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2008 Tata Communications, Ltd. All Rights Reserved.
Prateek Pashine
June 16, 2008
Confidential & Proprietary
Connecting a continent with 802.16dThe Indian Experience
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Safe Harbor Statement
Certain words and statements in this presentation concerning Tata Communications and its prospects, and other statements including those relatingto 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, includingfinancial, 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-lookingstatements include, among others, failure to increase the volume of traffic on Tata Communications network, failure to develop new products andservices that meet customer demands and generate acceptable margins, failure to successfully complete commercial testing of new technology andinformation systems to support new products and services, including voice transmission services, failure to stabilize or reduce the rate of pricecompression on certain of the companys communications services, failure to integrate strategic acquisitions and changes in 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 suchforward-looking statements, many of which are not in Tata Communications control, include, but are not limited to, those risk factors discussed inTata Communications various filings with the United States Securities and Exchange Commission. These filings are available at www.sec.gov. TataCommunications is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements.
12 JAN 2008
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An Introduction to
TataCommunications
Broadband Current India
Perspective
WiMAX :: TheAnswer
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Tata Communications Leadership Landscape
State-of-the-artInfrastructure
200,000 route km globalnetwork
300 points of presence (PoPs)
20+ terabit submarine capacity
~1M sq. feet of data centerspace
Customers
1,500 global carriers
600 mobile operators
Fortune 1000 of India
5,000+ SMEs in India
500,000 Internet andbroadband subs
Industry Leader
#1 global wholesale voice
#1 global submarine cablecapacity
#1 intnl. long distance servicesin India
#1 enterprise data services inIndia
#1 Internet services in India
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Our Strengths
#1 International and Enterprise data services in India
Relationships with Top 2000 enterprises in India includingFortune 500 companies
Best connectivity to India and expanded reach within
IndiaEnablement
GlobalSubmarine &
IP Reach
Owned cable network across the globe: $1Bn investment
Tier-1 Global IP Network and leading ISP in India
Unique assets and connectivity in Asia, Middle East, Africa
Integrated
WholesaleServices
#1 wholesale international voice provider
Suite of voice, data, IP, signaling and outsourcing services
Over 1500 carrier relationships including 600+ mobileoperators
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Our Weaknesses & hence opportunities
Business largely focused on Wholesale and Enterprise
Legacy retail restricted to Dialup Internet
No retail voice businessCustomer
Base
Last Mile
Network
Limited ownership of last mile
Prohibitive cost of buried network
No LLU
No Legacy
voicespectrum
No 2G / voice spectrum
MMDS / LMDS spectrum available at 2.7 and 3.3 Ghz
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2008 Tata Communications, Ltd. All Rights Reserved.
Prateek Pashine
June 16, 2008
Confidential & Proprietary
The Broadband
opportunity in India
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1.7%1.3%1.8%
5.5%5.9%
0.9%
2.5%
7.5%
8.9%
0%
2%
4%
6%
8%
10%
China
US
India
Japan
Brazil
Russia
UK
Germany
France
3,1483,6033,7825,8706,0746,673
35,165
44,453
27,803
0
10,000
20,000
30,000
40,000
50,000
China
US
India
Japan
Brazil
Russia
UK
Germany
France
GDP (US$bn) GDP CAGR (2005-2050E)
1,140
961
797
640
0
300
600
900
1,200
FY04 FY07 FY08E FY10E
Per Capita Income (US$)
CAGR : 10%
Rural
All India
Urban
0
250
500
FY95 FY90 FY95 FY00 FY05 FY10E FY15E FY20E FY25E
Avg HH disposable incomeRupees (000)
CAGR CAGR
4.6%
3.6%
2.8%
5.8%
5.3%
3.6%
Third Largest Economy by 2050Third Largest Economy by 2050(1)(1) With Highest Projected Growth RateWith Highest Projected Growth Rate(1)(1)
Increasing Per Capita IncomeIncreasing Per Capita Income(2)(2) Increasing Household Disposable IncomeIncreasing Household Disposable Income(3)(3)
India: Strong Economic Fundamentals
(1) Source : Industry Research; currency translated using 2003 US $ rate(2) Source: Street research & RBI website(3) Source: McKinsey Report: The Bird of Gold dated May 2007
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India: Favorable Demographic Shift
Favorable Shift in Income ProfileFavorable Shift in Income Profile (1)(1)
Increasing LiteracyIncreasing Literacy(3)
Growing Work Force (15Growing Work Force (15--59 yrs)59 yrs)(2)(2)
35% 32% 29% 27% 25% 23%
64% 64% 64%
9% 11% 12%
63%60%58%
8%8%7%
0%
25%
50%
75%
100%
FY 2001 FY 2006 FY 2011E FY 2016E FY 2021E FY 2026E
% of
population
0-14 yrs 15-59 y rs >60 yrs
54
35
22
41
43
36
4
19
32
1 1
8
21
0%
20%
40%
60%
80%
100%
FY 2005 FY 2015E FY 2025E
Deprived (Rs. 1,000,000 pa)
% literate population
3643
55
75
0
10
20
30
40
50
60
70
80
FY 1981 FY 1991 FY 2001 FY 2011E
% of population
(1) Source: Mckinsey Report May 2007 (Income levels are at real 2001 prices)(2) Source: The National Commission On Population May 2006(3) Source: India stats website; 2011 rate is Indias 10th Economic Plan objective
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Total PopulationTotal PopulationTotal Population
