FORUM ON NEXT GENERATION STANDARDIZATION
(Colombo, Sri Lanka, 7-10 April 2009)
Marketing & NGN: Contextualizing to
Emerging market needs
Mohan Krishnan,
IMRB International
Colombo, Sri Lanka, 7-10 April 2009
Agenda
What is Anywhere?
Emerging market situation:
Case of India
Implications for NGN rollout and
marketing
Colombo, Sri Lanka, 7-10 April 2009
2
Who are we?
One of the oldest Market Research
company in South Asia – IMRB,
LMRB & part of £7.5 Bill WPP Group
Plc.,
Partnering in India & Middle East
with Yankee Group, official industry
Analyst for ITU
Colombo, Sri Lanka, 7-10 April 2009
3
What Is Anywhere?
Our vision for
how ubiquitous
connectivity
transforms
consumers,
enterprises and
the world we
live in.
Colombo, Sri Lanka, 7-10 April 2009
4
Anywhere Is a
Revolution
Battles underway
and ahead will
transform the
world we live in.
It will bring the
largest technology
change in our
lifetimes.
Colombo, Sri Lanka, 7-10 April 2009
5
Anywhere Will Surpass the Internet’s
Impact
Internet:
Internet:
1995 to
to 2005
1995
2005
Anywhere:
2005 to 2015
Place
Place
Work and home
Work and home
Anytime and
anywhere
Device
Device
PC
PC
Any device
Connectivity
Connectivity
Narrowband
Narrowband
NGN Broadband
People affected
billion
11 billion
(2005)
(2005)
2 billion
(2012)
People affected
Colombo, Sri Lanka, 7-10 April 2009
6
The Anywhere revolution includes
major battles underway
Colombo, Sri Lanka, 7-10 April 2009
7
The Anywhere network must serve
multiple masters
Colombo, Sri Lanka, 7-10 April 2009
8
Anywhere is causing a new kind of
customer to emerge
Colombo, Sri Lanka, 7-10 April 2009
9
The Five anywhere consumer
segments
Actualized Anywheres are
the most Anywhere in their
behaviors
Outlet Jockeys are Anywhere
on the go, but not at home
Digital Shut-ins are
somewhere at home
Technophytes are later
adopters, driven by price cuts
Analogs are uninterested in
technology but will grudgingly
be pulled along—eventually
Colombo, Sri Lanka, 7-10 April 2009
10
Consumers’ Anywhere behaviours are
in transition
Connectivity behaviors are
undergoing change in all
regions as new services
emerge
These are more powerful
differentiators than
conventional demographic
segmentation methods
Providers of services must
understand the varying
needs and attitudes of
consumers in their market,
and tune offers differently
Colombo, Sri Lanka, 7-10 April 2009
11
Anywhere is transforming workplace
too
Colombo, Sri Lanka, 7-10 April 2009
12
The Three Stages of Anywhere
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13
Where Will Anywhere Happen?
16 countries reach the Anywhere tipping point by 2012
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14
Emerging Market lessons
“India” – a case in point
Colombo, Sri Lanka, 7-10 April 2009
India : One of the few growth markets
this year
India likely to overtake
Italy, France and
Germany’s GDP by 2015
Indian economy would be
performing better than
Brazil and Russia in this
front.
30% of India’s population
will be between 25-44 years
of age in 2020
The young and earning age
offers huge potential
Percentage Distribution By Age
2020
27
2010
29.4
20.51
29
21
Years
2005
2001
33
0%
Below 14 yrs
Colombo, Sri Lanka, 7-10 April 2009
17
32
17
6.4
29.3
15.66
5.67
28.29
15.51
5.3
16
5
20
20%
15 to 24
26
40%
60%
Percentage
25 to 44
45 to 65
80%
100%
65 & above
16
Growing top 3 segments
2006-07
2001-02
A huge base
2.6 mln HHs
15 mln
people
THE VERY RICH
5.2 mln HHs
30 mln
people
THE CONSUMING CLASS
76 mln HHs
432 mln people
46 mln HHs
265 mln people
74 mln HHs
429 mln
people
33 mln HHs
192 mln people
24 mln HHs
140 mln people
Colombo, Sri Lanka, 7-10 April 2009
THE CLIMBERS
82 mln HHs
472 mln
people
THE ASPIRANTS
THE DESTITUTE
Source : Indian Market Demographics, NCAER
20 mln HHs
117 mln people
17 mln HHs
95 mln people
17
The Internet Usage Hierarchy
In Millions
250
Urban Population
205
Literate Population
85
English Knowing
72
PC Literates
A Sept 2008 study by IMRB
estimated Internet user in
rural India at 5 million (out of
750 million)
50
Ever used Internet
36
Active User
0
50
Source: I-Cube 2008, IMRB International
Colombo, Sri Lanka, 7-10 April 2009
100
150
200
250
18
Internet user market
In Millions
59
72
•
A Internet Ever User defined as one who has ever accessed
Internet
•
This population is already higher than the population of
countries like UK, Canada, South Africa, Spain, etc.
