minutes)75-100No data at present (but likely to be 125-175)
ARPU
Post paid (Rs/month)7191200-16001000 - 1100
Pre-paid (Rs/month)-400-500-
Spectrum IssuesNA4.4 + 4.4 MHz each for three operators in the 900 MHz band and 5 +5 MHz for the fourth operator in the 1800 MHz band Up to 5 + 5 MHz each for an operator in the 900 MHz and similarly in the 1800 MHz bands on first come first served basis, with initial allotment of 1.25 +1.25 MHz.
ReliabilityProvenProvenEstimated 2,00,000 lines in service in India.
Time to Roll Out 6-8 months from scratch, 12-20 days incremental 4-8 months from scratch4-8 months from scratch
CommentsHigh capex cost including for the last mile Network effect given existing 7.5 million subscriber base is in its favour.
We forecast 32.7 million subscribers all-India by 2007.
Roaming permitted
Our estimation for an existing network with 500,000 capacity suggests likely return on capital employed of 14% based on current tariff structure.
Short Message Service exchange between CDMA and GSM networks yet to be commercially established. Good option for wireline incumbent to leverage at low incremental cost. Global experience suggests a market once dominated by a platform (GSM) not easily amenable to a switch. Recent experience in China, after the country attained a mobile penetration of 14.1%, met with limited success. However, prospects in India are better, given the low 0.62% mobile penetration.
We forecast 11.6 million subscribers all-India by 2007.
Service limited to SDCA only. On going debate on whether roaming is permitted.
Our quick estimation for a 250,000 capacity network suggests likely return on capital employed of 10%.
Interoperability between CDMA and GSM networks was demonstrated at the recent FIFA world Cup.
Source: I-SEC Research, Indian Telecom Sector.Analysis of Operating Costs
ParameterGSMWireline
Variable Cost(55%)(51%)
Bad Debt5%6%
Billing4%-
Collection3%-
Interconnection34%62%
Licence Fee 40%20%
Sales and Acquisition8%12%
SIM Cost2%-
Spectrum Charges4%-
Total100%100%
Fixed Cost(45%)(49%)
Administration23%23%
Advertisement and Promotion21%1%
Employee Cost28%68%
Network Cost28%8%
Total100%100%
Source: I-SEC Research, Indian Telecom Sector.
Cellular Return Model for Incremental Subscriber
Parameter
Costs
Interconnect Share20%
Sales and Advertisements5%
Employees7%
Bad Debt3%
Networking8%
Administrative Expenses7%
Total Operating Costs50%
EBITDA Margins50%
EBITDA Revenue Share15%
Operating Profit35%
Annual Revenues (US $)108
Operating Profit (at 35% of Revenue)(US $)37.8
Capex (US $)100
ROCE38%
Source: Morgan Stanley Dean Witter Research, India Telecommunications, March 21, 2001
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