Detailed Study of Indian Telecommunication Sector. Specific Strategic Approach to Reliance Jio. Suggestions to Jio.

1. STRATEGIC OUTLOOK
OF
INDIAN
TELECOMMUNICATION
Presentation By: Abhisek Khatua

2. Indian Telecom: An Overview
• Subscriber Base of 1036.57 Million at the end of December,
2015; 2nd Largest Telecom Network in the world.
2nd Largest Subscriber Base
• Internet Subscriber Base of 331.66 Million at the end of
December, 2015; 3rd Highest in the world, CAGR 52.11%.
3rd Highest Number of Internet
Subscribers
• Mobile based Internet is key component, 7 out 8 users
accessing Internet through Mobile.
Most of the Internet accessed
through Mobile Phone
• Urban Tele-density stood at 152.57 and Rural Tele-density
stood at 49.42.
Increasing Penetration Rate
• Availability of affordable smart phones and Lower rates are
expected growth drivers.
Affordability and Lower rate
• $71.2 Billion in FY14, grew at 10.7% compared to FY13.Surging Telecom Revenues
@Data Source: DOT , Annual Report-2015

3. Indian Telecom: The Notable Trends
Wireline Vs Wireless
10%
90%
Public Private
Connections (Public Vs Private)
2%
98%
Wireline
Wireless
44.01% 48.04% 49.42%
75.23% 79.36% 81.85%
145.46% 149.04% 152.57%
APR' 2014 APR' 2015 DEC' 2015
Rural Tele-density
Overall Tele-density
Urban Tele-density
Tele-density (81.85%)
@Data Source: DOT , Annual Report-2015

4. Indian Telecom: The Notable Trends
Green Telecom: Aimed at reducing Carbon Foot Print through low energy consumption; More
environmental concern and more investment.
FDI Policy: FDI Limit 100%, More Foreign Capital Inflow.
BharatNet (NOFN): To connect 2.5 Lakh Gram Panchayats, Govt. approved Project
“National Optical Fiber Network”; Non-Discriminatory access to Network in rural areas.
Unified License: National Telecom Policy-2012: One Nation-One License across
services and service areas. Spectrum Allocation through Bidding, delinked from License.
Extension to Rural Market: 62443 Uncovered Villages, Subsidy support from Govt.’s
Universal Service Obligation Fund, increasing rural subscriber base and tele-density.
Outsourcing of Non-Core Activities: Network Maintenance, IT operations and Customer
Service; efficiency increased but responsiveness is pain area.
Mobile Banking: In May’ 2015, 340 Million Mobile Banking Transactions reported (75% up
from a year ago); Due to affordable smart phones and rise in security level, More Mobile Internet.

5. Indian Telecom: The Notable Trends
Regulatory Frameworks
• Compensate consumers
in case of call drop.
• Reduction in License
Fees from 8% to 6% of
Adjusted Gross Revenue.
• Monitoring of POI on
monthly basis by TRAI.
Research & Development
• C-DOT, R&D arm of
DoT
• Focus on Satellite
Communication, Telecom
Security.
• Innovative Telecom
Solutions and
Innovations
Emergence of BWA
Technology
• Wireless Communication
include BWA
Technologies such as
WiMax & LTE.
• Greater importance in
4G.
Emergence of Tower
Industry
• Surge in Subscriber base
prioritized Network
Expansion.
• Significant Investment in
Telecom Infrastructure.
• Creating Separate
Company for lowering
down the operational cost
& improving capital
structure.

6. Indian Telecom: 3 Segments
Indian Telecom
Internet Services
Fixed-Line
(Wireline)
Mobile (Wireless)
Comprises establishments, operating and maintaining
switching and transmission facilities to provide direct
communications via airwaves.
Consists of companies that operate and maintain
switching and transmission facilities to provide direct
communications through landlines, microwave or a
combination of landlines and satellite link-ups.
Includes Internet Service Providers (ISPs) that offer
broadband internet connections through consumer and
corporate channels.

