TELECOM SYSTEM MANAGEMENT OF SYESTEM BUSINESS BY: Vijay singh: Balaji institute of telecom & management,Pune (2008-10) PRESENTATION INTEGRATOR’S

TELECOM AS A FACILITATING INFRASTRUCTURE FOR ECONOMIC DEVELOPMENT OF COUNTRY

Introduction to Indian Telecom Industry
• • • • • • • • • • The Indian Telecom sector is third largest network in the world. Subscribers base is around 442 million. Average growth rate of over 48% in respect of subscribers. Monthly additions of above 11.7 million phones. Growth impetus from wireless segment with 84% wireless and 16% wired. Overall teledensity at 37.94%. Rural teledensity stands at 7%, while the urban at 57%. Further access is provided by 54 lakh PCOs and 5 lakh VPTs. Broadband subscribers crosses 6.28 million . More than a thousand cities have been provided with broadband connectivity out a total of five thousand cities

Source = Telecom News, Value notes (08-09)

Indian Telecom Industry – A Lucrative Option

Indian Telecom Industry – Facts

 One of the fastest growing cellular markets in the world in terms of number of subscriber additions – 442 million (April 2009)  Expected to reach total subscriber base of about 500 million by 2010 (i.e., more than one phone for every household)  Annual growth rate of the telecom subscribers – 48 percent (2008-09 )  More GSM subscribers than fixed-line subscribers

 Total Fixed line User base is 37.81 million .  Tele density – 37.94% (April 2009)  ARPU for GSM – Rs 220  For CDMA-Rs111  Telecom equipment market – USD 34,100 million (2007– 08)  Handset market – USD 7,250 million (2007–08)

• Data Source = TRAI 2008 Report

Telephony services (mobile and basic) and Internet services dominate the Indian telecom services
-The Indian telecom market generated revenues of approx. USD 32 billion in 2007–08. - Registered a CAGR of approx. 32 percent from 2002–03 to 2007–08. -The CAGR from 2008–08 to 2011–12 is expected to stabilise at 21 percent. Revenues of Indian Telecom Industry: 2002–08 (USD billion)

Basices c Servi
o di g Raagin P

Mobile Services In te rn e

t

G MP C S

VSATs

The Indian telecom services can be divided predominantly into basic, mobile and Internet services . It also comprises smaller segments :-Radio paging services, -Very Small Aperture Terminals (VSATs) -Public Mobile Radio Trunked Services (PMRTS) -Global Mobile Personal Communications by Satellite (GMPCS).

PM

RT S

Telecom Services – India

Number of mobile subscriber will propel the total subscriber base to 500 million by 2010
Telecom Subscriber Base and Teledensity in India (2002-2009)

* In terms of Subscriber Base
** Includes GSM, CDMA and WLL-F services

Market Share Of GSM Subscriber (April 09)

Source-voice & data

CDMA subscriber base-(2009)

Reliance Communications and TTSL dominates the Indian CDMA mobile services segment.

Source = Telecom India online.

Source-voice & data

Broadband services to drive Internet penetration in India
Internet Subscribers: 1998–2008

BSNL and MTNL caters to more than two-thirds of Internet subscribers in India.

The telecom market will experience high penetration of Internet services with the support from government policies .
Source=IT Sector News (07-08)

Indian telecom handset market booming along with mobile services industry
Market Share of GSM and CDMA Handset Manufacturers: 2006–07
USD Million

Mobile Handsets Market in India: 2004–07
5 ,0 0 0 4 ,0 0 0 3 ,0 0 0 2 ,0 0 0 1 ,0 0 0 0 2003–04 2004–05 2005–06 2006–07 1 ,6 1 0 1 ,9 6 6 3 ,2 3 1 4 ,7 5 0

