Om Vikas

Fostering Indian ICT to Global Reach

India: At a Glance• Population - 1.10 billion• Over 150 Million middle class population• 20 – 30 million people joining India’s middle class every year• Increasing urbanization and raising expenditure• 4th largest Economy in the world with sustained GDP growth of over

8%; Growth rate of exports 32%• Fast growing Forex reserves - US$ 151 billion (2006)• IT and Electronics Production US$ 42 billion 5yr. CAGR:22%• Share of GDP: ~5%; Share of ICT in Exports: 20%• Gross Tele Density – 15.41 (40.5 million fixed & 129.5 million mobile =

170 Million) with addition of 6 million Mobile connections• Broadband Connections (>=256 Kbps) – 1.8 million • Internet Connections - 8 million• No. of PCs - 18 million• No. of TVs - 110 million• No. of Cable TV Connections - 60 million• International Connectivity - 360 Gbps/16.7Tbps (Designed)• National Connectivity - 10 Gbps (6.7 Lakh Kms)• International Gateways by ISPs - 25 (Including 5 on Submarine cables)

India: Strong Purchasing Power

• Purchases in a day in India– Cars: 2,416– Two wheelers: 35,264– PCs: 12,643– Laptops: 1,183– Gold: 1,918 Kg– Washing Machines: 4,274– TVs: 33,500– Fridges: 9,589– Air Tickets: 95,890 (Domestic);

24,657(International)

Growth Drivers

• Strong economic fundamentals• Increase in purchasing power• Growing market size• Intense competition• Lowering of interest rates• Growing Appetite for Bandwidth• Growing PC base, internet penetrations,

mobile handset• Large pool and growing quality

engineering and managerial manpower

Landmarks of Indian IT Industry

• Manpower Employed (March, 2006)– Hardware

• 420,000 direct & 800,000 indirect employment– Software & Services

• 1.3 million of which ITES 365,000• Share of GDP - 4.8% in 2005-06• Share of Total Indian Exports - 20% in 2005-06 (estimated)• Favourable demographic profile • High annual graduate turnout• Attractive employment prospects – beyond monetary

compensation292,000

195,354

103,44082,409

60,914 45,145

India China Japan Russia US SouthKorea

Undergraduate engineering degrees granted in 2003

Landmarks of Indian IT Industry

Production - 2005-06Growth CAGR (5yr.)

IT & Electronics - Rs. 1856 billion ($ 41.25b) - 21.8% 22%Hardware - Rs. 560 billion ($ 12.5b) - 10.9% 12.5%Software & Services - Rs.1296 billion ($ 28.8) - 27.2% 28%

Exports - 2005-06Growth CAGR (5yr.)

IT & Electronics - Rs. 1117 billion - 27% 28%( $25.3 billion )

Hardware - Rs. 85 billion - 6% 12%( $1.9 billion )

Software & Services - Rs. 1032 billion - 29% 30%( $23.4 billion )

of which ITES - Rs. 278 billion - 37%( $6.3 billion )

CALLING THE SHOTS

1994 | Private sector allowed to enter telecom

1995 | Govt grants two mobile licenses per circle

1997 | Regulator (TRAI) created by Act of Parliament

2002 | Third and fourth GSM operators enter fray

2003 | CDMA operators launch service

2003 | Incoming calls made free on mobile (CPP)

2004 (Oct) | Number of mobile connections crosses number of fixed connections

2007 (Feb) | 200-million phones mark reached

GSM 110.5 CDMA 45.87 Fixed Line 40.43 Total 196.8 *In millions Source : COAI, AUSPI, TRAI

Internet / Broadband Targets

20.040.020109.018.020073.06.02005

Broadband Subscribers

(Million)

Internet Subscribers

(Million)

Year ending

Reasons for Developing Economy

• Demography, Diversity and Democracy– Making Indian economy stronger

• Ability to adapt to the new economy – Knowledge Economy

• Traditional system of education with focus on mathematics and reasoning skills– Apt for IT Software and Services

• Missing the ‘Hardware Bus’ in 80’s created a zeal for some new achievements

Positive outlook for Indian ICT industry

• Still a preferred destination for outsourcing• New emerging areas: Financial Analysis, HR, Engineering Designs,

R&D etc.• IT Software & Services would cross US $ 60 billion by 2010• As per NASSCOM-McKenzie Report 2005 the IT Software Services

Market is US$ 300 billion and only ~ 10% is being tapped• DIT is collaborating with developed Nations to learn emerging

technologies and developing countries to share its experience with them in ICT4D

•• DonDon’’t Forget the Domestic Markett Forget the Domestic Market– USD 12+ Billion in FY 2006 (H/W + S/W) growing at 20%+ rate– Demand led by BFSI, Telecom, Government & Manufacturing sectors– More systems integration type deals– Large managed services deals from corporate– Innovative Business Models (Public Private Partnership)– ITES-BPO demand at a nascent stage

Global IT & ITES Industry

Source: IDC ResearchAll figures are in billion USD

OffshoreOffshore--able Marketable Market634 (2004) 634 (2004) 836836 (2007)(2007)

Offshored MarketOffshored Market39.6 (2004) 39.6 (2004) 7474 (2007)(2007)

IT Services pie expanding IT Services pie expanding at 5at 5--6%, BPO at 106%, BPO at 10--11%11%Offshoring of IT services Offshoring of IT services expanding fasterexpanding faster

Global Demand (IT + ITES)Global Demand (IT + ITES)847 (2004) 847 (2004) 1082 (2007)1082 (2007)

Relative Indicators

Access & Infrastructure

Parameters Korea Malaysia China India

No. of PCs per 100 78.6 15 2.8 1.8

No. of Cable TVs per 100 persons

43 0 9 6

No. of fixed telephonelines per 100 persons

51 18.5 18 4.5

No. of Mobile Phones 100 persons

75 43.9 18.3 13

InternetNo. of Internet connections per 100 persons

26 12 2.5 0.80

No. of users per 100persons

65.5 34 6.2 2.4

BroadbandNo. of Broadband connections per 100 persons

25 0.4 1.4 0.18

Charges for Broadband per month (US $)

30 29 16 15

5509654,00010,000Per Capita Income (US $ )

Indian IT & ITES Industry

• CAGR achieved during 2000-06: 31.0%

• CAGR needed during 2006-10: 25.7%

14-15

60+

USD Billion

CAGR 26-27%

Source: NASSCOM* Estimates for software and services only. Does not include estimates for hardware.