7. Indian Telecom: The Value Chain
Telecom
Infrastructure
Network
Equipment
Network
Operator
Subscriptions
and Devices
Resellers
Content
Portals
Subscribers
• Indus
• Reliance
Infratel
• Bharti
Infratel
• QTIL
• GTL
• Nokia-
Siemens
• Huawei
• Ericksson
• Airtel
• Vodafone
• Idea
• Reliance
• Sumsung
• Lava
• HTC
• Outlet
• Dealers
• Social
Media
• App Stores
Consumers

8. Indian Telecom: Key Players
24%
19%
17%
11%
8%
8%
6%
7%
Bharti Airtel Vodafone Idea
Reliance Aircel BSNL
Tata Others
Wireless Segment (Airtel Dominates)
Top 5 players accounts 78.27% of
Total Subscriber
60%
14%
14%
7%
4%
1%
BSNL MTNL Bharti Airtel
TATA Reliance Others
Fixed Line Segment (BSNL
Dominates)
Top 3 players accounts 87.46% of
Total Subscriber
23%
20%
16%
16%
9%
16%
Bharti Airtel Vodafone
BSNL Idea
Reliance Others
Broadband Subscription (Airtel
Dominates)
Top 5 players accounts 84% of Total
Subscriber
@ Data Source: DoT, Annual Report-2015

9. Indian Telecom: Industry Analysis
Competitive Rivalry
• Customers’ low switching cost and price sensitivity
are increasing competition among players.
• High exit barriers are also intensifying competition.
• There are around 6 to 7 players in each region,
leading to intense competition.
Threat of New Entrants
• Strict government regulations.
• Extremely high infrastructure setup cost.
• Difficulty in achieving economies of scale.
Threat from Substitute Products
• Hardly any threat of substitute products as there is
no substitute available in the market. (Skype,
Messaging Apps likes Whatsapp, Hike, Line)
Bargaining Power of Suppliers
• High bargaining power of suppliers as there
are just a few suppliers in the sector.
• High cost of switching suppliers.
Bargaining Power of Buyers
• Low switching cost and mobile number
portability give customers high bargaining power.
• Customers are price sensitive.
Porter’s Five Forces

10. Indian Telecom: Industry Analysis
Growth Drivers
Sector Benefits From Rising Income, Growing Young Population
Growing Demand Increasing InvestmentPolicy Support
Higher real income
(growing at CAGR
8.87%) and changing
lifestyles
Growing young
population
Increasing MOU and
data usage
Reduction in license fee
Relaxed FDI Norms
Encourages firms to
expand to rural areas
Higher FDI inflows
Increasing M&A activity
Inviting
Resulting in

11. Indian Telecom: Competitor Analysis
Bharti Airtel: An Inspiring Success Story
• Set up in 1995, it is world’s 4th largest telecom operator with
presence in 20 countries.
• It is the country’s leading mobile operator, with a customer
base of 235.2 million (increased at CAGR 37.79%) as of
September 2015.
• Revenues increased at a CAGR of 13.3% from $6.3 billion
in FY08 to $15.1 billion in FY15.
• The company had expansion plans in Africa to tap the huge
growth potential.
• It became the first Indian telecom company to offer 4G
service on mobile phones (April, 2012).
Airtel operates in all 22 Telecom circles in India
Important Service Offerings:
2G, 3G, 4G,
Airtel Wifi Zone (NCR, Mumbai, Mangalore,
Bangalore)
Airtel Money: m-Commerce platform for financial
transactions, pan Indian presence.
Smart Drive: Navigation App exclusively
available for Airtel Customers(Bangalore, Mumbai
& NCR).
@ Data Source: Airtel Corporate Website

12. Indian Telecom: Competitor Analysis
Vodafone: The Tough Guy
• Set up in 1994, it is one of India’s leading mobile operators,
with more than 188.2 million subscribers as of September
2015.
• Vodafone's revenues from India increased at a CAGR of
8.44% to $6.7 billion during FY08–15.
• Vodafone Group plans to invest heavily in the establishment
of a fibre-optic network in India.
• Gujarat, Uttar Pradesh, Maharashtra, and West Bengal
together account for over 45% of the total customer base.
Vodafone operates in all 22 Telecom circles in
India
Important Service Offerings:
2G, 3G, 4G
m-pesa: m-commerce platform for financial
transactions, partnered with ICICI & HDFC Bank.
Vodafone Stores: Total 675 stores, Total mini
stores 3083, 34 Vodafone Angel Stores (entirely
staffed by women)
@ Data Source: Vodafone Corporate Website