Haier 1% ZTE 4% Sams ung 6%

Huaw ei 1%

Others 7%

Sony Eric s son 6% LG 11% Motorola 11%

Nokia 53%

Overall, Nokia has a market share of 53 percent; it dominates the GSM mobile handsets with a market share of approximately 73 percent. LG dominates in the CDMA handsets market with a market share of 60 percent.
Source= Telecom India Online. (06-07)

Growth in India
GDP Growth Forex FII Flow FDI Per Capita Inflation

1990

5.8 per cent

< US$ 1 billion

US$ 1 million (1993)

US$ 97 million3 US$ 390

9 per cent

2008

7.7 per cent

US$ 254.75 billion US$ 4.7 billion as on January 9, (August 2008) 2009

US$ 18.7 billion US$ 740 (April–October 2008–09)

5.24 per cent as on January 3, 2009

India's Forex Reserves: 2001–08 350 300 250 US$ Billion 200 150 100 50 0
2001–02 2002–03 2003–04 2004–05 2005–06 2006–07 2007–08 Jan-09

310 255 199 141 112 54 75 152

In 2007–08, forex reserves grew by approximately 56 per cent over 2006–07. They were recorded at more than US$ 254.75 billion in the third quarter of 2008– 09.1 Source-voice & data

Number of Deals and Value
80 70 US$ Billion 60 50 40 30 20 10 0 2004 2005 2006 Deal V alue 2007 2008 No. of Deals
306 467

1,000
766

782

800 600 400 200 0

41.54 28.2

12.3

18.3

 The IT & ITeS sector witnessed maximum M&As (102).  By value, the telecom sector leads the pack with M&As worth US$ 5,783.95 million. Source-voice & data

Number of deals

70

1,081

1,200

Recent Deals……
• • Norway-based telecom operator Telenor has bought a 60 per cent stake in Unitech Wireless (Videocon subsidiary ) for US$ 1.23 billion. Japanese telecom major NTT DoCoMo has acquired a 27.31 per cent equity capital of Tata Teleservices for about US$ 2.6 billion and a 20.25 per cent stake in Tata Teleservices (Maharashtra) Ltd for about US$ 190.23 million. Singapore Telecommunications (SingTel), which has a 31 per cent stake in Bharti Airtel has received the government’s approval to offer long distance services in India . Mauritius-based P5 Asia Holding Investments (Mauritius) Ltd will be investing around US$ 545.13 million to hold a 20 per cent stake in Aditya Birla Telecom Ltd (ABTL). Bharat Sanchar Nigam Ltd (BSNL) is planning an investment of around US$ 201.5 million in the Tamil Nadu Circle for an additional 23 lakh mobile connections under both 2G and 3G technologies by 2009.

Contd…
• • Etisalat, a Gulf-based telecommunications company has picked up a 45 per cent stake in Swan Telecom. Juniper Networks, second-largest maker of networking equipment, plans to invest US$ 400 million in India, over the next five years, with a focus on its research and development (R&D) activity. BSNL, India's leading telecom company in revenue terms, will put in about US$ 1.16 billion in its WiMax project.

Drivers of Growth
Changing demographics  44% population < 19 years; 75% literate  Working population to grow from 485 mn to 615 mn by 2010  21 mn professionals and 90 mn graduates/ post graduates by 2010  500 mn consuming class by 2007  Unified licence provides unprecedented flexibility to operators in optimising costs and services by leveraging technology and economies of scale

Government Policies

Low Entry Barrier

 Drop in the handset prices … lowering the entry barrier… Lowering Tariffs… Increasing affordability

India: Demographic Dividend
45 36 Years 27 18 9 0 India China US Russia Japan 25 34 37 38 44

Population Median Age (in years): 2008E1

Young population (under 25 years) accounts for about 50 per cent of India’s total population. accounted for 29 per cent of the total population in 2007 and is the secondlargest in the world. It is projected to reach 37.8 per cent by 2025.
Growth in Working Age Population (15–64 years) by 2010 (in million)