62
52.9
50
42.2
Base: All India Estimates
Source: I-Cube 2008
42
36
32.2
30.8
29
21.1
16.4
15.8
4.9
2000 2001 2003 2004 2006 2007 2008
Knows Computers
2.2
2000 2001 2003 2004 2006 2007 2008
Colombo, Sri Lanka, 7-10 April 2009
Source: I-Cube 2008, IMRB International
8.7
11.9
Internet Ever User
4.3
7.5
11.2
2000 2001 2003 2004 2006 2007 2008
Active Internet User
19
Application usage has diversified
significantly in recent times
Purpose of Internet Access
Percentage of Urban Users
E-mail
91%
General information search
76%
Educational information search
49%
Text Chat
46%
Online Gaming
41%
Online jobsites
37%
Music/Video on the Internet
32%
Financial information search
21%
Book railway tickets on the Internet
21%
Online banking
20%
Online NEWS
13%
Internet Telephony/Video Chat/Voice Chat
13%
Source: I-Cube 2008, IMRB International
Colombo, Sri Lanka, 7-10 April 2009
20
E-commerce is growing rapidly
2006-07
(USD Million)
2007-08
(USD Million)
Online Travel Industry
1100
1400
Online Non-Travel Industry
316
442
eTailing
170
221
Online Classifieds
108
164
4
6
34
51
1416
1842
MARKET SIZE FOR THE YEAR
Paid Content Subscription
Digital Downloads
B2C/ C2C E-Commerce Market
Source: I-Cube 2008, IMRB International & IAMAI
Colombo, Sri Lanka, 7-10 April 2009
21
Public access has been the main
reason for growth of user base
100%
80%
3.1 mn
4.9 mn
7.5 mn
8%
6%
3%
4%
2%
3%
2%
5%
2%
6%
2%
7%
1%
8%
19%
20%
20%
22%
25%
27%
30%
26%
39%
36%
37%
2006
2007
2008
30%
60%
30%
23%
27%
22%
13.2 mn
17.9
mn
1.4 mn
31%
15.4 mn
40%
20%
43%
44%
2000
2001
52%
46%
0%
Cyber café
2003
Home
2004
Office
School/College
Others
Source: I-Cube 2008, IMRB International
Colombo, Sri Lanka, 7-10 April 2009
22
However, network deployment lags
demand
Access Points
Desktop/Laptop
Available
Internet
Usage/connection
% penetration
~ 54 mn
7.6 mn
14%
Mobile
(GRPS/Edge)
400 million
(88.27 million
enabled)
6-8 million
<2%
(8-10% of
enabled)
Cyber Cafes
0.166 million
0.166 million
100%
32,145
25,000-26,000
75-80%
6.27 million
200
Negligible
Common Service
Centres of Govt.
PCOs
Source: IMRB analysis
Colombo, Sri Lanka, 7-10 April 2009
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And, BB deployment target continues
to be missed
25
20
20
15
9
10
5
Target number of
Broadband users (in mn)
9.9% MoM
0.1
0.4
2003
2004
3
1.3
3.1
2.1
4.4
Achieved number of
Broadband users (in mn)
5.8
0
India
2005
2006
2007 Jun-08 Feb09
2010
Source: CII-IMRBIBM study 2004
Technology share in Broadband penetration
Technology
DSL
Cable
Ethernet
Fiber
Radio+Other
Mar 2007
83%
10%
3%
1%
3%
Sep 2007
81%
12%
4%
1%
2%
Sep 2008
86%
9%
2%
1%
2%
Colombo, Sri Lanka, 7-10 April 2009
Source:
TRAI
24
Policy makers in emerging markets will be
forced to give priority to BB growth
Congress Manifesto: All
villages connected to
broadband in next three
years.
