Karl J. Weaver Newport Technologies

Transcription

1 Karl J. Weaver Newport Technologies Web Site:

2 Afternoon Agenda The Global Smart Phone Revolution India: IT Super Tiger Global Smart Phone Revolution, India s Wireless Future, Mobile Operators, Subs penetration,wireless infrastructure, Mobile handsets and Smart Phones, Consumer market, rise of handset manufacutring,youth markets, CDMA s rise, Spectrum Row, IT Superpower?, The Pacific Century, Conclusion

3 The mobile device is already changing the basic way people in the USA, China and India communicate. The starting point of mobility is different in each country. Smart Phones and converged devices are being demanded as our global mobile society looks to integrate tasks, duties and wireless voice & data communications = The mobile Internet.

4

5 India s Wireless Future Indian Cellular Market to be $24 Billion by 2009; CAGR of 35.6%; Value Added Services to play a key role It could equal the USA cellular market of today (approx. 150 Million subscribers) within five years. ARPU is expected to be as low as $5 over the next 18 months but growth continues and Reliance & Bharti will lead the charge as consolidation of operators occurs. Non-voice value-added services such as ring tones, call-back tones, games, and music downloads will play a significant role as service differentiators and as an important revenue stream that will help to cushion the pressure on overall service revenues. India s wireless market is much more advanced than most Westerner might imagine. Indians sense that a cell phone is a must have 21st-Century tool!

6 Wireless Subscriber Breakdown by State Punjab 4,873,230 Source 2/28/06 COAI, AUSPI J&K 669,722 Himachal Pradish 653,977 Haryana 1,971,667 Delhi 7,565,013 Bihar 2,755,354 Rajasthan 3,511,383 U.P. (West) 3,727,908 U.P. (East) 4,588,519 Gujarat 5,802,583 Madhya Pradish 2,926,209 Assam 657,547 West Bengal & A&N 2,077,222 Northeast 290,097 Total India Subs. 84,275,921 GSM 65,188,550 CDMA 19,087,371 Maharahtra 6,109,948 Orissa 1,383,147 Kolkata 2,934,778 Mumbai 7,126,607 Andhra Pradish 6,472,947 Kamataka 5,844,619 Chennai 2,833,793 Kerata 4,116,434 Tamil Nadu 5,220,958

7 India s Leading Mobile Operators Aircel Digilink India Limited Aircel Limited Bharti Cellular Limited Haryana, Rajasthan, U.P. ( East) Chennai, Tamil Nadu Delhi (Metro), Mumbai (Metro), Kolkata (Metro), Chennai (Metro), Andhra Pradesh, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Karnataka, Kerala, Madhya Pradesh, Maharashtra & Goa, Orissa, Punjab, Rajasthan, Tamil Nadu, UP (West), UP (East), West Bengal BPL Cellular Limited Mumbai (Metro), Kerala, Maharashtra & Goa, Tamil Nadu Group Company Total Subscribers Bharti (GSM) BSNL(GSM) Hutch (GSM) Reliance (CDMA) IDEA (GSM) Tata (CDMA) Aircel (GSM) Spice (GSM) Reliance (GSM) MTNL (GSM) HFCL (CDMA) Shyam (CDMA) Hutch Group Mumbai, Delhi, Kolkata, Chennai, Gujarat, Andhra Pradesh, Karnataka,Punjab Idea Cellular Limited Andhra Pradesh, Maharashtra, Gujarat, Madhya Pradesh,Kerala, Haryana, U.P.(W), Madhya Pradesh Reliance Telecom Limited Spice Comm Ltd Assam, Bihar, Himachal Pradesh, Kolkata, Madhya Pradesh, North East, Orissa, West Bengal Karnataka,Punjab

8 India s Wireless Subscribers more than 4 million new users are entering the 85.4 million strong wireless sector each month. India is expected to be the world's third largest mobile market by the end of this year, behind China and the United States

9 IT Boom in Bangalore Fifth largest city in India and home to more than 6 million people. Touted as India s Silicon Valley welleducated population, wealth of high-tech companies, and it s world-renowned expertise in software engineering and information technology Home to more than 1,500 high-tech firms; produces $7 billion in software exports each years ( Newsweek article) It represents a wide range of industries, including business IT services, mobile and networking technology, biotechnology, nanotechnology, semiconductors, etc. Home to Infosys and Wipro, not to mention major investment coming from HP, Intel,

