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 DDriven
i
300

250
s (Mio)

200
Subscribers

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 ini 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 addeddd 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 Spectrum-
p 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
towardsd 3G.
3G
Migration To 3G 2.75G
Intermediate
3G
Multimedia

2.5G Multimedia

2G Packet Data
1G Digital Voice
Analog Voice
GPRS W-CDMA
GSM
EDGE (UMTS)
115 Kbps
NMT 9.6 Kbps 384 Kbps Up to 2 Mbps

GSM/
TD-SCDMA
TDMA GPRS
(Overlay)
TACS 2 Mbps?
p
115 Kbps
9.6 Kbps

iDEN iDEN
9.6 Kbps PDC (Overlay)
9.6 Kbps
AMPS CDMA 1xRTT cdma2000
CDMA 1X-EV-DV

14.4 Kbps
PHS
(IP-Based) 144 Kbps Over 2.4 Mbps
/ 64 Kbps
PHS 64 Kbps
2003 - 2004+
2003+
2001+ Source: U.S. Bancorp Piper Jaffray
1992 - 2000+
1984 - 1996+
 Upgrade Cost, By Technology
2G GSM CDMA TDMA

2.5G / 2.75G GPRS CDMA 1x GSM/GPRS/EDGE

Software/Hardware Software-based Hardware-based Hardware and software
Cost Incremental Substantial Middle of the road

3G W-CDMA cdma2000 W-CDMA

SSoftware/Hardware
f /H d Hardware-based
H d b d SSoftware-based
f b d Hardware-based
H d b d
Cost Substantial Incremental Middle of the road

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 1x1 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 The most popular standard for mobile phones in the world.

y Its promoter, the gsm association, estimates that 82% of the global
mobile
bil market
k t uses this
thi standard.
t d d
y Gsm is used by over 2 billion people across more than 212
countries
y 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
HIGH AS COMPARED TO THAT OF 2G TECHNOLOGY
y It provide intrenet surfing,
surfing downloading,audio
downloading audio video conferencing
conferencing, fax
service and many other broad band applications
y 3g technology was implemented in japan for the first time in the world
y Today the tech. Is serving 25 countries over more than 60 networks in
asia, europe and u.S.
y 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 Cap- p 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 up-
linking/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