Notes: STATISTICS

(Graph: "REFINING INDIAN TELECOM")

This image is a hand-drawn graph based on an Ernst & Young / Business Standard report dated 08-03-2004, showing projections for the Indian mobile market.

Telcom Revenues: Rises from $9 Billion in 2002 to $25 Billion in 2007 (projected).
Subscriber Base Projection (E&Y): Rises from 30 Million in 2004 to 200 Million in 2007, and 250 Million in 2009.
Mobile-Market Subscriber Base Projection (CRISIL-RATING): Rises from 30 Million in 2004 to 100 Million in 2007.
The final projection is for a 20% Telecom Density in 2009.

(Newspaper Clipping: "India to be 2nd largest telecom market in 5 years: E&Y study")

This is a newspaper clipping from Business Standard on Monday 8 March 2004, Mumbai.

Redefining Indian Telecom findings

Indian telecom operators could earn almost three-fold jump in revenues—from $9 billion in 2002 to $25 billion in 2007, according to a study released by Ernst & Young.
The Indian telecom network will become the second largest in the world after China in five years.¹²
Teledensity would cross 20 per cent in the next five years.³⁴
Subscriber base to cross 20 crore mark by 2007.⁵⁶
Small operators with low economi⁷es of scale would not be viable due to the very high cost per minute.⁸
"Eventuall⁹y two or three large operators with pan-Indian operations will remain dominant," it said.
The report predicted that state-owned telecom majors, MTNL and BSNL, would eventually merge in the face of stiff competition from integrated private players.
The study also stated that operators would have to roll out their own network, as the long distance operators would lose relevance.

(Graph: "R!M SUBSCRIBER BASE PROJECTION")

This is a hand-drawn graph showing the subscriber base projection for RIM (Reliance India Mobile).

Quote: "We have registered healthy numbers for the service. Overall, we expect that we will grow by about two-and-a-half million subscribers each month over the next 30 months"

Source: Shri Mukesh Ambani (Sources: The Financial Express, Mar, 6, 2004).

Projection: Starting from 6 Millions subscribers in Mar 04, the base is projected to grow at 2.5 million subscribers/month over 30 MONTHS to reach 81 Millions by Sep 06.

(Newspaper Clipping: "Reliance picks up 5m handsets from LG")

This is a newspaper clipping from ET 06-03-04 (The Economic Times, March 6, 2004).

LG Electronics plans to shift a large part of its software development operations for cell phones to its subsidiary, LG Software Development, in Bangalore. This will be the biggest global software development centre for LG.
LG also has development centres in San Diego and China, though much smaller than those in India.
LG is also looking to expand its manufacturing capacity here.
Reliance Infocomm has picked up 5 million (5m) handsets from LG.
LG is the largest CDMA mobile handset manufacturer in the world globally.
LG Electronics commands a market share of 47% in the CDMA segment globally, with a market share of 23% in the overall mobile handset market.
In '03, LG became the fifth largest mobile handset manufacturer, displacing Sony Ericsson.
LG aims to dominate all platforms (CDMA, GSM, etc.) as the mobile handsets' increasingly being driven by innovation, features, and the ability to run multiple applications and stylish looks.

(Newspaper Clipping: "LG Completes Exporting 5-m Handsets For Reliance Info")

This is a newspaper clipping from THE FINANCIAL EXPRESS (Mumbai/Kochi, Saturday, March 6, 2004).

LG Completes Exporting 5-m Handsets For Reliance Info

Korean major LG Electronics has completed the process of shipping five million handsets to Reliance Infocomm. This was announced at a press briefing by Reliance Industries' chairman Mukesh Ambani and LG Electronics' president & CEO Mun Hwa Park.¹⁰
Ambani stated that Reliance's other vendo¹¹rs would continue to supply handsets. Among the vendors are Samsung, Nokia, and Motorola.
Quote from Ambani: "We have registered healthy numbers for the service. Overall, we expect that we will grow by about two-and-a-half million subscribers each month over the next 30 months," he said. (This matches the projection in Scan_0003.jpg).
Reliance Infocomm is currently focusing on CDMA networks.

Reliance To Set Up 500 Pumps Each Quarter

Reliance will roll out about 500 petrol pumps each quarter starting this quarter.
Ambani mentioned that the company was not going to extend the existing tie-up with the PSUs.
The company will sell its petrol on a spot basis and intends to commission pumps "already."