BJP Manifesto: Create 1.2
million IT-enabled jobs in
rural areas, drastic
reduction in computer
prices, broadband
connectivity to every village
in five years. Promote ‘open
standard’ and ‘open source’
software.
Colombo, Sri Lanka, 7-10 April 2009
25
LLU & BB
Between 2004 to 2007 the numbers of wireline telephone
connections have reduced from 40 mn to 33 mn.
Connections in urban areas have reduced from 26 mn to 22
mn
With only 25% of network having ability to deliver BB, we can
add best add 3.5 million BB subcribers
This year, BSNL launched an initiative to offer wireline
connections bundled along with broadband services in
Bangalore. Result: 0.1 mn new connections out with 60%
BB subscribers.
Connections (mn)
38
39
38
37
36
35
34
33
32
31
30
Rs 120 trillion loss since 2004
33
Wireline with LLU/broadband
coupled
Colombo, Sri Lanka, 7-10 April 2009
Wireline presently without
LLU/ broadband coupled
26
USOF
The USOF has about USD 1.5 billion in
undistributed funds (In 2009)
Source: LIRNAsia
Need innovative mechanisms to
enable direction of funds to BB
Colombo, Sri Lanka, 7-10 April 2009
27
Shared access through Govt. intervention in
rural markets: CSC – Common Service
Centre
National eGovernance Plan (NeGP) envisions a
“web-enabled Anytime, Anywhere access” to
information and services in rural India
100,000 CSC to be rolled out
Govt. saved money in PPP auction given enthusiasm of
private players
BB connectivity is a big issue
Multiple technologies being deployed which will create
problems later
Chicken-egg issue – connectivity & content
History of past failure – need to provide a lesson
Colombo, Sri Lanka, 7-10 April 2009
28
One key message:
Colombo, Sri Lanka, 7-10 April 2009
Emerging Markets Do Not Support Traditional
Subscriber-Centric Business Models
ARPU or Equivalent
Value in the Subscriber
Verizon Wireless
Sprint
H3G
Vodafone
Vonage
TIM
China Mobile
Value in the Community
Yahoo!
eBay
Facebook
Skype
YouTube
Google
Sling Media
Source: Company Annual Reports and Yankee Group
Colombo, Sri Lanka, 7-10 April 2009
Number of Users
30
More important to drive value from
community – mobile tariff example
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MVAS ecosystem provides some clue
to drive utility of NGN
Rs. 1 cr = 10 Million, 1 USD~ Rs.50
Colombo, Sri Lanka, 7-10 April 2009
Source: IMRBIAMAI study,
June 2008
32
Marketing implications for the Next
Gen Networks providers
Colombo, Sri Lanka, 7-10 April 2009
Guidelines for Technology vendors &
Service providers
Develop your solutions to address price sensitivity in
the Indian market.
Incorporate robust professional and managed service
capabilities into the market solutions.
Design solutions that can overcome deficiencies in
supporting infrastructure, such as electricity and
available backhaul solutions.
Anticipate and capitalize on opportunities that will
emerge as low-cost network computing devices
become available.
Capitalize on opportunities to export capabilities
developed in India to other emerging markets.
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34
Guidelines for Technology vendors &
Service providers
Recognize the strong correlation between
broadband penetration and economic prosperity.
This necessitates accelerated licensing and a
focus on enabling technology.
Seed opportunities to commercialize universal
service initiatives in rural areas. Initiatives such
as eHealth and distance learning have broad
applicability across many emerging markets.
Aim for rural broadband initiatives to bolster
existing industries.
Colombo, Sri Lanka, 7-10 April 2009
35
Thank You
Mohan.Krishnan@imrbint.com
Colombo, Sri Lanka, 7-10 April 2009