1 1 Slide Investing in Indian Telecom Laxmi G Vulpala

2 2 Slide Investing in Indian Telecom   India - An Overview   Why India?   Telecom Market and Growth Potential   Opportunities for investments

3 3 Slide India –An Overview   Population   States/Union Territories   Geographical Area   Business language   GDP - per capita (PPP):   GDP (PPP) Over 1 billon million sq km English US $3,400 (2005 est.) US $3.699 trillion (2005 est.) Source: CIA Fact book

4 4 Slide   4th largest economy by PPP index   6th largest energy consumer   GDP growth to continue between 6-8% in the last decade   Projected to be 3rd largest economy by 2050: Goldman Sachs Why India –Macroeconomic Impetus

5 5 Slide Why India –Demographic Impetus   Working age population of India ( ages 15-64) set to increase to 882 million by Working age population to rise to 65%   India’s urban population expected to rise to 40 per cent from the current 28 per cent by 2020 Urban population to rise to 40%

6 6 Slide Why India - Government Telecom Policy   Virtually complete deregulation.   Specified imports related to telecom infrastructure were exempted from basic customs duty   Foreign Direct Investment up to 74 per cent permitted.   100% FDI permitted under automatic route in the manufacturing sector

7 7 Slide Market and Growth Potential Revenue expected to increase 3 times in the next 5 years Current teledensity of 8.8 % set to increase to 20% in the next 5 years Growth rate about 5 million subscribers per month Source: TRAI (Telecom Regulatory Authority of India)

8 8 Slide Market and Growth Potential   7th largest telecom network in the world   Size (2003)US$ 9 billion 2010 (projected)US$ 23 billion   Telecom network growth rate30%   Fixed lines (Dec, 2004)44.76 million   Wireless connections (Dec, 2004)48 million   Urban teledensity18.2%   Rural teledensity1.5% Source: TRAI (Telecom Regulatory Authority of India)

9 9 Slide Market and Growth Potential

10 Slide Market and Growth Potential India Vs China in comparable years of service In the 9th year of wireless operation China(1996) 6.8 million India(2002) 28 million Source: TRAI (Telecom Regulatory Authority of India)

11 Slide Opportunities for investments Foreign Direct Investment (FDI) Bharti Tele-Ventures, a large private telecom player offering varied telecom services and the largest GSM cellular operator,currently has foreign partners holding a combined stake of 55 % in the company; these include SingTel(with 28.4%), Vodafone (with 10%) Hutchison Whampoa has a 53 per cent stake in Hutchison Telecom, the second largest GSM cellular operator in India. AT&T Wireless has a 33.3 per cent stake in Idea Cellular while France Telecom holds a 26 per cent stake in BPL Mobile.

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