New Entrants In Indian Telecom Industry_final [compatibility Mode]

New Entrants In Indian Telecom Industry CDMA,GSM,3G & IPTV By-

Viral Soni M.Tech Construction & Project Management CEPT University Ahmedabad

It all started like this y First telephone (photophone) – Alexander Bell, 1880 y The first car mounted radio

telephone – 1921

Going further y 1946 – First commercial mobile radio-telephone service by

Bell and AT&T in Saint Louis, USA. Half duplex(PTT) y 1973 – First handheld cellular phone – Motorola. y First F cellular ll l net Bahrein 1978

But what’s cellular? MSC

BS

PSTN

HLR, VLR, AC, EIR

Cellular principles y Frequency reuse – same frequency in

many cell sites y Cellular expansion – easy to add new cells y Handover – moving between cells y Roaming between networks

INDIAN MARKET

Indian Market y Total Number of telephones y 281.62 million at the end of January 2008. y Current addition: 8 million lines per month month, perhaps the

highest in the world

y Target 2010: 500 million connections y Broadband Subscribers y March 31, 2005: 0.18 million y December, D b 2007: 2007 3.02 3 02 million illi

Public vs. Private

I di Telecom Indian T l G Growth th - Mobile M bil D Driven i 300

Subscribers s (Mio)

250 200 150 100 50 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008* Financial Year Wireline

Wireless

Wireline subscribers have been steady y at around 40 Mio for the p past 3 y years Growth in Fixed line attributed to fixed wireless growth

H lth competition Healthy titi in i Handset H d t market k t

Large number of Handset OEMs with lack of dominant market share helps create a competitive market place

Affordable wireless services

R id wireless Rapid i l subscribers b ib ramp-up

O 61 Mn Over M net wireless l subscribers b b added dd d since competition ffrom CDMA was introduced d d

New Entrants Vs. Existing Players y BSNL y Existing Incumbent y Loss of 8% market share p.a. y Still the Largest y To promote tele-density y Promote competition y Benefits of Technology Must Reach the Last Man in the Last Village y Teledensity covers only 1/4th of the Population, hence 3/4th of the

Market untapped y New N entrants tr t would ld deviate d i t from fr th t model that d l and d provide pr id competition p titi y Existing players left to themselves would skim the market from top to bottom y would be a time consuming g process. p y Inclusion

Regulatory Framework Supreme Court

TDSAT

DoT

TRAI

Ministry of I & B

Security Issues y Telecommunications & Media sector - Traditionally considered to be Sensitive Sectors y Securing S i Sensitive S iti D Data t communications i ti y Blackberry Case y Hostingg vs. Routingg

y India prefers Hosting

Spectrum Issues y Allocation of Spectrum- Conflict between

New Players and

Existing Incumbents - Government has started allocating spectrum to new players - Spectrum Allocated to Defense, Railways, ONGC, BSNL and other h Government Departments; y acquisitions- Major Players acquiring smaller networks for Spectrum (but 3 year lock-in lock in for new entrants to discourage arbitrage impedes consolidation) y 3 G Spectrump Bone off contention between GSM & CDMA operators

GENERATIONS IN TELECOM INDUSTRY

Generation 1 y Generation #1 – Analog [routines for sending voice] y All systems are incompatible y No international roaming y Little capacity – cannot accommodate masses of subscribers

Generation 2 y Generation #2 – digital g [voice encoding] g y Increased capacity y More security y Compatibility y Can C use TDMA or CDMA for f increasing i i

capacity

Generation 2.5 25 y Generation #2.5 – packet-switching y Connection to the internet is paid by packets and not by

connection time. y Connection to internet is cheaper and faster [up to 56KBps] y The service name is GPRS – General Packet Radio Services

Th ffuture The t is i now.. Generation G ti #3 y Permanent web connection at 2Mbps y Internet, Internet phone and media: 3 in 1 y The standard based on GSM is called UMTS. Not

yett implemented. i l t d y The EDGE standard is the development of GSM towards d 3G. 3G

Migration To 3G

3G

2.75G Intermediate Multimedia

2.5G

Multimedia

Packet Data

2G Digital Voice

1G Analog Voice

GPRS

GSM

EDGE

W-CDMA (UMTS)