1.7 1.9 2.5 2.6 3.0 3.9 4.86.0

2.64.0

6.27.7

9.6

12.8

17.7

23.6

FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY10P

DOMESTIC MARKET*

EXPORTS*CAGR 24-25%

Quality Practices

• Emphasis on software engineering.• Alignment of Quality Management

System with the CMM and ISO framework.

• Acquisition of CMM certifications at progressive levels of maturity.

• India has far more SEI CMM Level 5 companies than any other country in the world.

Service Areas

Dealing with Key Challenges

• Growth with Quality– Digitization, Automation, Training, Process Mindset

• Security, Data Privacy, Business Continuity– Dedicated ODC, BS7799, SAS70 Compliance,

Background Check

• Talent Pool Generation and Retention– Industry and Educational Institute Collaboration– Innovative training methodology– Innovative HR practices– Continuous learning and growth opportunities

Factors influencing Broadband Penetration

• Access Cost • CPE prices• Availability of local language content • Value proposition for the users• Increasing demand for bandwidth hungry

applications• Bandwidth availability including international

bandwidth and its Cost• Applications/services (e.g. e-governance,

Telemedicine, entertainment) • Increased competition

Efforts made towards Broadband proliferation

• Progressive reduction in Call charges• Progressive reduction in NLD Bandwidth

charges• Progressive reduction in ILD Bandwidth

charges• Progressive reduction in CPE price• Building up of local language content• Establishment of NIXI• Establishment of Mirror Root Servers in India

(Delhi, Mumbai & Chennai)• More spectrum being made available to

service provider

Typical Cost for Broadband Access

• * Tariffs are for Mumbai and Delhi. • ~400MB data download limit (Source: Business Week India)

ISPs Basic Tariff Plan (Rs.) Areas Covered Technology

BSNL 250 (USD5.50)~ 177 DSL

MTNL 199 (USD4.50)~ 2* DSL

TATA VSNL 414 (USD9.25)~ 43 DSL

Bharti 250 (USD5.50)~ 7 States DSL

Hathway 275 (USD6.10)~ 8 Cable

Sify 550 (USD12.20)~ 58 DSL/Wireless

Major Broadband Players• Over 130 ISPs with VoIP license• Presently 14 provide Broadband connectivityService Provider Service Provider Technology _Technology _Bharat Sanchar Nigam Limited ADSLMTNL ADSLSify Limited Cable & Wireless VSNL ADSLReliance Communications Infrastructure Ltd. Wireless, ADSLBharati Infotel Ltd. Wireless, ADSLBG Broadband India Pvt.Ltd. CableHathway Cable & Datacom Pvt. Ltd. Cable IceNet.Net CableIn2cable (India) Ltd. Cable Hughes Escorts Communications Ltd. VSATAsianet Satellite Communications Ltd. CableTata Teleservices (Maharashtra) Limited Wireless, ADSL

International Outreach

• Supporting HRD for IT industry• E-Governance plan• National Data Centre and portal– with Thailand, Lao PDR, Vietnam, Nigeria,

Mauritius

ICT Cooperation with Europe, ASEAN, Japan and Other Countries

• ICT Cooperation for– Broadband initiatives– Information Security and Network

Administration– Mutual Recognition Agreement for

qualification purpose– Cyber security and information assurance

R&D Activity ( illustrative )

IIT Bombay, Delhi, Kharagpur, Kanpurand many more

OthersUWBBELXDSLSASKENOptical networking TEJASWireless productsTeNet

IP based Products, Wireless, BPLC-DACWireless (WiMax)C-DOTNGN,4GCEWiT

ActivityActivityOrganisationOrganisation

Thrust Areas

• Broadband technologies• IP based networks and devices• Compression technologies• Broadband/Smart Antennas• Next Generation Wireless Technologies

Opportunities for Cooperation

• A few Industries working in the area of Broadband: – Tata Consultancy Services– Tejas Networks India Limited– Sasken– Coral Telecom– Maksat Technologies– TVS Electronics Limited

Contd…

Opportunities for Cooperation

• Industry Associations:– Telecom Equipment Manufacturers

Association of India (TEMA)– Internet Service Providers Association of

India (ISPAI)– Confederation of Indian Industries (CII)– Federation of Indian chamber of commerce

and Industry (FICCI)

Modalities of Cooperation

• Joint Venture• Joint R&D• Transfer of Technology from either side• Strategic business tie-ups• Sharing of experience in Broadband roll

out, business models and technologies deployed

Conclusion

• Collaborating with various Developed and Developing countries in ICT sector

• Open to share our success stories of ICT and provide expertise and vice versa

• Helping the IT industry to foster its business avenues and trade through International Cooperation

• Institutions like CDAC, NIC, STPI, DOEACC helping DIT to implement specific projects under international cooperation

Thank Youdirector@iiitm.ac.in