 The country’s urban population

 India is expected to register the

Stock Position 2005 World India Africa China South East Asia Latin America Southern Asia US Europe Japan 4,16 8 69 1 50 0 93 4 36 2 35 9 13 2 20 0 49 7 8 5

Additions to Working Age Population by 2010
314 71 64 44 33 31 17 10 0 -3 -5 45 95 145 195 245 295 345

largest addition to the working age population in the world by 2010.
 The country is expected to be

powered by the largest working age population worldwide by 2050.
 Its labour costs, as a percentage
Sources: one of value added, are 1. CIA of the 2. International Herald lowest among Asian countries.4 Tribune 3. United Nations Statistics 4. India Brand Equity Foundation

In million

Ideal Destination for Investment
• 100 per cent foreign direct investment (FDI) is permitted through the automatic route in telecom equipment manufacturing. • FDI ceiling in telecom services has been raised to 74 per cent. • Introduction of a unified access licensing regime for telecom services on a pan-India basis.

Contd…
• The government is implementing a program of connecting 66,822 uncovered villages under the Bharat Nirman programme. • The government will invest US$ 2 billion to set up 1.12 lakh community service centres in rural India to provide broadband connectivity in 2008-09. • The Finance Ministry has declared a five-fold (from US$ 100 million to US$ 500 million) increase in the external commercial borrowings amount, which companies involved in infrastructure sectors can borrow from overseas to spend in India.

Investments Abroad
• The Bharti Group, launched its mobile services in Sri Lanka under 'Airtel' brand on January 12, 2009. • Airtel is expected to invest about US$ 200 million in setting up and expanding its operation in Sri Lanka over the next five years. • Tata Communications has bought the 30 per cent stake in Neotel that was previously held by Eskom and Transnet. • With this, Tata Communications in association with Tata Africa Holdings became the largest stakeholder with 56 per cent stake.

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Facts about Indian Telecom Sector
• Indian telecom sector is almost unaffected by this adverse global trend. • Its contribution to the nation's GDP is expected to increase from 2% in 2006 to an estimated 3.6% in 2010. • Growth rate for Reliance in January 2009 at 8.1%, followed by Idea at 5.4%, Aircel at 4.3%, Vodafone and Spice Telecom at 4% each and Bharti at 3.2%. • India states that India has a teledensity of 34.5% as of January 2009, up from 33.2% in December last year at 4% each and Bharti at 3.2%.

Continued…….
• Gartner estimates the Indian mobile market will expand to 737 million subscribers by 2012. • The companies now pay the government 10, 8 and 6 per cent, depending on the markets they operate in. • By 2009 Fixed line and mobile revenues in India will hit US$10.5 billion and US$23.4 billion, respectively. Capital expenditure (capex) is estimated at US$2.2 billion & US$6.5 billion.

Continued…….
• India's mobile subscriber base is expected to grow at a compound annual growth rate (CAGR) of 18.3 percent, from 2007 to 2013, reaching a penetration rate of 53.4 percent by end-2013. • The government will also invest US$2 billion, from 2008 to 2009, to set up some 100,000 community service centers in rural India to provide broadband connectivity. • Currently, MVAS in India accounts for 10 per cent of the operator's revenue, which is expected to reach 18 per cent by 2010.

Continued…….
• By 2012, fixed line revenues will reach US$12.2 billion and mobile revenues will hit US$39.8 billion. Fixed line capex is expected to be US$3.2 billion, while mobile capex will be US$9.4 billion. • With the tele-density in rural areas at less than 10 percent against the national average of about 21 percent, there seems to be huge untapped potential for mobile phone penetration in rural India. • Mobile phone production is estimated to grow at a CAGR of 28.3 per cent from 2006 to 2011, totaling 107 million handsets by 2010.

Continued…….
• Revenues are estimated to grow at a CAGR of 26.6 per cent from 2006 to 2011, touching US$ 13.6 billion. • 100 per cent foreign direct investment (FDI) is permitted through the automatic route in telecom equipment manufacturing. • BPO for telecom is also a huge job creator, employing over 1,22,440 people in BPO firms in 2008 — a number that is set to more than double to 2,94,444 in 2012.

