demand and cooperation in telecommunication · 80% of iran’s income is generated by oil revenues....

Commercial in confidence

Demand and Cooperation in Telecommunication

Commercial in confidence Commercial in confidence

Evolution of Mobile Market

Mobile 1.0

Operator Portals Voice ,WAP, SMS

Interactions and

Downloads

Subscription Driven

Mature Market, Stable seeing decline in its “aged” products (e.g. ringtones)

Mobile 2.0

Mobile Internet Social Media Internet of Things

Mobile Connectivity

Subscription + Service + Ad founded +

Premium driven

Emerging Market, large untapped potential but with unclear monetization models OTT players

Interface Key Value Proposition

Business Model Key Trends


Data Usage is Rising

ARPU is dropping globally

Non-voice data is on the

rise

713 720 718 710 698 684

253 294

336 377

416 453

2010 2011 2012 2013 2014 2015 0

100

200

300

400

500

600

700

800

Global Data and Voice Revenues (US$)

Voice Revenues

Data Revenues

Global IP Traffic

Source: Cisco

Source: Ericsson


Growth of Value Added Services


Time Spent online is Changing

•Data is becoming the main growth driver in telecoms

27

17 16 14 12 11 10 9 9

3

05

1015202530

Min

utes

per

Day

(m)

UK Smartphone User's Minutes per Day - Activity Spend

Smartphone User's Total Minutes per DaySpent

Source: AT Kearney


Youth is becoming an important factor

$$$


What make Iran an attractive market now ?


Iran Demographics

Second Largest country in

Middle East, having a population of 77 million and the 4th largest market in Africa and the Middle East. Most Attractive

demographic in the region with >50% of the population under the age of 30. Internet penetration is

lower than other countries in the region but is growing in Urban areas ( 61% of people to Tehran with average utilization of around 1.2GB monthly)

Key Indicators 2009 2010 2011 2012 2013 2014 2015 2016 Populations [000] 74,200 75,090 75,920 76,750 77,600 78,450 79,310 80,180 Households [000] 14,990 15,170 15,337 15,505 15,677 15,849 16,022 16,198

0

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20000

30000

40000

50000

60000

70000

80000

90000

0

10

20

30

40

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60

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1990 1995 2000 2005 2010 2012 2015 2020

Population Demographics 1990-2020 Total Population Dependent Ratio Active Population % Youth Population %


Regulatory Environment

Iran’s latest 5-year plan puts emphasis on developing the telecommunications infrastructure and

ICT services in the country.

Creation of National Intranet , Phase 1 of the Europe-Persian Express Gateway Project, will lead to

more content being available and therefore increased usage.

3G/4G cellular Network providers deployed 3G and % 4G Network nationwide in Iran and Iran is

looking to be involve with 5G standard in coming years


Economic Environment

80% of Iran’s income is generated by Oil revenues.

Iran’s low national debt as compared to its GDP forms a strong foundation for solid growth in the upcoming years

Until recently (, Iran’s government used a price-fixing policy to regulate inflation, has decided to eliminate subsidies

which has lead to high inflation and lower disposable income per person. Fluctuating exchange rates

Sanctions as well as foreign governments discouraging trade with Iran have made it hard to source technology infrastructure and for foreign companies to do business with Iran

But on the other side, this has lead to enthusiastic demand to be independent, leading to remarkable advances in many technological fields (aerospace, biotech, power plant, oil etc) (strong capabilities and skilled workforce).

sanction will be removed and combination of Iranian high skill workforce and IT opportunities make Iran attractive country for foreign investor and advanced technologies


Social

Demand for internet subscriptions is strong.

Broadband penetration is low

Business demand for services especially mobile

data is growing

Willingness to pay for more lucrative data services

leading to increased levels of data usage.

Willingness to pay for latest devices

Most customers have multiple phones - Sim

penetration very high.


Some Technological facts

Iran’s fixed line penetration is one of the highest in the Middle East.

Competition exists in the ISP market with more than 1200 Internet Access Providers. Recently regulatory changed this a few internet providers to monitor their performance and qualities

Recently improvement in telecom infrastructure project such as TCI’s national backbone will help improve data and voice service quality.

Operator s in Iran has experienced high demand for its 3G/4G and WIFI products so far but has run into some difficulties in maintaining its quality of service, mainly due to Backhaul limitation.

