Evolution of GSM in IndiaEvolution of GSM in India
T V Ramachandran, Director GeneralT V Ramachandran, Director General
September 13, 2005September 13, 2005
Status of GSM IndustryStatus of GSM Industry
Cellular services started in India in 1995; GSM was the mandated standard.
Above Government decision proved to be beneficial for India as GSM has been established as the dominant standard.
As of August 2005, there were nearly 50 million GSM subscribers which constitutes 80% of the total cellular subs.
The month of July and August witnessed record growth in GSM subscriber addition of about 2 million.
75% of the new mobile subscribers in India choose GSM.
There are 83 state-of-the art Networks of GSM.
Roll out of services in more than 4,000 town & cities and more than 60,000 villages.
Total Private GSM Investments are over Rs 50,000 crores.
GSM-Fixed Crossover achieved in April 2005.GSM-Fixed Crossover achieved in April 2005.
GSM Growth Through the YearsGSM Growth Through the Years
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45
1997 1998 1999 2000 2001 2002 2003 2004 2005
Year ended April
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Several points of inflexion in the past, have given Several points of inflexion in the past, have given kick-start to improved cellular growthkick-start to improved cellular growth
NTP’99
3rd & 4th Cellular
CPP
Steeply falling tariffs have ensured affordable Steeply falling tariffs have ensured affordable services to a large subs baseservices to a large subs base
6
0.41.6
0.442
3.58
14 14
13
51.53
6.5
3.581.881.20.88
33.31
0
2
4
6
8
10
12
14
16
1998 1999 2000 2001 2002 2003 2004 2005
Effe
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Mo
bile
sub
scr
iber
bas
e (in
Mill
ion
)
Effective charge (in Rs. Per min) Subscriber Base (in mn)
3 rd & 4 t h C ellular Op erat or
C PP Int roduced
Lo wering o f A D C f rom 3 0 % t o 1 0 % o f sect o r
revenueNTP ' 9 9
Rates per minute have fallen by over 90% in the last seven years.
Source: TRAI Study paper No 2/2005
Introduction of CDMA
GSM - the dominant standard in IndiaGSM - the dominant standard in India
GSM constitutes around 80% of the cellular market in India.
Market share of GSM continues to rise steadilyMarket share of GSM continues to rise steadily
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2000 2001 2002 2003 2004 2005
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GSM CDMA
GSM Increasing its Market Share GloballyGSM Increasing its Market Share Globally
Indian GSM industry is in sync with the worldwide standards; worldwide GSM constitutes 75% of the
subs base and 80% of the monthly additions.
0200400600800
1000120014001600
1992
1994
1996
1998
2000
2002
2004
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GSM CDMAGSM
Launch CDMA
Launch
GSM AdvantagesGSM Advantages
GSM advantages over other cellular technologies are:GSM advantages over other cellular technologies are:
Dominant global market share of GSM gives benefits: Large number of infrastructure and handset vendor’s giving
advantage in terms of price and other commercial terms. Innovations ahead of CDMA e.g. single chip handsets.
Widest choice of handsets with widespread sales and service distribution network.
Handset availability in all price segments and ongoing introduction of wide variety to meet customer requirements.
Easy subscription process (SIM based)
Widespread prepaid solutions
Seamless interoperability between networks and handsets.
Global footprint for international roaming including SMS, data and other value added services.
GSM Overall EfficiencyGSM Overall Efficiency
For OperatorsFor Operators
Economies of scale due to dominant market share: worldwide and India
Choice of multiple vendors Capex optimisation Lower subscriber
acquisition cost Seamless interoperability
For SubscribersFor Subscribers
Low cost entry handsets
Wide choice and availability of handsets
International roaming
Easy subscription
Affordable Services for Common ManAffordable Services for Common Man
Mobile has fast moved from a class service to a mass service for the common man – fuelled by continuously
falling tariffs and increased coverage.
Connectivity for the farmers
Better prices for the
produce
Affordable Services for Common ManAffordable Services for Common Man
Affordability has made mobile services the key plank for economic development.
Mandi Prices on the Move
Kerala Fishermen
Call in their Catch
NEW REVENUE OPPORTUNITIES – VASNEW REVENUE OPPORTUNITIES – VAS
Airtel Live portal with games, music, cricket, stock, news, easy charge facility, logos, range of voice activated services, games, missed call alerts, Airtel Live, Hello Tunes etc.
HutchOnline Yahoo & MSN Messenger, Java based games, missed call alerts, logos, games, news, stock, range of voice activated services, Caller Tunes, etc.
IdeaDaily horoscopes, cellular jockey to send musical greeting cards, voice activated services, music, logos, news, stock, movies, cricket, games, jokes, Dialer Tones, etc.