13. Indian Telecom: Competitor Analysis
Idea: The “!” Mark
• Set up in 1995, 3rd largest mobile
operator by subscriber base.
• 2G, 3G, 4G offerings.
• The best gainer of Mobile
Number Portability
• Idea Money: m-commerce
platform
Aircel: The Best Economical
• Set up in 1999, fastest growing
mobile operator by subscriber
base.
• 2G, 3G, 4G offerings.
• Aircel Business Solutions
(ABS)
• Aircel offers most economical
call rates.
• Best Telecom Service provider
(2015 Survey by Mint & Insta
Vanni)
Reliance Communication: The
M&A King
• Set up in 2002, subsidiary of
Reliance Anil Dhirubhai
Ambani Group.
• 2G, 3G, 4G offerings.
• Acquisition of MTS, January-
2016.
• Merger of wireless business
with Aircel, Septemeber-2016.
• Ultraband: Service offering
internet speeds of up to 1 Gbps
in selected locations in Mumbai
and Navi Mumbai, April-2016@ Data Source: Respective corporate Websites

14. Indian Telecom: Competitor Analysis
BSNL & MTNL: The State Childs
• Set up: BSNL-2000, MTNL-
1986.
• BSNL-largest fixed Telephony &
Broadband provider.
• BSNL-DataOne (Post paid),
NetOne (Broadband), 3G, 4G
offerings.
• MTNL-Service provider in
Mumbai & New Delhi.
Major 3G Spectrum Holders
@ Data Source: Dataregion

15. The Game Changer: Customer Satisfaction Matters a Lot!!!

16. The 4G Age Started
Let’s have a look on 4G Band Holders -Telecom Circle-wise

17. Telecom Circle Airtel Reliance Jio Vodafone Idea Cellualr BSNL Aircel
Delhi BAND 3, 40 BAND 3, 40 BAND 3 No No No
Mumbai BAND 3, 40 BAND 3, 5, 40 BAND 3 BAND 3 No No
Kolkata BAND 3, 40 BAND 3, 40 BAND 3 BAND 3 No BAND 40
Andhra Pradesh BAND 3 BAND 3, 40 No BAND 3 No BAND 40
Gujarat BAND 3 BAND 3, 40 BAND 3, 40 BAND 3 No No
Karnataka BAND 3, 40 BAND 3, 40 BAND 3 BAND 3 No BAND 40
Maharastra BAND 40 BAND 3, 40 BAND 3 BAND 3 No No
Tamil Nadu BAND 3 BAND 3, 40 No BAND 3 No BAND 40
Haryana BAND 3, 40 BAND 3, 5, 40 BAND 3 BAND 3 BAND 41 No
Kerala BAND 3, 40 BAND 3, 40 BAND 3 BAND 3 BAND 41 BAND 40
Madhya Pradesh BAND 3, 40 BAND 3, 5, 40 BAND 3 BAND 3 BAND 41 No
Punjab BAND 3, 40 BAND 40 BAND 3 BAND 3 BAND 41 No
Rajasthan BAND 3 BAND 3, 40 BAND 40 No BAND 41 BAND 40
Uttar Pradesh (East)BAND 3 BAND 3, 5, 40 BAND 3, 40 BAND 3 BAND 41 No
Uttar Pradesh (West)BAND 3 BAND 40 BAND 40 BAND 3 BAND 41 BAND 40
West Bengal BAND 3 BAND 3, 40 No BAND 3 BAND 41 No
Assam No BAND 3, 5, 40 No BAND 3 BAND 41 BAND 40
Bihar BAND 3 BAND 40 No No BAND 41 BAND 40
Himachal Pradesh BAND 3, 40 BAND 3, 5, 40 BAND 40 BAND 3 BAND 41 No
Jammu & Kashmir BAND 3, 40 BAND 5, 40 No BAND 3 BAND 41 BAND 40
North East BAND 3, 40 BAND 3, 5, 40 No BAND 3 BAND 41 BAND 40
Orissa BAND 3, 40 BAND 3, 5, 40 No BAND 3 BAND 41 No
BAND 5 LTE FDD (850 Mhz), BAND 3 LTE FDD (1800 Mhz), BAND 40 LTE TDD (2300 Mhz) and BAND 41 LTE TDD (2500 Mhz)
@ Data Source: Dataregion