Addressable Urbanpopulation
Addressable UrbanAddressable Urbanpopulationpopulation
People with Phone (Wireline/Wireless) connections
People with Phone (Wireline/People with Phone (Wireline/
Wireless) connectionsWireless) connections
Cable/ Internet/ BroadbandConnections
Cable/ Internet/ BroadbandCable/ Internet/ Broadband
ConnectionsConnections
Population 1.2 billion
PhoneConnections300 million
CableConnections80 million
FixedConnections
40 millionInternetConnections
9.2 million BroadbandConnections
4 million
Internet
User70 million
India Huge Internet Potential
Urban Population
300+ million
Provisioning of wireless technology would enable conversion of addressable market into subscribersProvisioning of wireless technology would enable conversion of aProvisioning of wireless technology would enable conversion of addressable market into subscribersddressable market into subscribers
Source : TRAI, IAMAI, Management estimates (Estimates for September 2007)
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India Huge Internet Potential
CurrentImpediments
for growth
Poor infrastructure & support No LLU
Legacy network with long loop lengths
Unorganized cable infrastructure with poor network
2G + services in the country
High Buried Access Costs
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
Wireless to bethe technology
for choice
Far superior roll-out mechanism with the advantage of existinginfrastructure of wireless telecom players
Spectrum auction likely in near term Transforming the Indian industry
Potentially large coverage and faster expansion
Wireless is the best technology to drive internet growth in IndiaWireless is the best technology to drive internet growth in India
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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 theintroduction of digital TV
Analog cable prevalent since mid nineties
Government mandates conditional access inmetros
Satellite (DTH) services achieve 5% share in ayear 3 new players entering the market
Broadband ???
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Wire(d)less WIMAX to the fore!!
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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 technology option - need catalyst to fuel the deploymentPromising technology option - need catalyst to fuel the deployment
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WiMAX in India Current Scenario
RegulatoryScenario
Spectrum available in the 3.3 GHz band
6 players with 12 Mhz
1 player with 14 Mhz
CPE cannot be sold to subscribers
Royalty for BTS and for every CPE on an annual basis
2.x GHz auction expected in FY 2008-09
Deploymentstatus
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
Launched its services in Bangalore with 7 K active subs
Aircel and Reliance: Offer to enterprises has been rolled out in 8-10 cities
Others trialing WiMAX gear
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WiMAX in India
Tata Communications takes the lead!!!
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Market needs | WiMAX in India
Businesses
Supplement Fiber roll-out in majormetros
Expand access reach (~ E1) to allmajor business towns
Current Status: >35 towns
March 2009: 115 towns
Consumers
Primary access mechanism forBroadband
Provide reliable 1Mbps experience+ content/apps
Current Status: 1 city
March 2009: 15 cities
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Bangalore :: Retail WiMax Roll out Details, Indias first ALL CITY coverage ofWiMAX
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
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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
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Bangalore City Clusters
Cluster 4
Cluster 3
Cluster 2
Cluster 1
Cluster 0
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Overall Coverage
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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
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Sample Pictures - BTS & SS
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FY 2008 FY 2009 FY 2012Roll-Out Plan
Top 40-50 Cities (1)
> 100 Cities(1)
5-7 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
2.x Ghz
3.3 GHz &
2.x GHz
3.3 GHz &
2.x GHz
3.3 GHz &
2.x GHz
% of urban population covered(2) ~4.9% ~5.6% ~25.6% ~34.5% ~37% ~40%
% of city coverage (area) > 85%
(1) Rollout in progress(2) This is a percentage of the urban population of the cities planned to be covered by Vertex
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Not letting the lack of spectrum in the standard bands affect Wimax rollout
Tata Comm. ActionForum SupportIndustry Reactions
Yes, we can giveyou d equipmentat 3.3
3.3GHz profileDeploys/deployinglargest d networkWhat is 3.3 Ghz
Wimax??!!!
What do youmean byindependent CPEin d ?
Yes we will publishIOT and share datafor HL integration
Publishintegration/IOstandards beyondjust MAC/PHY in d
Tata Comm placesorders withindependent vendorswith full integration
3.3 e!!! comeback after dontknow how manymonths
3.3 e yes but at 5Mhz >> 3.3 e at 3Mhzalso
Create 3 Mhz profileRFQ floated and trialscommenced in 3.3e
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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 sizeselection
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?
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Tata Communications Taking Broadband to the masses with Wimax
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