Growth of Telecom in India

Ashish Chowdhary Nokia

India

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 Very Positive Macroeconomic Trends
Fastest Growing Economy for the next 50 yrs World’s growth engine - Fastest growing
#1 (Goldman Sachs) economy by 2012

25 Yrs Median age for Indians

58% % of eligible voters casting votes in India (64% in the

US)

2% Loans written off in India (China is 20%)

Engineers produced annually in India

350,000
Source: Goldman Sachs

4.0% Inflation in 2005. Down from previous year (5% in

2004)

GDP Growth in Q1 2006. GDP for FY2005 revised

9.3% upwards to 8.4%
GDP Growth of BRIC & G6 Economies
China
US
50,000 India
India’s Share of All International money flowing Into
20% Emerging Markets
45,000
40,000
35,000 World’s third largest
Brazil
Russia
30,000

U S ($ )
Growth of Indian stock market in last 5 yrs (US mkt economy by 2032
148% growth 6%)
25,000
20,000
15,000
Italy
France
Germany
10,000

$164B
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Forex Reserves Today. ($9B in 1992) 5,000
0
Japan
UK

00
04
08
12

20 6
20

20 4
28

20 2
36

20 0
20 4
48
1

4
4
2 © 2005 Nokia V1-Filename.ppt / yyyy-mm-dd / Initials 20
20
20
20
20

20

20

20
 Very Strong Subscriber Growth
Dramatic Upswing in last 12 months
Huge subscriber additions Reliance (G +C)
8000000

120000000 Monthly Net Additions, crossing 5m

7000000
Tata
100000000
Others 6000000

80000000 BPL 5000000

Escotel
60000000 4000000
Idea+Escotel
3000000
40000000 BSNL

Hutch 2000000
20000000
Bharti 10 0 0 0 0 0

0
0

Nov '04

Nov '05
Nov 03'

July '04

Jan '05

Jul '05

Jan '06
Jan 03'

July 03'

Jan 04'

May '04

Sep'04

May '05

Sep'05

May '06
May 03'

Sep 03'

Mar'05

March '06
Mar 03'

Mar 04'
- 10 0 0 0 0 0
July 2006 subs: 110.6m (GSM 82.4m, CDMA 28.2m)
Total GSM Total CDMA Total India
25000000
Bharti 24.3m Subs
Key Trends Mega Operators in the making
Hutch 19.7m Subs
Metros – Hutch leads 20000000
With 5,634,197 subs BSNL 19.0m Subs

Circle A – Bharti leads 15000000

Reliance (G 23.6m Subs
+ C)
With 8,464,371 subs
Idea

Circle B – BSNL leads Escotel

10000000
With 7,381,378 subs
BPL
Circle C – BSNL leads
With 2,792,913 subs 5000000 Others

Tata

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Jan 03'

Mar 03'

May 03'

July 03'

Sep 03'

Nov 03'

Jan 04'

Mar 04'

May '04

July '04

Sep'04

Nov '04

Jan '05

Mar '05

May '05

Jul '05

Sep'05

Nov '05

Jan '06

March '06

May '06
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Source: COAI
 India Telecom Growth Drivers
1997- 2004 : tariffs + regulations + major events

BSNL roll out

NTP 99 - Move to Introduction of CPP, of new lines
revenue share from CDMA service launch,
fixed license fee Tariff cuts in
Subs ‘000 Monsoon Hangama P9

50,000
0.37 Tariff: US$/min.
45,000 Launch of GSM
0.27 services by BSNL
40,000 and 4th GSM
0.18 operator
35,000
30,000
25,000
20,000 0.08
0.06
15,000
0.04
10,000 0.03
5,000 0.02
-
1997 1998 1999 2000 2001 2002 2003 2004

Net adds Total Subs GSM Subs

Source: COAI
National Telecom NTP 99 Unified
Policy 1994 announced Licensing

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Nokia India – Nokia Everywhere !
Number 1 Vendor - Overall, Handsets and now Networks

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Highest
5
Ranked
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MNC
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 Nokia India – many diverse activities

Mobile Phones Multimedia

Customer Research,
& Market Technology Corporate Venturing Manufac
Operations Platforms Functions & BI -turing

Enterprise
Solutions Networks

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Nokia India - A History of Innovation in India

¾ 1995: India’s first mobile call made from a Nokia handset on a Nokia supplied Network

¾ 1998: Saare Jahaan Se Acchha, first Indian ringtone in a Nokia 5110

¾ 2000: First Hindi UI (menu) in a Nokia 3210

¾ 2002: First Hindi text input in a Nokia 3610

¾ 2003: First Made for India phone, Nokia 1100

¾ 2004: Saral Mobile Sandesh, Hindi SMS on a wide range of Nokia phones

¾ 2005: First handset with a talking alarm clock in 5 regional languages, Nokia 1110 & 1600

¾ 2005: First telecom company to manufacture both handsets and Networks equipment in India

¾ 2006: Nokia Moves managed services hub to India – GNSC centre in Chennai becomes operational

¾ 2006: Nokia becomes the #1 supplier of handsets AND Networks in India, according to Voice & Data
magazine, July 2006.
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 Nokia India – Telecom SEZ
Nokia Telecom SEZ

• 210 acres in Sri Perumbudur

• 9 key suppliers will be housed within the SEZ by end of 2007
• The Nokia Telecom Park strengthens Nokia’s delivery capabilities and customer
satisfaction
• Business park infra and services need to meet global standards
• Requires 24/7 custom clearance
• Nokia has been the engine of the investment train in Chennai’s
manufacturing corridor

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Imperitives for Continued Growth
• Promote international standards by harmonizing spectrum allocation with ITU

• Incentive for shared infrastructure, specially to promote rural growth

• Reduce customs duty on imported telecommunication and related equipment for implementing
‘affordable services’. Review The proposed countervailing duty 16.32% on cellular mobile
phones w.e.f. 1 Jan, 2007 and similar taxations on mobile phone spare parts/accessories to
prevent increase in price of mobile phones,

• Have a consistent policy for duty on all components imported into India for use in producing
mobile phones within Special Economic Zone (SEZ) or in a DTA and spare parts imported into
India for servicing of phones

• Flexibility in labor law

• Enhance physical infrastructure

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 Thank You

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