Convergence &

the Global Information Society

Dilip Modi, Chairman, Cellular Operators Association of India

June 16, 2004 @ Singapore
Importance of Telecommunications

Information is the Key to the Social & Economic

Development of a Nation.

Axiomatic that efficient, widespread affordable telecomm

services critical for the spread of knowledge & information.

Jipp’s law shows that there is a strong correlation between

telecommunication (as measured by tele density) and
economic development (GDP per capita)

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Mobile- The Global Future

Cumulative global cellular subscribers have exceeded fixed lines connections.

– India’s mobile numbers to cross fixed lines in 2004

Mobile subscriber penetration to triple by 2007 in emerging economies.

Wireless devices for data to grow twice as quickly in the developing world
than in the developed world by 2010
Source : Telecompetition Inc.

By 2005, in most developed countries, after several years of heady growth,

the mobile subscribers additions to plummet to nearly zero.
Source : Baskeville’s Global Mobile forecast- 2010 report

Asia – vast Potential….China and India set to buck the trend

Emerging economies - the growth engines
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Asia - The Mobile scene

By 2005

In Asia Pacific an 8% penetration of mobile users would translate into 282 million.

In the US, 83% penetration would mean 224 million

In Western Europe, 91% penetration would mean 409 million

Source : ARC Group Consultants

Asia Pacific - a vast potential - slated to be

the largest telecom market by 2005; China &

India account for almost 70% of the population

Source: Yankee Group research firm

2000-2010 : The Mobile Decade

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India – A Large & Vibrant Economy

Population - 1.1 Bn (72 : 28 Rural : Urban divide*)

Literacy Rate - 65.38 % (Rural literacy grown from 22% to

60% over 40 years*)

Purchasing Power Parity #

US $ 10.414 Trillion
China $ 5.792 Trillion
Japan $ 3.481 Trillion
India $ 2.778 Trillion

Geographic Dispersal (Area : 3287263 Sq km)

18 National Recognised Languages

Young Nation (51% population below age of 35)

INDIA

* Census 2001
# Source – World Bank Data base
Demography Matters …
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India unbound

India is third largest economy in Asia & one of the fastest growing one.

Annual GDP growth rate of at least 6% over next 5-10 years

Staggering growth over 10% in 3rd & 4th quarter last year

Set to emerge as 3rd largest economy in the world by 2020

9 - 10% real-term economic growth over next 25 years

India- a major global hub for IT & IT enabled services

Mobile technology transforming people’s lives tremendously

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India - Telecom Unleashed!

7th largest network in the world

2nd largest among emerging economies
Current worth estimated at US$9 billion Projected to cross over
US$100 billion by 2020
2 million new mobile phone subscribers added every month
Market for mobile phones projected to double this year
Mobile phones growing faster than fixed line phones
103 state-of-the art Networks (GSM + CDMA) on Air
Services in over 2000 cities & towns
Around 36 million mobile subscribers (GSM + CDMA) - end May 2004

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India…Leapfrogging Technology

9 Mobile – Major Contributor to Tele density

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Total – 8%
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5 Fixed – 4.5%

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Mobile – 3.5%
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0
1997 1998 1999 2000 2001 2002 2003 2004

Mobile – Fixed crossover expected in 2004

Cellular constitutes 45% of current national tele density – has played an important
role in taking overall tele density from 0.8 in 1994 to 8 in 2004
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India…Leapfrogging Technology

India…Fixed Line Telephone penetration at less than 2% at the time of

introduction of Mobile Telephony compared to significant double digit
penetration in the developed World.
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 Key Enablers

Affordability Availability
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2200

Effective Tariffs – 400 Minute Basket

2000 Increased Coverage
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1800 Number of Cities & Towns 1640
1575
1600
Cents per minute

5 1481
1400
4 1116
1200 918
3 1000

800 607
2 421
600

1 400 249

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In last 3 years alone, cellular tariffs have plummeted

by 80% from 6 cents/minute to 1.2 cents/minute
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Falling ARPUs Need
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1USD=Rs. 45
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High Potential for “Connectivity”
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both in rural & urban areas
In USD

