Connecting A Continent With 802.16d - The Indian Experience

Connecting a continent with 802.
16d
The Indian Experience
Prateek Pashine
June 16, 2008
©2008 Tata Communications, Ltd. All Rights Reserved. Confidential & Proprietary
Safe Harbor Statement
Certain words and statements in this presentation concerning Tata Communications and its prospects, and other statements including those relating
to Tata Communications’ expected financial position, business strategy, the future development of Tata Communications’ operations and the general
economy in India, are forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors, including
financial, regulatory and environmental, as well as those relating to industry growth and trend projections, which may cause actual results,
performance or achievements of Tata Communications, or industry results, to differ materially from those expressed or implied by such forward-
looking statements. The important factors that could cause actual results, performance or achievements to differ materially from such forward-looking
statements include, among others, failure to increase the volume of traffic on Tata Communications’ network, failure to develop new products and
services that meet customer demands and generate acceptable margins, failure to successfully complete commercial testing of new technology and
information systems to support new products and services, including voice transmission services, failure to stabilize or reduce the rate of price
compression on certain of the company’s communications services, failure to integrate strategic acquisitions and changes in 12 JAN 2008
government policies or
regulations of India and, in particular, changes relating to the administration of Tata Communications’ industry, and, in general, the economic,
business and credit conditions in India. Additional factors that could cause actual results, performance or achievements to differ materially from such
forward-looking statements, many of which are not in Tata Communications’ control, include, but are not limited to, those risk factors discussed in
Tata Communications’ various filings with the United States Securities and Exchange Commission. These filings are available at www.sec.gov. Tata
Communications is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements.
1
Tata Communications :: WiMAX Journey
Confidential & Proprietary
An Introduction to Broadband – WiMAX :: The
Tata Current India Answer
Communications Perspective
2
Tata Communications Leadership Landscape
Industry Leader State-of-the-art Customers

#1 global wholesale voice Infrastructure 1,500 global carriers
#1 global submarine cable 200,000 route km global 600 mobile operators
capacity network
“Fortune 1000” of India
#1 intnl. long distance services 300 points of presence (PoPs)
5,000+ SMEs in India
in India 20+ terabit submarine capacity
500,000 Internet and
#1 enterprise data services in ~1M sq. feet of data center broadband subs
India space
#1 Internet services in India
3
Our Strengths
• #1 International and Enterprise data services in India

• Relationships with Top 2000 enterprises in India including
India Fortune 500 companies
Enablement • Best connectivity to India and expanded reach within
Global • Owned cable network across the globe: $1Bn investment

Submarine & • Tier-1 Global IP Network and leading ISP in India
IP Reach • Unique assets and connectivity in Asia, Middle East, Africa
• #1 wholesale international voice provider

Integrated
• Suite of voice, data, IP, signaling and outsourcing services
Wholesale
• Over 1500 carrier relationships including 600+ mobile
Services operators
4
Our Weaknesses & hence opportunities
• Business largely focused on Wholesale and Enterprise

• Legacy retail restricted to Dialup Internet
Customer
• No retail voice business
Base
• Limited ownership of last mile

Last Mile • Prohibitive cost of buried network
Network • No LLU
• No 2G / voice spectrum
No Legacy
• MMDS / LMDS spectrum available at 2.7 and 3.3 Ghz
voice
spectrum
5
The Broadband
opportunity in India
Prateek Pashine
June 16, 2008
India: Strong Economic Fundamentals
Third Largest Economy by 2050(1) With Highest Projected Growth Rate(1)
GDP (US$bn) GDP CAGR (2005-2050E)
50,000 44,453
10% 8.9%
40,000 35,165 7.5%
8%
30,000 27,803 5.9%
6% 5.5%
20,000
4%
2.5%
10,000 6,673 6,074 5,870 1.8% 1.7%
3,782 3,603 2% 1.3%
3,148 0.9%
0 0%
Germany
US
UK
China
India
Japan
Russia
France
Germany
US
UK
China
India
Japan
Russia
France
Brazil
Brazil
Increasing Per Capita Income(2) Increasing Household Disposable Income(3)
Per Capita Income (US$) Avg HH disposable income
CAGR : 10% Rupees (‘000) Urban
1,140 500
1,200 CAGR CAGR
961 4.6% 5.8%
797
900 3.6% 5.3%
All India
640
2.8% 3.6%
600 250
Rural
300
0 0
FY04 FY07 FY08E FY10E FY95 FY90 FY95 FY00 FY05 FY10E FY15E FY20E FY25E
(1) Source : Industry Research; currency translated using 2003 US $ rate