VSNL Writes Down Assets By Rs 956 Cr

Tata-owned Sanchar Nigam Ltd (VSNL) has informed The Stock Exchange that it is considering a proposal to write down assets by Rs 956.41 crore out of the securities premium account.
The write-down is due to the erosion in the value of certain fixed assets of VSNL based on technical and carrying-value of these assets.
The assets being written down pertain to telecom equipment that have been falling in value due to obsolescence. The total written-down value of these assets is 25 per cent of the value they were acquired for two years ago (about Rs 1,440 crore).

(Bar Graph: "THE BIGGEST RECRUITERS")

This is a hand-drawn bar graph sourced from Business Today / 14-03-04, showing the hiring targets of major recruiters. The numbers are in the thousands (K).

Recruiter	Target (Thousands)	Timeframe
Reliance Infocomm	42
Tata Teleservices	20	(By March 2005)
Pantaloons	7	(In 2 years)
Shoppers' Stop	3	(Till 2007)
Infosys	6-8	(In one year)
Wipro	6-8	(In one year)
TCS	6-8	(In one year)
Accenture	3-5	(In one year)
Scope International	2	(In 2 years)
Office Tiger	1.5	(In 2004)
Essar Group	1.5	(In 2004/05)
Nicholas Piramal	200 Scientists	(In 2 years)

(Note: The targets for Infosys, Wipro, and TCS are grouped in the 6K-8K range, and Accenture in the 3K-5K range, matching the handwritten notes in Scan_0010.jpg).

(Bar Graph: "NEW JOBS EXPECTED - 2004")

This is a hand-drawn bar graph sourced from Business Today / 14-03-04, showing new jobs expected in different sectors in 2004. The numbers on the Y-axis are in Lakhs (1 Lakh = 100,000).

Sector	Expected New Jobs (in Lakhs)
Retail	5.5
Telecom	2
BPO	2
IT Services	1
Financial Services	0.5
Pharma Research	0.1
Hotels	0.1
Health Care	0.1

(Handwritten List: "SUNRISE SECTORS")

This is a handwritten list of "SUNRISE SECTORS" and "Niche Services".

Sunrise Sectors

Retail
Financial Services
IT
IT-enabled Services
Healthcare

Niche Services

Pharma Research
Auto Research
High-end BPO
Knowledge Management
Oil & Gas Exploration

(Handwritten Notes: "Reliance Hiring Scenario")

This is a handwritten list of hiring targets for Reliance, sourced from Business Today / 14-03-04.

BROADBAND SERVICE

Lay/Operate/Maintain Network - 5,000
Reliance Webworld Express Shops (2000 shops) - 25,000
Reliance Infocomm (over next 2/3 years) - 42,000

NETWAY SERVICES

Multimedia Broadband
PCO Booths
Call Centres

VOICE & DATA CENTRE - 10,000
Petroleum marketing (@ 10 persons/ outlet) - 60,000 (about 6000 outlets)

(Handwritten Notes: "NUMBERS TO BE ADDED (VACANCIES)")

This is a handwritten list of hiring vacancies for IT/BPO companies.

Infosys } - 6000-8000 each
Wipro }
TCS }
Satyam - 4000-5000
Accenture - 3000-5000
Convergys India - 13000 (by end 2005)
Daksh - 4000 (by end 2004)

(Handwritten Notes: Estimates and Employment)

Estimates of Headhunters

F. Balaji, GM (Staffing Solutions), Ma-Foi Mgmt. Consultants, Chennai estimates:

1.6 Lakh (L) jobs in ITES (in 2004)
1.0 Lakh (L) jobs in IT

Supply-Side

Non-Engineering Graduates - 2.1 million/year
Post Grads (Non-Eng.) - 3 lakh/year
Engineering Professionals (Degree & Diploma) - 3 lakh/year

Employment

Private Sector (2% of total workforce) - 8 million
Govt. Sector (6% of total workforce) - 24 million
Self-Employed (60% of total workforce) - 240 million

(Handwritten Notes: Statistics & Services)

Statistics Graphs

Growth of Cell-subscriber base
Growth of Fixed-line subscriber base
Share of each subscriber (Mkt. share)
Tariff drop over last 3 years
ARPU over last 3 years
Talk-time (minutes) growth
Data traffic as % of total revenue (India worldwide)
CDMA Vs. GSM growth
Prepaid Vs. Postpaid growth-rate

Services Offered (Matrix) - who offers what.