BUSINESS OF SYSTEM INTEGRATOR’S

Contents Contents
• • • • • What means system integration. Why SI Required. How SI implemented. Players in SI field. Presence Asia/Pacific(India).

WHAT IS SYSTEM INTEGRATOR WHAT IS SYSTEM INTEGRATOR • A systems integrator is a person or company that specializes in bringing together component subsystems into a whole and ensuring that those subsystems function together, a practice known as System Integration. • According to the Institute for Partner Education & Development, systems integrators traditionally realizes approximately 50 percent of revenue from consulting services and 40 percent of revenue from IT services in design, implementation and post-transaction consulting. They are different from an IT Consultant in that they also take title to product.

Why SI Required? Why SI Required?
• The market and competitive pressures within the Telecom industry have made time-to-market, offering differentiation and operational efficiency critical success factors. • SI by providing end-to-end solutions, solution integration & deployment and professional services over a wide range of solution areas.

Role of Role in SI in IT SI of IT
• In IT, system integrators integrate multiple systems for inputting, processing, interpreting, storing, and categorizing data. • For example, a systems integrator may build an IT solution integrating an Oracle-based inventory tracking system, a document management system, a Microsoft CRM system, a group of Panasonic scanners, and a Rimage storage system to produce an overall solution for the customer.

How SI Implemented??

How SI Implemented?

PLAYERS IN STSTEM INTEGRATION

PlayersSIin SI field Players in field
• • • • • • • • • • • • Accenture Atos Origin BearingPoint Booz Allen Hamilton Capgemini Cisco Systems CSC/CSA Deloitte Dimension Data/Datacraft EDS Ericsson Fujitsu

• • • • • • • • • • • • • • •

Continue..
GTL HP IBM Lockheed Martin LogicaCMG McKinsey & Company Mincom NCR NCS Oracle/PeopleSoft SAP Satyam Computer Services Sun Microsystems Tata Consultancy Services Unisys

Continue..

SI Market DNA Scan SI Market DNA

Scan

• The IT consulting and SI services markets within the Asia/Pacific region are valued at $12.8 billion. • The adoption rate of these services across markets in Asia/Pacific is vastly different. • The compound annual growth rate (CAGR) of 9.7 percent for 2005 through 2009. • Developing IT services markets such as India and China will see significantly higher CAGR than the regional average.

Market share segmentation in Asia/Pacific Market share segmentation in Asia/Pacific

Geographical Spread of ESP Consulting and SI Services Geographical Spread of ESP Consulting and SI ServicesRevenue in Revenue in Asia/Pacific Asia/Pacific

Vertical Spread of ESP Consulting and SI Asia/Pacific Vertical Spread of ESP Consulting and SI Services Revenue in Services Revenue in Asia/Pacific

SI’s - Offering
TCS (www.tcs.com)

SI’s - Offering
TCS provides a range of IT services, such as applicationdevelopment and maintenance, business process outsourcing,consulting services and IT infrastructure services.

Accenture (www.accenture.com)

Accenture is a well-established IT consulting provider in the region. The company has strong focus in consulting and SI services for gov, financial services, communications and utilities. Its strengths occur in customer relationship management, human performance, finance and performance management, strategy andsupply chain management

IBM (www.ibm.com)

IBM is a well-established full-service provider with strong strategic consulting services via its Business Consulting Services group. Its business transformation offering is building traction in the Asia/Pacific markets. IBM also has a broad set of IT consulting,application development and SI skills. HP provides consulting and SI services to a focused target market in manufacturing, network service provision, government and finance industries. Its Adaptive Enterprise transformational services is building traction in some Asia/Pacific markets

HP (www.hp.com)

Summary Service Offerings (Systems Integration and Summary of SIof SI Service Offerings (Systems Integration and Application Application Development Services) Development Services)

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