BPLRingtones, logos, picture messages, send-a-song, mobile gaming, etc.
SpiceRingtones, logos, picture messages,SMS Chat, mobile gaming, etc.
AircelRingtones, logos, picture messages, games, music, etc.
health tips
ringtones
mobile gaming
Revenues Form Value Added ServicesRevenues Form Value Added Services
9%
3%
7%
10% 8%9%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2003 2004
Postpaid Prepaid Total
VAS Revenue as % to Net Service Revenue
SMS Clip Others
VAS Revenue composition for 2004 (in %)
8%
65%27%
VAS shows promising trends, share in total net service
revenue increasing continuously
Source: PWC Indian GSM Cellular Benchmarking Study 2004
Potential of the SectorPotential of the Sector
Private GSM subscriber base has the potential to reach 103 million subscribers by Dec’07 from the present level of 36 million in August’05.
Projected growth of private GSM sector is as given below:
103 65 42 3628 Private GSM
Dec. 2007 (Projected)
Dec. 2006 (Projected)
Dec 2005 (Projected)
August 2005 (Actual)
Dec. 2004 (Actual)
Year ending
In Million
This will contribute in a substantial manner to overall This will contribute in a substantial manner to overall target of 250 mn telephone subs (fixed+mobile) by target of 250 mn telephone subs (fixed+mobile) by
2007 set by the Government2007 set by the Government
Push Towards Next GenerationPush Towards Next Generation
India represents one of the most exciting opportunities for mobile services in the coming decade.
We are already providing 2G and 2.75G services.
The next big push would be the introduction of 3G services.
Early and expeditious introduction of 3G services in Early and expeditious introduction of 3G services in India will hold the key to India’s mobile success India will hold the key to India’s mobile success and its future dominance in mobile telephonyand its future dominance in mobile telephony
3G in India3G in India
3G will be introduced in India by 2006.
3G upgradation for GSM is 3GSM (WCDMA).
In India GSM constitutes 80% of the total cellular market; this will form a ripe base for 3GSM (WCDMA).
Worldwide also 3GSM (WCDMA) drives the 3G growth.
GSM - Predominant Global Mobile Standard GSM - Predominant Global Mobile Standard for 3Gfor 3G
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3GSM (WCDMA)
CDMA 2000 1xEVDO
As of date, As of date, 3GSM subscribers have crossed 30 million3GSM subscribers have crossed 30 million, , accounting for around accounting for around 70% of the 3G market70% of the 3G market. . GSM share GSM share
continues to risecontinues to rise month after month month after month
Benefits of 3G for IndiaBenefits of 3G for India
3G has a 4-5 times higher voice capacity than present 2G services.
An ideal platform to deliver low cost voice telephony to Indian consumers.
3G has hi-speed data capabilities It will fulfill the content rich mobility experience for
urban Indians.
3G will help in enhancing India’s competitiveness in the ITES / BPO segment.
Extremely effective tool in driving penetration of the huge addressable market in the rural areas.
3G will also enable achieving the broadband objectives of the Government.
3G will integrate India and Indian consumer with the far 3G will integrate India and Indian consumer with the far reaching developments taking place across the world.reaching developments taking place across the world.
Mobile Broadband – The Next FrontierMobile Broadband – The Next Frontier
Mobile phone is fast becoming the dominant technology for voice communications.
Mobile phone is becoming less & less of a narrowband device as it evolves through 2G to 2.5G to 2.75G to 3G.
“the mobile phone has moved beyond being a mere device to become a key “social object” present in every aspect of our daily lives”.
Lara Srivastava, ITU
3G probably provides the best ubiquity3G probably provides the best ubiquity in broadband in broadband connectivity – always on, fast enough….connectivity – always on, fast enough….
India’s Path to Mobile BroadbandIndia’s Path to Mobile Broadband
India’s path to Mobile Broadband must be through 3G in the WARC-92 identified Core Band of 1920-1980 MHz p/w 2110-2170 MHz because :
Only band globally harmonized for interference free co-existence of both GSM & CDMA
Equipment available for both technologies in this band Majority of countries have opted for 3G in the Core Band Japan & Korea live examples where GSM & CDMA are co-
existing in the Core Band
India by choosing this globally adopted spectrum band will be able to avail of
Economies of scale – lower tariffs Seamless roaming Inter-operability Interference free operations
India being a country where both GSM & CDMA co-exist must choose a 3G path which allows for the co-existence as well as future growth & development of both technologies
GSM has been the prime growth driver GSM has been the prime growth driver of Telecom services in India and would of Telecom services in India and would
continue to be the same for new continue to be the same for new evolving technologies and innovations.evolving technologies and innovations.
THANK YOUTHANK [email protected]@coai.in