A matrix is sketched to compare services offered by providers:

| Voice

| Roaming

| SMS

| Astrology

Jobseeker Statistics

Jobseeker statistics
Job Advts on Major Jobsites (site-wise)
Fresh Graduate statistics

(Handwritten Notes: Miscellaneous Ideas)

Ho-hum!
What is in it for me?
For Example - - -
Draft MOU/
Content is the King
THE KILLER APP ('alias, How to make "Prepaid" service 80% of all subscribers).
Flow-chart for JAM

(Bar Graph: Mobile Market-Share % Scenario)

This graph shows the mobile market share percentage scenario, sourced from Smart Investor, March 1, 2004.

Total Subscribers (03): 26 Million
Market Share (03) Breakdown:

Reliance: 22%
Bharti: 19.4%
BSNL: 17.5%
HUTCH: 14.3%
IDEA: 7.8%
OTHERS: 19%

CRISIL RATING forecasts 100 M subscribers by 2008.
The graph shows a projection for Reliance assuming a CAGR of approx. 70% to achieve a 50% market-share by 2008.
Question (Q): Can a CAGR of 70% and a 2007/08 market-share of 50% be achieved without a non-voice, data-based, mass-appeal, application?
Question (Q): Who will be the first to come out with such a killer application?

(Graph: RIM - CAGR %)

This graph plots different Compound Annual Growth Rates (CAGR) against the subscriber base (Millions of Subscribers).

In 2003/04, R!M grew at > 80%.
In 2004/05, R!M targets a growth rate > 120% to reach a subscriber-base of 17 million.

The graph shows the subscriber base (A) starting at 3.5M in 2003 and reaching 6.0M in 2004.
The target (T) is 17M in 2005.

CRISIL RATING forecasts a subscriber-base of 100 M by Mar 2008.
Question (Q): Over a long-term (of 5 yrs) what CAGR can be maintained?
The graph plots CAGR lines reaching a subscriber base by March 2008:

20% CAGR: 8.7 M
40% CAGR: 18.8 M
60% CAGR: 36.7 M
80% CAGR: 66.1 M
100% CAGR: 112 M

(Bar Graph: MONTHLY CHURN RATE %)

This graph shows the Monthly Churn Rate percentage for various countries, sourced from GARTNER: FE 28-02-04.

According to GARTNER, in INDIA the Cost of Acquisition is Rs. 3000.
Monthly Churn Rate (%) for various regions:

Region	Range (Min - Max)
INDONESIA	1% - 2%
Japan	1.5% - 2.6%
Thai	1.9% - 2.6%
Malay	2% - 2.5%
Taiwan	2% - 3.5%
India	3.5% - 6%
HK	4% - 6%
China	6.6% - 13.6%

(Line Graph: SMS Messages Per Month)

This graph compares SMS messages per month across three regions, based on data from GARTNER and other associations.

UK (Mobile Data Association)

2000: 570 Million
2001: 1080 Million
2002: 1440 Million
2003: 1740 Million

USA (Cellular Telecom & Internet Association)

2002: 930 Million
2003: 1200 Million

INDIA (Source: GARTNER)

2003: 616 Million (or 35.8/cell/Month)

(Line Graph: CELLULAR HANDSET MARKET)

This graph shows the cellular handset market estimated by the Indian Cellular Association, sourced from Business Standard + eFE 04-03-04.

GSM Sets (Million Units):

2003: 11.8
2004: 16.9
2007: 63

CDMA Sets (Million Units):

2003: 6
2004: 11.8
2007: 25

(Line Graph: INDIAN TELECOM MARKET REVENUE (Rs. CRORES))

This graph plots the Indian Telecom Market Revenue in Rs. Crores, sourced from Business Standard / 01-03-04. It shows a projected 14% CAGR.

Year	Revenue (Rs. Crores)
'99	22,500
2000	25,600
'01	29,200
'02	33,300
'03	38,200
'07 (Projected)	58,500

(Line Graph: CELLULAR PENETRATION (%))

This graph tracks cellular penetration as a percentage (No. of Cell Phones / 1000 People), sourced from GARTNER / Busi. Std 01-03-04.

End of 2003:

2.7% Cellular Penetration
28.18 million Wireless Customers
41.3 million Fixed Lines

End of '04 (Projected):

5.2% Cellular Penetration
56 million Wireless Connections

(Bar Graph: MOBILE MARKET - MUMBAI - FEB 2004)

Source: Times of India - March 03, 2004

The graph poses the question: "who will overtake whom? -and When? -and Why?"
The bar graph shows mobile market share in Lakhs (L) for Mumbai, distinguishing between GSM (unshaded) and CDMA (shaded):

Orange (GSM): 10.4 L
BPL (GSM): 8.9 L
RIM (CDMA): 7 L
AirTel (GSM): 5.1 L
TATA (CDMA): 2 L
MTNL/Garuda (CDMA): 2 L
Others: 0.8 L

