Working Group on Telecom Sector 12 th Five Year Plan July 18, 2011

Contents  Indian telecom scenario  Growth potential  Investment estimates 2

Indian Telecom Scenario Fastest growing Sector with average monthly addition of million subscribers Current subscriber base of over 875 million and active subscribers of about 588 million Second largest mobile network with over 840 million wireless subscribers Addition of over 225 million connections last year Roll out of services in more than 8000 towns and cities and over 500,000 villages mobile operators in most of the circles 3

Growth Source: DoT, TRAI 4

Wireless led Growth March 2007 Total telephones million March 2011 Total telephones million Source: DoT, TRAI 5

Teledensity Growth 6

Share of private network (%) Source: DoT, TRAI 7

Broadband growth Source: DoT, TRAI 8

Growth Potential Network Expansion 1.1 billion subscribers by 2015 Broadband TRAI -National Broadband Plan 160 Million by 2014 – Investment of Rs. 60,000 crore 2,50,000 villages Panchayats within 3 years Broadband coverage for all secondary and higher secondary schools, Village Panchayats and all public health care centers. Leveraging USO funds for faster expansion of broadband Universal Access through support for shared infrastructure for rural cellular mobile Optical fibre connectivity for broadband upto Village Panchayats 9

Investment estimates 10

Investment in Telecom Sector 11 th Five Year Plan YearInvestment (Source: TRAI) 11 Five Year Plan (Planning Commission) 11 Plan Centre 11 Plan Private * * Total (Rs crore) *Projected 11

Areas of Investment in 12 th Plan Investment required in – Network expansion- Triple Play Especially in rural and remote areas – Network upgrades Rapid Advancements in Technology/ customer demand cycles 3G expected to account for 20% of subscriber base by 2015 NGN & IPV6 – Broadband expansion (BWA) – National Optical Fibre Network (NOFN) – Convergence of Technology – Value Added Services – Manufacturing and R&D 12

Investment Assumptions Existing Telephone subscribers more than 875 million Active subscribers about 588 million Broadband subscribers more than 12 million Expected by March 2017 (end of 12 th V Year Plan) Telephone subscribers million – 3G/4G subscribers about 25% i.e. 300 million Broadband subscribers- 175 million e-Governance initiative to boost demand Telecom tower, VAS Low ARPU/Tariff 13

Estimated Sectoral Investment in 12 th FYP Core telecom equipment - Rs. 1,35,000 crore + 1,50,000 Crore – Investment in 2G network 2G -Capacity addition million /- per line (average) =Rs. 1,35,000 crore – Investment in 3G/4G, Wimax, LTE etc capacity- 500 million /- per line= Rs. 1,50,000 crore Total Investment in Core telecom equipments = Rs. 2,85,000 crore 14

Estimated Sectoral Investment in 12 th FYP Transmission Network (SDH, Microwave Radio, Routers) Rs. 40,000 crore (Approx. 14%) Access Network (Investment in tower, battery, power plant, Green Telecom) Rs. 1,00,000 crore Total Investment in Access and Transmission Network = Rs. 1,40,000 crore 15

Estimated Sectoral Investment in 12 th FYP Broadband Roll-out-Rs. 75,000 crore Customer premises equipment (USB Dongles, modem etc) Rs 50,000 crore Spectrum charges (on renewal/ through auction) Rs 1,00,000 crore Total Investment =2,25,000 crore Total Investment in Telecom Infrastructure Rs. 2,85,000+1,40,000+2,25,000= Rs. 6,50,000 16