10 Cellular Infrastructure in India Dominated by Ericsson cellular infrastructure at this time In 2004, Nokia won a $275-million upgrade of Bharti s network Nokia manufacturing cell phones in India with a $100~150 million dollar investment, to eventually hire 2,000 people. Nokia owns at least 50% of the GSM market! LG Electronics India (LGEIL) has a new facility at Ranjangaon for the manufacture of GSM mobile phones. Others setting up handset manufacturing: Samsung, NEC, Panasonic Kyocera and Sony Ericsson Major Cellular/Telecom Investments in India: Ericsson Samsung Nokia LG Huawei ZTE Lucent Motorola Years Indian Wireless Base Station Forecast (2004~2009, In Thuosands) # of Base Stations GSM CDMA Source: June 04 In-Stat report Boom Times for India s Wireless markets

11 Handsets: CDMA vs. GSM Sales of GSM handsets accounted for 74 percent of total sales and CDMA phones made up the rest in Replacements cycles are 24~36 months, Nokia is the leading handset brand, with Samsung, Motorola, and LG just behind. Chinese Manufacturers Ningbo Bird, TCL and Kejian selling with low cost handsets Taiwanese Manufacturers BenQ and DBTel entered the market in late 2003 Top Brands in India 1.Nokia 2. Samsung 3.Reliance (OEM) 4.Sony- Ericcson. 5. LG Electronics Inc. and U.S. major Motorola Percent Indian handset Shipments Forecast 2004~2009 (In Thousands) 100% 80% 60% 40% 20% 0% Years WCDMA GSM CDMA Source: June 04 In-Stat report Boom Times for India s Wireless markets

12 Smart Phones have arrived in India Smart Phone in the Market Motorola MPx200, launched by Hutchison Essar Kyocera 7135, launched by Reliance Infocomm Qtek Taiwanese Smart Phone w/mp3 player w/1gb memory HP ipaq w/3.5 TFT screen and Windows Mobile Software Nokia 7610, Nokia 6670 and Nokia 6820, 9300 on GSM networks Bharti selling the Rim Blackberry - popular with corporate users: Wipro, Coca Cola, Unitech, KPMG Corporate s (PIM), for executives on the move, sales automation solutions, data entry functions and business-tobusiness/business-to-consumer applications are driving Smart Phone sales in India these days:

13 Youth drive India s Mobile Phone Revolution Youth under 25-years old are in the majority in India and mobile phone savvy It has become a status symbol Youth crowds are going in for: In fashion Now 1.multi-coloured screens and speaker phones are currently the most popular handset features 2. integrated digital cameras and multi-media messaging. 3. Screensavers and polyphonic ring tones 4. Entertainment features w/gaming, mp3 players, radio etc Out of date: Monotonic ring tones, Wallpapers. Some Service providers give Free SMS in prepaid services in some states UNDER 25 age group are using wireless applications more. Age group heads the list, followed by and age groups.

14 Talk is Cheap Literally Speaking In India Q: Where are the Value Added Services to be found in India s wireless market? A: Based on the principle of A-B-C = Astrology, Bollywood and Cricket Breakdown of Value Added Service Revenues in India (2004) Games, 3% MMS, 1% Other, 7% SMS Ringback Tones, 5% GPRS, 5% Voice Portal, 16% Operator Bharti Service Airtel Live SIM SMS, 63% Voice Portal GPRS Ringback Tones Games MMS Other Orange Reliance Idea Orange Alive R World Say IDEA Source: Tata Indicom, Pyramid Research The next wave of applications in India will center around delivering content via video clips

15 Indians Prefer Prepaid Cards Those between the ages of prefer prepaid to postpaid Those between the ages of prefer postpaid Those between the ages of have a 50/50 split The free prepaid talk-time options (in the Rs 1,500-Rs 4,000 range) will be bundled with multiple CDMA handset offers. Which means, all Infocomm prepaid customers will have to pay upfront the full price of the handset of their choice to activate their connections. Prepaid for Life! Now no validity period, offering subscribers lifetime validity on their subscriptions for an upfront payment of around Rs (US$22.68)