(Bar Graph: OVERALL ARPU (ALL COMBINED))

Source: Voice & Data (Feb 2004)

Period	Overall ARPU (Rs.)
2002	871
2003 (Apr-June)	522
2003 (July-Sept)	516

(Handwritten Notes: Data Services Statistics)

Ave. Revenue share/Data Services

Indian Content Providers 30%
Norway 37%
Korea 40%

No. of Content Providers

India 30
Korea 300 (for just the smallest service-provider)
Korea 5000 (overall)

Download Tariff

Sweden 1 Euro
U.K. 4 Euro

(Handwritten Notes: Statistics & ARPU)

India's teledensity

1995 1%
2003 7%
2005 (projected by Pradip Baijal) 15%

Overall ARPU (Call Combined)

2002 Rs. 871
2003 (Apr-June) Rs. 522
2003 (July-Sept) Rs. 516

Cost of Acquiring a New Customer = Rs. 400

Non-Voice & Data Services

Ringtone downloads 2 lakhs/day (end 2003)
2nd Half of 2003 Non-Voice Services contributed 6%-12% of revenues
2004 Target 20% of revenues from data services
Global Ave. of data Services 15% of revenues

(Handwritten Notes: Statistics)

Bad Debts of GSM Operators

Mar 2002 approx 9% of revenue
Mar 2004 approx 3.5% of revenue
GSM handsets are now available for Rs. 1500/=

GSM User-base

Aug. 2003 17 million
Jan. 2004 23 million

Jan 2004 "Additions"

GSM Operators (added) 1.37 million new
RIM (CDMA) (added) 179,000 new

RIM retailers earn

Rs. 300+ for every Prepaid Connection sold
Rs. 100 for every GSM SIM card sold
Rs. 50 for every "charge" coupon sold

(Handwritten Notes & Bar Graph: Feb 2004 MUMBAI MARKET FOR TELECOM)

This contains a table and a bar graph illustrating the Mumbai market for telecom in Feb 2004.

Fixed Line Subscribers:

Tata Indicom: 7.5 L (Feb 04)
Garuda (MTNL): 23.5 L (Feb 2004)

Mobile Subscribers (Feb 2004) in Lakhs (L):

Orange (GSM): 10.4 L
BPL (GSM): 8.9 L
AirTel (GSM): 5.1 L
Dolphin (MTNL) (GSM): Value not specified
Reliance (CDMA): 7 L
Tata Indicom (CDMA): 2 L
Garuda (MTNL) (CDMA): 2 L

(Newspaper Clipping: Cellphone segment rings up high growth in Mumbai)

Source: ToI 03-03-04 (Times News Network / Baiju Kalesh)

Mumbai is turning into a wireless metropolis as the number of cellphone users in the city outstrip those with landlines.
At the end of January:

Number of city slickers using mobiles had risen to 35.1 lakh.
Fixed lines installed in the city were only 25.5 lakh.

The city's tribe of cellular users has been growing at a pace of 80 per cent annually.
Land lines have barely registered a one to two per cent growth rate.
VVL Pandit, MD, Tata Teleservices, states that fixed line firms have to face market realities that favor cell phones.
The Tata firm has started offering CDMA wireless phones and now has a base of two lakh customers.
Intense price competition and a gamut of operators competing using GSM and CDMA technologies have helped the cellphone segment ring up growth rates in the city, more than doubling from 15 lakhs in end of 2003.
Out of the seven mobile operators, Orange, BPL, Air Tel and Dolphin offer GSM technology.
Reliance, Tata Indicom and Garuda (MTNL) offer mobility through CDMA.
MTNL, Reliance and Tata Teleservices also offer fixed line services.
The main fixed line operator, MTNL (the government-controlled Mahanagar Telephone Nigam Ltd), has a subscriber base of 23.5 lakh as of February.
Tata Tele Services (Maharashtra) Ltd has a subscriber base of 1.5 lakh.
MTNL's ED R.L. Dube said the ratio of fixed to mobile should be 1:3.
In Mumbai, the cellular market is led by Orange with 10.4 lakh subscribers.
BPL has 8.9 lakhs.
Reliance Infocomm with seven lakh.
Air Tel at 5.1 lakh.
MTNL and Tata Indicom with about two lakh each.
Fixed line phones still outnumber cellphones on an all India basis.
Research firm Gartner says that total mobile users across the country total 2.68 crore while there were 4.1 crore fixed line subscribers as of December 2003.
Kobita Desai, telecom analyst at Gartner, says in India the cell users will overtake the fixed line users in 2004.
The firm expects the cell users to touch 5.6 crore as compared to 4.64 crore fixed line subscribers.