EU, US and UN sanction currently hinder Operators from accessing lower priced equipment to roll out services in a more cost-effective way. But this will change after sanction removed and attract more Vendors and cost effective solutions for Iranian market.

Removing Government restrictions on content will increase ARPU and more potential for investment

specially in Broadband and Fibre.

As spending power increase ARPU will continue to be increase and more investment in telecommunication sectors in the short- to medium terms.


Macroeconomic Environment

• Iran’s latest 5-year plan puts emphasis on telecommunications infrastructure and ICT services. • 3G Tamin Telecom restriction removed and translate to increase of 3G coverage and 4G coverage nationwide in Iran by exiting operators and also room for new operator to enter to Iranian market

Regulatory •Iran’s foundation for solid growth in future years

Economic

•Demand for internet subscriptions is strong. •Broadband penetration is low •Willingness to pay for more lucrative data services (increasing levels of data usage) •Willingness to pay for latest devices •Most customers have multiple phones - SIM penetration very high.

Social •Iran’s fixed line penetration one of the highest in the Middle East •Recently developed TCI’s national backbone •Lack of developed 4G and small Cell networks •ARPU declines, only traditional voice and SMS services •Content restrictions slowly fad away

Technologic


ICT Network Readiness Comparison


Iran Telecom Market, space for more infrastructure and technology?

Company Name Ownership Market

Telecommunications Company of Iran (TCI)

Etemad Mobin (50% plus one share), Government (50%)

Fixed-line (local, domestic long distance, international), mobile, data operations

Taliya Rafsanjani Industrial Complex (RIC) Mobile (GSM900)

MTN Irancell MTN (49%), Iran Electronic Development Company (51%) Mobile (GSM900/1800)

Mobile Telecommunications Company of Esfahan (MTCE)

Telecommunication Company of Esfahan Province (51%), Axiata (49%)

Mobile (GSM900)

Telecommunication Kish Co. (TKC) LibanCell (100%) Mobile (GSM900), Internet (dial-up, WLAN)

Pars Online Private (100%) Internet (dial-up, ADSL, WiMAX)

Datak Telecom Private (100%) Internet (dial-up, ADSL, Wi-Fi, direct fibre), Residential VoIP


-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

Sep 12 Dec 12 Mar 13 Jun 13 Sep13F

Dec13F

Mar14F

Jun 14F Sep14F

Dec14F

Mar15F

Jun 15F

Monthly ARPU by Operator

MTCE (Mobile TelecommunicationsCompany of Esfahan)

MTN Irancell (MTN Group)

Taliya (Rafsanjan Industrial ComplexIslamic Cooperative Company)

TCI (Telecommunication Company ofIran)

Tamin Telecom

Source: Markets and Research – Iran Telecom Market 2013

Monthly ARPU by Operator


Our microenvironment analysis also underpins Iran as a ready market for other services

•Low competitive environment , offering a window of opportunity in the market. •Demand for high speed data already present, with a large percentage of Smartphone's despite no services for them.

• favourable demographic as economic factors would contribute to the success of broadband service in Iran prime locations or hotspots

•But there are uncertainties in the regulatory matters that needs to be considered.

•Demographic (high % of young population) and economic growth will drive high demand for broadband connectivity and penetration of data service.

Regulatory

Positive Drive factors for Broadband uptake

Demographics

Research data leads to Iran market as a...

Economic Growth

Market Demand

Disposable income

Telco Regulation

Equipment supply

Customer Behaviour

Broadband Technology


Opportunities and Constraints

Highly favourable demographics

High Proliferation of Wi-Fi enabled devices

Small number of competitive service offerings

Demand for services and connectivity

High subscriber growth

Government Controls and regulation over mobile

Wi-Fi spectrum, licenses and internet services are

uncertain and could limit growth of a lucrative

sector.

Economic factors was hinder investment but now

door open for investment

ARPU generated by mobile is lower than regional

market ARPU.

Availability of online content is low as compared

to other countries in the region but changes on

the way

Market for mobile data and services is growing

rapidly. Provide a great platform for future mobile

value added services.

Increase in mobile e-commerce sites and

applications like video-sharing etc.

demand and cooperation in telecommunication · 80% of iran’s income is generated by oil revenues....

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