(2) Source: Street research & RBI website 7
Tata Communications :: WiMAX Journey (3) Source: McKinsey Report: The ‘Bird of Gold’ dated May 2007
India: Favorable Demographic Shift
Favorable Shift in Income Profile (1) Growing Work Force (15-59 yrs)(2)
% of population % of
population
100% 1 1 2
1 100% 7% 8% 8%
4 9% 11% 12%
8
19 75%
58% 60% 63% 64% 64% 64%
80% 50%
41 32
25%
35% 32% 29% 27% 25% 23%
0%
60% FY 2001 FY 2006 FY 2011E FY 2016E FY 2021E FY 2026E
43
0-14 yrs 15-59 yrs >60 yrs
40% 36 Increasing Literacy(3)
% literate population
54
80 75
20% 70
35
60 55
22
50 43
36
40
0%
30
FY 2005 FY 2015E FY 2025E
20
Deprived (<Rs. 90,000 pa) Aspirers (Rs. 90,000-200,000 pa)
10
Seekers (Rs. 200,000-500,000 pa) Strivers (Rs. 500,000 - 1,000,000 pa)
0
Globals (>Rs. 1,000,000 pa)
FY 1981 FY 1991 FY 2001 FY 2011E
(1) Source: Mckinsey Report May 2007 (Income levels are at real 2001 prices)
(2) Source: The National Commission On Population May 2006 8
Tata Communications :: WiMAX Journey (3) Source: India stats website; 2011 rate is India’s 10th Economic Plan objective
India – Huge Internet Potential
Phone
Connections
Population 1.2 billion 300 million
Total
Total Population
Population
Urban Population
300+ million
Cable
Addressable
Addressable Urban
Urban Connections
population
population 80 million
People
People with
with Phone
Phone (Wireline/
(Wireline/
Wireless) connections
Wireless) connections
Internet
User
70 million Fixed
Cable/
Cable/ Internet/
Internet/ Broadband
Broadband Connections
Connections
Connections Internet 40 million
Connections
9.2 million Broadband
Connections
4 million
Provisioning
Provisioningofofwireless
wirelesstechnology
technologywould
wouldenable
enableconversion
conversionofofaddressable
ddressable market
aaddressable marketinto
intosubscribers
subscribers
9
Confidential
Source : TRAI, IAMAI, Management estimates (Estimates for September 2007) & Proprietary
India – Huge Internet Potential…
• Poor infrastructure & support
• No LLU
• Legacy network with long loop lengths
• Unorganized cable infrastructure with poor network
Current • 2G + services in the country
Impediments • High Buried Access Costs
for growth • Very low wireline penetration
• 200 months of ARPU as Capex
• Limited green-field deployment
• Limited spectrum for BWA
• Limited content offering – restricted utility for access
• Far superior roll-out mechanism with the advantage of existing

Wireless to be infrastructure of wireless telecom players
the technology • Spectrum auction likely in near term – Transforming the Indian industry
• Potentially large coverage and faster expansion
for choice
Wireless
Wirelessisisthe
thebest
besttechnology
technologyto
todrive
driveinternet
internetgrowth
growthininIndia
India
10
Bypassing Legacy – the India Way
Voice Services: Digital mobile is 8X of fixed lines

GSM introduced in 1995 and CDMA-1X in 2003
No analog. No standards issues
Pay TV Services: Satellite leading the

introduction of digital TV
Analog cable prevalent since mid nineties
Government mandates “conditional access” in
metros
Satellite (DTH) services achieve 5% share in a
year… 3 new players entering the market
Broadband ???
11
Wire(d)less WIMAX to the fore!!
12
WiMAX – First off the Blocks
3G - Policy yet to be finalized
Spectrum to be auctioned to 3-4 players
Greater impact on voice economics rather than data services
WiMAX – Available now

ISPs using 3.3GHz spectrum for WiMAX roll-out
At least 3 networks being built in all large towns
Best spectral efficiencies
Already a 4G technology – OFDMA today
Cost of CPE soon becomes indirect
Promising
Promisingtechnology
technologyoption
option --need
needcatalyst
catalystto
tofuel
fuelthe
thedeployment
deployment
13
WiMAX in India – Current Scenario
• Spectrum available in the 3.3 GHz band

• 6 players with 12 Mhz
• 1 player with 14 Mhz
Regulatory
• CPE cannot be sold to subscribers
Scenario • Royalty for BTS and for every CPE on an annual basis
• 2.x GHz auction expected in FY 2008-09
• Operators migrating from MMDS/LMDS at 3.3 Ghz to WiMAX

• Largely for Enterprise; also for Retail
• Tata Communication: Launched services in 35 Cities for Enterprise
Deployment • Launched its services in Bangalore with 7 K active subs
status • Aircel and Reliance: Offer to enterprises has been rolled out in 8-10 cities
• Others trialing WiMAX gear
14
WiMAX in India –
Tata Communications takes the lead!!!
15
Market needs | WiMAX in India
Businesses Consumers
Supplement Fiber roll-out in major Primary access mechanism for

metros Broadband
Expand access reach (~ E1) to all Provide reliable 1Mbps experience
major business towns + content/apps
Current Status: >35 towns Current Status: 1 city
March 2009: 115 towns March 2009: 15 cities
16
Bangalore :: Retail WiMax Roll out Details, India’s first ALL CITY coverage of
WiMAX
Launched with 132 BTS in Dec 2007, currently 158

