Developer say “App”, Consumer says

“Experience”

R.N.Prabhakar

27th March, 2010

Agenda

Telecom Scenario in India Technological Developments Impact of Telecom on Society Need for Mobile Applications Market for Applications Marketing of Applications Conclusion

Telecom Scenario in India

Telecom Scenario in India The world has witnessed rapid growth and

technology changes in Telecom India has also experienced very fast growth in this

sector Annual compounded growth of 45% over last three years

10-15 years back the network was service specific Separate services for voice, data & video

Technological developments have enabled seamless integration of voice, data, and video

Telecom Scenario in India (2)

Growth is primarily in mobile subscribers This growth is mainly in voice segment Contribution of Value Added Services (VAS)

towards operators revenue is about 10% Primarily in SMS, Ring Tones, Caller Tunes

Telecom Scenario in India (Users Statistics)

Various Statistics as on 31.01.10

Total Telephone Subscribers 581.81 mil

Wireline

Wireless

36.76 mil

545.05 mil

Internet Users (Sept 09) 14.62 mil

Broadband Users 8.03 mil

Teledensity (telephones/100 population)

Total 49.50

Urban 105.84

Rural 19.09

Telecom Scenario in India (Revenue)

Revenue Statistics (in Rs. Crores)

Gross Revenue (2008-09)

Half Yearly (2009-10)

152360

77963

Adjusted Gross Revenue (2008-09)

Half Yearly (2009-10)

113013

58848

License Fee (2008-09)

Half Yearly (2009-10)

9601

4957

Spectrum Charge(2008-09)

Half Yearly (2009-10)

3178

1731

Technological Developments

Technological Developments Existing networks are mainly voice and low speed data

2G/2.5G Developments are towards voice and high speed data

IP, NGN, 3G, LTE, Wi-Max, 4G These have enabled convergence of networks and services

High speed transmission of information via broadband and dedicated leased circuits

Developments in IT field has provided integration of various facilities

Impact of Telecom on Society

Impact of Telecom on the Society Mobile telephone is an ubiquitous tool of today It has transformed the life of people in various aspects

Personal communication Commercial communication Life style of high mobility and connectivity

An important and inevitable foundation for sustainable economic growth for any nation in the world

There is need to install new technologies in India To give digital experience at different levels of affordability to

Indian population Offer options required to generate value for them

Need for Mobile Applications

Need for Mobile Applications

Basic voice service revenue is decreasing Customers can afford additional facilities within their

budget Penetration of telecom in rural areas is increasing

In India by 2012 it is projected that more than 50% growth in users will be in rural markets

Rural masses require VAS to generate value for money spent by them on telephone facility

Need for Mobile Applications (2)

The ARPU (average revenue per user) is reducing for service providers

They need to increase the revenue through VAS Basic VAS (SMS & mobile music) contributes about

10% to the current total revenue of service providers This is not a sufficient revenue model

There is need to develop advanced VAS to trigger growth in revenue

Need for Mobile Applications (3) Handsets are coming with lot of advanced features

e.g. Color+touch screens Polyphonic tones GPRS connectivity

Prices of handsets are falling Smart phones with larger screens, greater

processing power and real or virtual keyboards are becoming popular Estimated that they will account for 30% of the global

handset market by 2012

Need for Mobile Applications (4)

Thus there is need to develop advanced VAS e.g. video portals and video ring back tones location based services mobile advertising near field communication mobile internet social networks remote access network

Telecom technologies, IT developments & handsets are capable of handling various types of advanced VAS

Need for Mobile Applications (5)

Security of the network is vital. Must guard against unauthorized access malicious and unsolicited content delivery network disruption

Must provide comfort level to customers regarding security and confidentiality of transactions and information

Market for Applications

Market for Applications The requirement of applications are dependent upon the

customers profile Education Nature of job Age and gender Type of city

Busy business executives, educated urban customers may need information and commerce related VAS more than entertainment

Rural middle aged population may need VAS related to agriculture, market information, health and e-governance

Rural young population may need more information related to education

Market for Applications (2) Entertainment related VAS may be required by

almost all strata of population with varying degree of expenditure

Thus the demand for VAS is huge but identification of need of various segments of population is a challenge

Technology is capable of providing large variety of information/ commerce/ entertainment services, through mobile telephone & broadband network, which a person at present avails by physically going to the facility provider

Marketing of Applications

Marketing of Applications

VAS value chain comprises of content owners, service providers, technology enablers/content aggregators, handset manufacturers

The marketing strategy varies from country to country

In some developed countries it is done by content developers for basic handsets

For smartphones it is led by device manufacturers through application stores

Marketing of Applications (2) In India VAS is mainly promoted by telecom service providers for

both basic and smartphones Majority of customers use basic handsets and prefer converting

them into smartphone by application download The VAS industry is at a very nascent stage

It may take time to develop a successful business model In the current scenario service providers and VAS developers

need to have mutual understanding for delivering these services for the synergetic growth

Marketing of Applications (3)

Indian market is highly price sensitive There is large diversity in customers

Large population lives in rural areas Several regional languages Variegated education level amongst States

TRAI has issued various guidelines for providing VAS Explicit consent is a vital aspect

There is need to develop content in regional languages

Marketing of Applications (4)

Multilingual handsets are being developed There is need to develop VAS on voice prompt

concept as well Education of existing & prospective customers is an

important requirement for popularizing VAS Provide innovative contents and exciting offerings to

customers Also assure customers about reliability, quality and

consistent delivery of the product

Conclusion

Conclusion

Auction of spectrum for 3G/ BWA is scheduled for 9th April, 2010

This will open the field for delivering advanced applications

Potential for such applications is huge There is definite need for innovation in VAS The marketing model of VAS will depend upon the

type of application and market conditions

Conclusion (2)

Customer pull concept will give better revenue instead of customer push concept Hybrid concept is also possible

Various stakeholders in the VAS ecosystem have to work in tight cooperation for the delivering applications that will attract customer interest

Thank You

R.N.PrabhakarEx Member TRAIMob: +91 9868126363Tel: +91 120 4295666Email: ravi@prabhakars.org rnprabhakar1946@yahoo.co.in