384 Kbps

Up to 2 Mbps

115 Kbps

NMT

9.6 Kbps

GSM/ GPRS

TD-SCDMA

(Overlay) 115 Kbps

2 Mbps? p

TDMA TACS

9.6 Kbps

iDEN 9.6 Kbps

iDEN PDC

(Overlay)

9.6 Kbps

AMPS

CDMA 1xRTT CDMA 14.4 Kbps / 64 Kbps

PHS

1984 - 1996+

1992 - 2000+

cdma2000 1X-EV-DV

PHS (IP-Based)

144 Kbps

64 Kbps

2001+

2003+

Over 2.4 Mbps

2003 - 2004+ Source: U.S. Bancorp Piper Jaffray

Upgrade Cost, By Technology 2G

GSM

CDMA

TDMA

Software/Hardware

GPRS Software-based

CDMA 1x Hardware-based

GSM/GPRS/EDGE Hardware and software

Cost

Incremental

Substantial

Middle of the road

3G

W-CDMA

cdma2000

W-CDMA

SSoftware/Hardware f /H d Cost

Hardware-based H d b d Substantial

SSoftware-based f b d Incremental

Hardware-based H d b d Middle of the road

2.5G / 2.75G

y CDMA upgrade to 2.75G is expensive; to 3G is cheap y GSM upgrade to 2.5G is cheap; to 3G is expensive y TDMA upgrade to 2.5G/3G is complex y Takeaway: y AT&T and Cingular g have a difficult road to 3G

TDMA…

TDMA y Time Division Multiple Access y Each channel is divided into timeslots, each

conversation uses one timeslot. y Many conversations are multiplexed into a single channel. channel y Used in GSM

CDMA…

CDMA y Code Division Multiple Access y All users share the same frequency all the time! y To pick out the signal of specific user, user this signal is

modulated with a unique code sequence.

2.Cdma (code division multiple access ) y One of the basic concepts in data communication is the idea of allowing several transmitters to send information simultaneously over a single communication co u cat o cchannel. a e. y This allows several users to share a bandwidth of frequencies. y This concept is called multiplexing. y Cdma employs spread-spectrum technology and a special coding scheme (where each transmitter is assigned a code) to allow multiple users to be multiplexed p over the same physical p y channel

Why CDMA ? •

Better voice clarity & consistent quality

•

Enhanced privacy p y

•

Superior power control • Lowest radiation level • Increased talk time for mobile phones

•

High Speed Data • High speed Internet access

• India has less than 0.4% PC penetration (residential) • CDMA 1x 1 handsets h d with i h 140 kbps kb speedd offers ff a superior i alternative l i ffor e-mailil andd IInternet access • Advanced platform for building highly innovative applications

•

Most successful 3G technology • CDMA2000 controls 85% of the World’s 3G market and adds 15 million new users per

quarter Worldwide

• Even the GSM 3G evolution relies on Intellectual property created by CDMA!

CDMA Today •

Operational in the country with 43 private networks

•

Has more than 21 million subscribers in the country

•

Created new markets for mobile services

•

Over 1 Mn PCOs operational

•

More than 285 Mn subscribers, subscribers 130 operators and 210 networks Worldwide

•

India is emerging g g as the keyy driver of growth g for CDMA

•

CDMA created a competitive landscape that made wireless affordable

GSM

GSM y « Groupe p Special p Mobile »,, later changed g to

« Global System for Mobile »

y Joint European effort beginning in 1982 y Focus on seamless roaming across Europe

y Services launched 1991

y Time division multiple access (8 users per 200KHz) y 900 MHz MH band; b d later l t extended t d d tto 1800MHz 1800MH y Added 1900 MHz (US PCS bands)

y GSM is dominant world standard today

y Well defined interfaces; many competitors y Network effect (Metcalfe’s law) took hold in late 1990s y Tri-band GSM p phone can roam the world todayy

Gsm (global system for mobile communication) y y y y

The most popular standard for mobile phones in the world. Its promoter, the gsm association, estimates that 82% of the global mobile bil market k t uses this thi standard. t d d Gsm is used by over 2 billion people across more than 212 countries Is considered a second generation (2g) mobile phone system.