Most sites back hauled on Fibre
3.3 Ghz, 12 Mhz, 3 Mhz/sector, 4 sectors
85% of the city covered
Outdoor SS – truck roll required
Introduced 3rd party SS to work with the BTS
Arguably the first network in WiMax d to have fully interoperable 3rd party SS
SS installed at between 3 to 8 mtrs height
ARPU of $25 + a month – almost 3 times the industry average
Over 7,000 customers installed in first 4 months!!
6 other cities ready to go Live in coming quarter
17
Bangalore coverage
City divided based on Business requirement in to 5 clusters
Cluster 0 – Corporate – Downtown
Cluster 1 – SME
Cluster 2,3&4 – Residential
Design Assumptions
Cell edge – QAM16
Building edge coverage
90% Probability of service by area
Area of coverage approx 300 Sq Km
18
Bangalore – City Clusters
Cluster 1
Cluster 2
Cluster 0
Cluster 4
Cluster 3
19
Overall Coverage
20
Our Experience
3.3 Ghz 16 d deployment
Subscriber Station height a key factor for feasibility
Outdoor and Semi-Outdoor Coverage is not an issue
Full Outdoor SS will definitely give better coverage.
Limited Indoor Coverage –Indoor penetration loss is high in 3.3Ghz
Spectral Efficiency of 2 bits/Hertz/Seconds – 6 mbps per sector
IOT with different SS vendors
21
Sample Pictures - BTS & SS
22
Roll-Out Plan
FY 2008 FY 2009 FY 2012
5-7 Cities (1) Top 40-50 Cities (1) > 100 Cities (1)
Current Status Q4, FY 08 FY 09 FY 10 FY 11 FY 12

Cities in India 2 5-7 ~40 - 50 ~60-80 ~80-100 >100
No. of BTS 150 - 200 200 – 300 3,000 – 3,500 ~4,000 4,000 – 4,500 4,500 – 5,000
National spectrum availability 3.3 GHz 3.3 GHz 3.3 GHz 3.3 GHz & 3.3 GHz & 3.3 GHz &
2.x Ghz 2.x GHz 2.x GHz 2.x GHz
% of urban population covered(2) ~4.9% ~5.6% ~25.6% ~34.5% ~37% ~40%
% of city coverage (area) > 85%
23
(1) Rollout in progress Confidential & Proprietary
(2) This is a percentage of the urban population of the cities planned to be covered by Vertex
Not letting the lack of spectrum in the “standard” bands affect Wimax rollout
Industry Reactions Tata Comm. Action Forum Support
Yes, we can give Deploys/deploying 3.3GHz profile

“What is 3.3 Ghz largest “d” network
you “d” equipment
Wimax??!!!”
at 3.3
What do you
Yes we will publish Tata Comm places Publish
mean by orders with integration/IO
IOT and share data independent vendors
independent CPE standards beyond
for HL integration with full integration just MAC/PHY in “d”
in “d” ?
3.3 e!!! – come
3.3 e yes but at 5 RFQ floated and trials Create 3 Mhz profile
back after “don’t commenced in 3.3e
Mhz >> 3.3 e at 3Mhz
know how many
also
months”
24
Crystal Gazing, India market….circa 2013
Largest WiMAX subscribers will be in India :: ~ 30 mn BB subscibers

WiMAX contributing to 60+% of all Broadband connections
5-6 networks each having 60/70 Mhz spectrum
700 Mhz, 2.3, 2.5 and 3.3 Ghz networks live
3 Mhz, 5 Mhz and 10Mhz profiles deployed in India – adaptive channel size
selection
Quad band SS available at USD 20
In Summary, India promises to repeat the Mobile revloution?

Are you part of it or out of it?
25
Tata Communications – Taking Broadband to the masses with Wimax
26
Thank you
Prateek Pashine
June 16, 2008

Connecting A Continent With 802.16d - The Indian Experience

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Connecting a continent with 802.

Industry Leader State-of-the-art Customers

• #1 International and Enterprise data services in India

Global • Owned cable network across the globe: $1Bn investment

• #1 wholesale international voice provider

• Business largely focused on Wholesale and Enterprise

• Limited ownership of last mile

(1) Source : Industry Research; currency translated using 2003 US $ rate

0-14 yrs 15-59 yrs >60 yrs

40% 36 Increasing Literacy(3)

• Far superior roll-out mechanism with the advantage of existing

Voice Services: Digital mobile is 8X of fixed lines

Pay TV Services: Satellite leading the

WiMAX – Available now

• Spectrum available in the 3.3 GHz band

• Operators migrating from MMDS/LMDS at 3.3 Ghz to WiMAX

 Supplement Fiber roll-out in major  Primary access mechanism for

 Launched with 132 BTS in Dec 2007, currently 158

Current Status Q4, FY 08 FY 09 FY 10 FY 11 FY 12

Industry Reactions Tata Comm. Action Forum Support

Yes, we can give Deploys/deploying 3.3GHz profile

 Largest WiMAX subscribers will be in India :: ~ 30 mn BB subscibers

In Summary, India promises to repeat the Mobile revloution?

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Supplement Fiber roll-out in major Primary access mechanism for

Launched with 132 BTS in Dec 2007, currently 158

Largest WiMAX subscribers will be in India :: ~ 30 mn BB subscibers