16 Cell Phones Made in India Samsung exports Made in India handsets to Dubai Samsung Electronics Co., Ltd, a leading provider of mobile phones and telecom systems today reinforced its commitment to make India the export hub. Company s Manesar plant in India, made first symbolic export of its Made in India mobile phones to Dubai, which because of its strong macroeconomics and demographic profile is the key telecom market of Middle East. LG inaugurates its first Wow LG Download Centre for North India in Delhi at Singh Enterprises, Janakpuri, where customers can download ringtones, wallpapers, games etc. Design Houses are in India as well India's Quasar to launch GSM handset February 2006 Siemens CF110 slide phone Nokia 9300i Samsung X200 (made in India) Siemens ME75 January 2006 LG P-7200 LG S-5200 LG S LG C2500 SonyEricsson Z300i

17 CDMA + WLL-M = $$ for Reliance! Reliance Infocomm is India s most interesting wireless player Pushing cellular service through a CDMA version of Wireless Local Loop Mobile (WLL-M). came from nearly no subscribers in 2003 to leader in the span of about one year. Stated goal is to make cell phone call as common as sending a postcard in India. One-cent-a-minute calling rate; lowest in the World. Reliance expects 15% wireless penetration by 2009 (150 Million subscribers) and expect to capture 60% of the market share at that time (90M subscribers) Currently 10 Million subscribers Expects to launch CDMA2000 1x RTT services soon. Mr. Mukesh D. Ambani Mr. Dhirubhai H. Ambani ( ),

18 India s Spectrum Row There is controversy raging between GSM & CDMA operators over allocation of 3G radio frequency in 1900MHz band. GSM operators say CDMA services using 1900MHz would create interference in their networks, but no equipment is available in other frequencies GSM operators oppose CDMA entry into 1900MHz band because that frequency is reserved for 3G internationally. Cellular operators are allowed to charge Rs 4 per minute. (Conversion Rate Rs 46.5 = US $1) With the introduction of WLL, basic operators will be able to provide services at just Rs 1.25 a minute, which is the tariff for a local call on fixed lines.

19 Is India an IT Superpower? India has been called an IT Superpower. An IT Superpower? With annual sales of 2 million computers about 1.5% of the world total? With software piracy levels exceeding 70%? Where is the domestic consumption? Where are the software products with a Made in India tag? Where are the visions for tomorrow s world from Indian tech leaders? No, IT Superpower India is not. However, India is a Global IT Services Provider. India needs to make its diversity work as it seeks to become the back-office to the world. India can make China a part of the Indian services orbit by leveraging its strengths in English, execution and relationships it has built up with global companies.

20 The China Dream will soon make way for the India shock! Ever since Japan's own "economic miracle" of the 1960s and 1970s, Asia's emerging economies have been pictured as "geese flying in formation." Tokyo used investment and technology transfers to coax neighboring economies to follow in its wake. So-called tiger economies like those of Hong Kong, Singapore, South Korea and Taiwan inherited Japan's sunset industries - first light manufacturing, and later steel, petrochemicals and shipbuilding. In turn, they handed obsolete technologies and labor intensive industries down the line to Indonesia, Malaysia and the Philippines. The pattern held until China, in the mid-1990s, broke from the flock. Inundated by a flood of foreign capital, much of it non-japanese in origin, China has since mastered a range of technologies simultaneously - creating sweatshops in Shenzhen, efficient high-tech manufacturing around Shanghai and a budding R&D industry around Beijing, all coexisting at once. Countries that thought they could patiently export their way up the technology ladder will now find China waiting for them at every step of the way. The Middle Kingdom has now taken centre stage and India is right behind it.

21 China is a competitor, but it is also an opportunity and a very big one at that for Indian companies No pyramid base can be bigger than the combined markets of India and China. Indian companies need to understand China better. They need to start setting up offices there - not just for liaison or for "demonstrating a China strategy", but for full-fledged business. It will mean learning the Chinese language and understanding the local culture. The two countries may seem similar But the reality of the past 50 years cannot be overlooked - China's communism and India's democracy are realities which need to be remembered as one considers the markets and attitudes of the people. Global Smart Phone Revolution will amplify and help bridge the communications revolution within India and China. Conclusion Bridging India and China