3G….

3G – What is it? y 3G is a term coined by global cellular community to indicate the next generation of

mobile service capabilities (Higher capacity / Enhanced network Functionalities) that allow advanced services and applications, including multimedia – ITU

y some key requirements of 3G service include y Improved system capacity y Backward compatibility with 2G systems y Multi media support and y High speed packet data services meeting the following criteria y 2 mbps in fixed or in building environments y 384 kbps in pedestrian or urban environments y 144 kbps in wide area mobile environments y Variable data base in large geographic area systems (satellite)

3g technology y The technology intended for smartphones- multimedia cellphones y IT PROVIDE 3mbps SPEED FOR DOWNLOADING WHICH IS VERY y y y y

HIGH AS COMPARED TO THAT OF 2G TECHNOLOGY It provide intrenet surfing, surfing downloading,audio downloading audio video conferencing conferencing, fax service and many other broad band applications 3g technology was implemented in japan for the first time in the world Today the tech. Is serving 25 countries over more than 60 networks in asia, europe and u.S. Bsnl india will launch 3gg tech from dec.2008 in india

3G Vision y Universal global roaming y Multimedia (voice, data & video) y Increased data rates y 384 kbps while moving y 2 Mbps when stationary at specific locations

y Increased capacity (more spectrally efficient) y IP architecture y Problems y No killer application for wireless data as yet y Vendor-driven

3G technology – a large opportunity for I di India

Biggest Threat to Today’s 3G — Wi l Wireless LAN LANs y Faster than 3G y 11 or 56 Mb Mbps vs. <2 Mbps Mb ffor 3G when h stationary t ti

y Data experience matches the Internet y With the added convenience of mobile y Same user interface f (doesn’t d ’ rely l on smallll screens) y Same programs, files, applications, Websites.

y Low cost, low barriers to entry y Organizations can build own networks y Like the Internet, will grow virally

y Opportunity pp y for entrepreneurs! p y Opportunity for wireless operators?

IPTV

Regulatory Challenges in IPTV Services S i y Unclear Policy Framework y Nature of Service not clear y Existing

legislation

not

sufficient y Clarity on down linking guidelines id li y Content regulation y FDI Capp Non Level Playing y g field

TRAI Recommendations To solve the regulatory issues concerning IPTV Services TRAI has recommended the following to DOT & I&B Ministry 1)

Telecom Operators p to pprovide IPTV services under UASL License

2)

Telecom licensees while providing TV channels through IPTV shall transmit only such channels in exactly same form (unaltered) for which broadcasters have received uplinking/down linking permission from Government of India linking/down-linking (Ministry of Information and Broadcasting)

TRAI Recommendations (Contd.) (Contd ) 3)The up linking/down linking guidelines should be amended to enable the broadcasters to provide signals to all distributors of TV channels 4)Telecom l service providers d providing d IPTV service not to produce any news content and to show only those news channels which have permission from I & B Ministry

FUTURE PROSPECT OF TELECOM SECTOR India poised to be a USD 40 bn - 45 bn telecom market by FY 2010 Telecom sector targets announced by Government of India

• • • •

250 million subscribers in 2007 500 million subscribers by 2010 20 million broadband subscribers by 2010 Mobile access to all villages with population more than 5,000 by 2006

• Mobile access to all villages with population of more than 1,000 by 2007

Opportunities in Telecom Sector y Telecom Infrastructure Services y Favourable Investment Climate y Total No. of Subscribers – Increase y Yield per Subscriber from traditional streams may decrease due to higher

competition, new entrants y Still ll higher h h T Tariff ff Margins then h any where h in the h world ld y Possibility: y 3G Services – 2009 y 4G Services – 2011

y Value Added Services – 15% of yield y Caller Tunes, Ring Back Service y Less Skimming y All small and medium players – growth opportunity for international player

THANK YOU Resented by -Mohini Ghanwat (0207) -Bimal Shah (1307) ( ) -Ankur Sharma (1407) -Viral Soni (1507)

y EDGE-Enhanced Data rates for Global Evolution y Packet Data Serving Node (PDSN)

y HSDPA (High Speed Downlink Packet Access