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Mobility : The “killer” application
0
2001 2002 2003 2004

Source: Price Waterhouse, TRAI Quarterly

Performance Indicators, Sept ‘03 10
The impact of Mobile
Life Improving
Providing greater access to
communication and
information to more people,
in more places, worldwide
Allowing developing nations
to enjoy the same
communication access
privileges as wealthier
countries
Increasing forms of
communication and
entertainment – SMS, MMS,
video messaging and gaming
Life Changing
Mobile telephony is changing
the very fabric of how we
conduct our day-to-day lives
Proximity is no longer key to
communication and
interaction
There has been a complete
shift to a mobile way of life
Mobile phones have
revolutionized the world of
work, organizing your social
life, sourcing information on
the move and even dating!
Life Saving
Mobile technology is offering
individuals and health and
safety organizations new
applications for saving lives
The mobile phone is now a
key support application in
emergency situations around
the globe
A means for parents to keep
in touch with their children,
particularly teenagers
An increasingly important
communication factor in
emergency calls, particularly
in isolated locations
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Mobility a bearer of Convergence ?

GSM TeleDocs
General Practitioners are using GSM-based
General Packet Radio Service to deliver
healthcare and medical services to rural India

Mandi Prices on the Move

Mobile Technology being used to remove
information barriers & allow the farmers to get
best price for their produce

Kerala Fishermen Call in their Catch

Fisherman pass valuable information on their
mobile phones as to where large shoals are
available and for calling for assistance when
calamity strikes

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The real revolution has been the continuous growth
of the low income group market

Issues to be addressed

Affordability Handset cost an entry barrier

• All costs are dollar denominated and not in
line with Purchasing Power Parity
• Difficult for carriers to subsidise in a low /
declining ARPU environment

Content & Application Content needs to be organised and Application

First Phone developed to cater to the first digital device in
Mobile Phone First Digital Camera the hands of the Indian consumer
First Computer

Availability Rural coverage to be enhanced – Only 1.5% Rural

Teledensity achieved to-date

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Broadband – the Next Frontier
Indian Regulator has identified Broadband as the next focus area & has
recommended the following targets:
Year Ending Numbers
2005 3 Millions
2007 9 Millions
2010 20 Million

Expected that broadband will have an even more explosive impact on the market
than cellular mobile

Objective is to make broadband extremely affordable in order to drive its growth,

affordability target laid down as USD 8 per month – for market to really explode

Indian GSM operators can play a key role in contributing to growth of broadband
through 3G services
Key Internet and Broadband Indicators
Parameters Korea Malaysia China India
GDP (US$ Per capita) 10,000 4,000 965 465
No. of Internet connections 26 12 2.5 0.4
(per 100 persons)
No. of broadband connections 25 0.4 1.4 0.02
(per 100 persons)
Charges for broadband 30 29 16 20
(per month US$) Source : TRAI
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 Drivers & Initiatives

Driver Focus Areas Initiatives

Affordability Cost of backhaul & device Lower domestic Bandwidth cost through reduction
in levies & duties
Lower International Bandwidth cost through opening
up of bottleneck facilities at landing stations
Promotion of National Internet Exchange to reduce
reliance on international bandwidth
Reduction in cost of PCs

Need Content & Application At State Level

Project Bhoomi - Computerisation of land records &
electronic tracking of change of ownership details
Project E-Seva – Providing citizens with services for
payment of utility bills, birth certificates & provision of
Govt orders online

Availability Ubiquitous Access/Reach Unbundled Local loop of incumbent

Incentivization for roll out in rural areas

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Can mobility be the bearer for Convergence in the
Asia-Pacific Region?

US-Canada Europe Asia-Pacific

2001

Shifting Pattern of Mobile Growth in the World

2005

With China and India becoming the manufacturing & service bases to the world, the
future will witness shifting of wealth, to areas with a higher share of population
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 Thank You

Dilipmodi@mcorpglobal.com

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