19. Indian Telecom: Jio Entry
“The Way I see Jio is that it is not a telecom business. It is an Internet business that also provides connectivity” -Mukesh Ambani
Digital Revolution
• Need of Digital Tools &
Digital Skills.
• India ranked 155th of 230
countries.
• Jio promised to take
India to Top 10.)
Digital Life
• Data is oxygen of Digital
Life.
• Exponentially growing
Data Demand.
• Realization Digital India
Vision.
Jio Ecosystem
• Best quality broadband
network
• Compelling apps and
content
• Superior digital services
experience
• Affordable and simple
tariffs
• Affordable, cutting-edge
devices
Jio Network
• India’s first all IP network
• Mobile video network
• True 4G covering 18,000
Cities,2 Lakh villages
• Voice over LTE (VoLTE)
• Data-strong network built
for Internet
• Future Proof –5G, 6G
ready
Dedicated to 120 Crore Indians: A tribute to realize the Digital India Vision of Hon’ble Prime Minister Shri
Narendra Modi.
@ Date Source: Jio Corporate Presentation

20. Indian Telecom: Jio Entry
“From September 5 (2016), India will change forever” -Mukesh Ambani
• Flame, Wind, Water, Earth Lyf Device
(Affordable Smart Phones).
• Fuelled 4G Ecosystem
@ Date Source: Jio Corporate Presentation

21. Indian Telecom: Jio Entry
“Jio is the creation of the Young, by the Young and for the Young.” -Mukesh Ambani
My Jio Applications became the most downloaded Application on Google Play and Apple
Store India on September 2, 2016. My Jio Applications will be free for customers till end of
2016 (the Jio subscription worth of ₹ 15000 annually)

22. Indian Telecom: Jio Entry
Student Plan (Future Ready Market)
• 25% More Date
• Connecting 30,000 Schools
@ Date Source: EY Research on Global Telecom Trends-2020 & Jio Corporate Presentation

23. Indian Telecom: Jio Entry
The Big Dream
100 Million customers (i.e. 10% of 1
Billion Mobile Users) in shortest
possible time span.
The present market leader Airtel took
15 years to achieve it.
@ Date Source: Jio Corporate Presentation

24. Indian Telecom: The Strategic Moves
The Merger Game: RComm & Aircel
The Costly Bid of Airwaves: 7 incumbents, 7 bands of 800 Mhz, 900 Mhz,
1800 Mhz, 2100 Mhz, 2300 Mhz, 2500 Mhz and the most valuable 700 Mhz
Fighting over Interconnection & Blame-Game (Idea/Jio, Airtel/Jio)
Strategic Partnerships (Between incumbents in different services and
different service areas
Equity Infusion: Vodafone is going to infuse ₹ 20100 Cr
Vodafone Leadership Structure Rejig
Free-Free-Free & Cost Effective Mania Service Offerings

25. Advice To Jio
Burn the Bottom Line for 700 Mhz Airwave: High Future Pay-off is there.
Jio-Giri: Data-Giri: Marketing 3.0 (Occasional Data User, Light Data User and Heaviest Data
User)
Quality Subscribers (Follow hard Price Sensitive Consumers : No, Make Consumers Price
Aware: Yes)
Stick to Low Price and Differentiated Product (Best for Oligopolistic Market)
Focus on B2C as well as B2B with Service Excellence
Prospect of Internet of Things (Smart Village, Smart City, Smart Home)
Employees & Customers: Internal Strategic Asset and External Strategic Asset

26. Advice To Jio
Make Investors Trust the Equation (₹ 150 K Crore Investment, 18000 Cities, 1.5 Lakhs Villages,
100 Million User Base, Break Even will be 5 years, given the choice for ₹ 149 Plan, Then High
Teen Return)
Personalization is Key (Consumer should get Pre-Selection of what they are interested), Join
hands with e-commerce players and mobile device companies.
SME and Start-Up: The Growing Untapped Market
The All Good of Ethics, Privacy, Security and CSR
Quality Oriented, Quality Specific and Quality Dedicated (Call Drop, Speed of Surfing,
downloading, uploading, customer service)

27. Conclusion
› Jio has started its innings in Telecom by hitting “Jio” sixer. Now they need to face the coming
attack of pace & spin both, changing pitch, umpiring, tight fielding and fielding changes and
expectations of full-stadium spectators.
› Can be Bitter Coffee for Investors
› Jio has got Spiderman Impact.
› The Digital Revolution & Disruptive Competition.
› Planned approach for Go-Grow-Sustain.
› For Jio, if they head in wrong direction, then speed and big size will only get them to the wrong
place; Jio may become a Titanic Story.
› Connected Intelligence, Simple-Smart-Secure.

28. Thank You