(Handwritten Notes: MONTHLY CHURN-RATE)

Source: Gartner (FE 28/02/04)

Monthly Churn Rate (%) range:

India 3.5% to 6% (50% in a year)
Indonesia 1% to 2%
Japan 1.5% to 2.6%
China 6.6% to 13.6%
Malaysia 2% to 2.5%
Taiwan 2% to 3.5%
Thailand 1.9% to 2.6%
Hongkong 4% to 6%

Cost of Customer Acquisition is Rs. 3000/=

(Handwritten Notes: SMS STORY)

SMS STORY [Brand Equity]

Indiatimes.com 15 lakh/day (7 lakh users)

UK Market (Mobile Data Asso-UK)

Ave. Response rate of 15% to SMS marketing
SMS Per Month (P.M.) Per day (Million):

2000 570 19 million
2001 1080 36 million
2002 1440 48 million
2003 1740 58 million

USA (Cellular Telecom & Internet Asso)

SMS per month:

2002 930 million
2003 1200 million

(Handwritten Notes: Estimates of ICA)

Source: Busi. Standard & eFE (04-03-04)

Year	GSM	CDMA	Total
Calendar 2003	11.8 million units	6 million units	$ 1.4 billion
Calendar 2004	$ 1.8 B (16.9 million units)	$ 1.6 B (11.8 million units)	$ 3.4 billion (28.7 million units)
Calendar 2007	$ 6.6 Billin (63 million units)	$ 3.5 bill (25 million units)	[$ 10.1 Billion] (88 million units)

(Newspaper Clipping: Mobile handsets to cost 10-26% less)

Source: OUR ECONOMY BUREAU New Delhi, 3 March

Mobile handsets are becoming more affordable following a reduction of basic Customs duty and abolition of the special additional duty (SAD) on imported handsets.
Leading manufacturers, including Motorola, Nokia, Siemens, Alcatel, and Samsung, announced price cuts in the range of 10 to 26 per cent.
The reduction is expected to triple growth in the handset market from $1.4 billion in 2003 to $3.4 billion by the end of 2004.
Pankaj Mohindroo, President of the Indian Cellular Association (ICA), said the ICA has formed a committee under the ministry of communications to promote local handset manufacturing. The committee will submit its report within eight weeks.
At least three manufacturers are keen to start local manufacturing, adding that the estimated total market value would be 20 per cent higher due to the price cuts.
Revised prices:

Entry level Motorola C 350 cost 20.73 per cent less, or Rs 5,548.
Popular Nokia N 2100 cost Rs 5,299 instead of Rs 6,949.
Maximum reduction was on the Nokia 3100, which is Rs 11,370 from Rs 15,399.

ICA Estimates by 2007:

GSM handset market will grow to $6.6 billion.
CDMA handset market will grow to $3.5 billion.
Total market value will be $10.1 billion.

ICA Estimates of Units:

GSM handsets could go up to 63 million in 2007.
CDMA manufacturers would have sold 25 million handsets in 2007.

(Newspaper Clipping: Handset Cos Mull Manufacturing In India)

Source: eFe 04-03-04

Several major mobile handset vendors are considering setting up manufacturing bases in India.
ICA president Pankaj Mohindroo said "at least three of our core members are interested in setting up manufacturing bases in India".
The ICA committee will submit its report to the government in eight weeks to encourage handset manufacturing.
The Volumes Game (Indian Handset Market in million units):

| Year | GSM | CDMA |

| 2004 | 16.90 | 11.80 |

| 2005 | 28.92 | 14.85 |

| 2006 | 42.64 | 19.80 |

| 2007 | 63.00 | 25.74 |

The Indian cellular handset market is set to be worth $3.3 billion in calendar year 2004.

$1.8 billion will be accounted for by GSM players.
$1.5 billion will be accounted for by CDMA players.

The total market size will be around 28.7 million units.

16.9 million units will be based on GSM standard.
11.8 million handsets will be based on CDMA standard.

Mohindroo pointed out that handset manufacturers have benefited from duty cuts, but he also noted that the average price of some handsets has gone down by 8-10 per cent.
The ICA has requested the governments of Bihar, Jharkhand, Tamil Nadu, North Eastern states, Tamil Nadu, and Karnataka to rationalise sales tax to 4 per cent.
ICA has also requested Punjab, Gujarat and Maharashtra to abolish octroi.