A Dissertation report On

Analysis of Sales of Mobile Broadband Data Cards To identify the Market Leader in the USB based Mobile Broadband Service

Under the Guidance of Miss Mamta Sharma

As a Partial Fulfillment of Full Time MBA Telecom Management Programme (2010-12) of

Amity Institute of Telecom Technology and Management, Amity University

SUBMITTED TO: Miss Mamta Sharma Assistant Professor (MBA Telecom)

SUBMITTED BY: KUMAR KISHORE KALITA A1603710041 Batch 2010-12

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CERTIFICATE

This is to certify that the dissertation done on Analysis of Sales of Mobile Broadband Data Cards To identify the Market Leader in the USB based Mobile Broadband Service, submitted to Amity Institute of Telecom Technology & Management by Kumar Kishore Kalita in the partial fulfillment of the requirement for the award of degree of MBA Telecom, is a bonafide work carried out by her under my supervision and guidance. This work has not been submitted anywhere else for any other degree / diploma.

Date:

Ms. Mamta Sharma Asst.Prof. (MBA TELECOM) AITTM, AMITY UNIVERSITY I

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ACKNOWLEDGEMENT

I, Kumar Kishore Kalita, state my sincere gratitude to Prof. Dr. Marshal Sahni HoD, MBA-Telecom AITTM, Amity University for giving me this opportunity to conduct a research work during my curriculum of MBA. I express my cordial gratefulness to Miss Mamta Sharma for providing me guidance, valuable advice, constant encouragement and necessary facilities to complete this project. I put across my heartfelt thanks to all faculty members of AITTM for their kind support and knowledge

II
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DECLARATION

This Dissertation Report is submitted in partial fulfillment of the requirement for the award of degree of MBA Telecom at Amity University. I declare that this Dissertation Report is my own work and it does not contravene any academic offence as specified in the Universitys regulations. I confirm that this Dissertation Report does not contain information of a commercial or confidential nature or include personal information other than that which would normally be in the public domain unless the relevant permissions have been obtained.

Name: Kumar Kishore Kalita Date: Program: MBA (Telecom) Marketing

III
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TABLE OF CONTENTS CERTIFICATE. I ACKNOWLEDGEMENT II DECLARATION.. ....... III Contents Chapter 1: Introduction 1.1. Introduction to Broadband Industry 1.2 Dissertation Background 1.3 Objective of Dissertation 1.4 Rationale for Dissertation 1.5 Dissertation Plan 1.6 Limitations of the Dissertation Chapter 2: Literature Review Chapter 3: Research Methodology 3.1 Research Design 3.2 Defining Data and Sources of Data 3.3 Methods of Data Collection 3.4 Analysis of Collected Data Chapter 4: Presentation and Analysis of data Chapter 5: Conclusion and Suggestions Chapter 6: Bibliography Chapter 7: Annexure Questionnaire Details of Retailers Page Number 2 3 22 25 26 28 29 30 77 78 80 81 82 84 86 88 90 91 92

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CHAPTER 1 INTRODUCTION

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1.1

GENERAL INTRODUCTION: BROADBAND INDUSTRY

Telecom Industry Overview Background of Telecom Industry The Indian Telecommunications network is the third largest in the world and the second largest among the emerging economies of Asia. Today, it is the fastest growing market in the world. The telecommunication sector continued to register significant success during the year and has emerged as one of the key sectors responsible for Indias resurgent Indias economic growth. Growth in Telecom Sector This rapid growth has been possible due to various proactive and positive decisions of the Government and contribution of both by the public and the private sector. The rapid strides in the telecom sector have been facilitated by liberal policies of the Government that provide easy market access for telecom equipment and a fair regulatory framework for offering telecom services to the Indian consumers at affordable prices. Types of Services: Wire line Vs Wireless It has also undergone a substantial change in terms of mobile versus fixed phones and public versus private participation. The preference for use of wireless phones has also been predominant in the sector. Participation of the private entities in the telecom sector is rapidly increasing rate there by presenting the enormous growth opportunities. There is a clear distinction between the Global Satellite Mobile Communication (GSM) and Code Division Multiple Access (CDMA) technologies used and the graph below shows the divide between the two. Segment wise Status Wire line Services With increasing penetration of the wireless services, the wire line services in the country are becoming stagnant. On the other hand, Broadband demand has picked up and promises to stabilize fixed line growth.

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GSM Sector In terms of the Global System for Mobile Communication (GSM) subscriber base this now places India third after China and Russia. China had 401.7 million GSM subscribers.

Fig: GSM Service Providers in India.

CDMA Services CDMA technology was introduced in India as a limited mobility solution. The introduction of CDMA services has created competition, lowered tariffs and offered many citizens access to communication services for the first time.

Fig: CDMA Service Provider.

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Market size of Telecom Industry in India The sale of mobile devices in India will show of rise of 8.5 per cent in 2012 by growing up to 231 million units from 213 million units last year, according to a research report from Gartner. The research firm says that the Indian mobile handset market is expected to show steady growth through 2015 when end-user sales will surpass 322 million units. The Indian mobile device market is very competitive with more than 150 manufacturers. Smartphone sales in India made up 6 per cent of device sales in the first three quarters of 2011, and this share is expected to increase to 8 per cent in 2012. The Indian mobile device market is driven by the lowest call rates in the world and dominated by low-cost devices, which account for 75 per cent of sales in India in 2011. Manufacture of Telecom Equipment Rising demand for a wide range of telecom equipment, particularly in the area of mobile telecommunication, has provided excellent opportunities to domestic and foreign investors in the manufacturing sector. The last two years saw many renowned telecom companies setting up their manufacturing base in India. Ericsson has set up GSM Radio Base Station Manufacturing facility in Jaipur. Elcoteq has set up handset manufacturing facilities in Bangalore. Nokia set up its manufacturing plant in Chennai. LG Electronics set up plant of manufacturing GSM mobile phones near Pune. The Government has already set up Telecom Equipment and Services Export Promotion Forum and Telecom Testing and Security Certification Centre (TETC). A large number of companies like Alcatel, Cisco have also shown interest in setting up their R&D centers in India. With above initiatives India is expected to be a manufacturing hub for the telecom equipment.

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OVERVIEW OF SERVICES: TELECOMMUNICATION SECTOR IN INDIA

TELECOM SECTOR

WIRELINESERVICES WIRELESSSERVICES

VOICESERVICE

DATASERVICE VOICESERVICE

BROADBANDWIRELESS ACCESS

LANDLINES INTERNETSERVICE GSMSERVICE

MOBILEBROADBAND SERVICE 2Gand3G

CDMASERVICE

WIMAXSERVICE 4G

LTESERVICE 4G

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INTERNET IN INDIA:
Internet Services in India Internet services were launched in India on August 15, 1995. In November 1998 the government opened up the sector to private operators. A liberal licensing regime was put in place to increase Internet penetration across the country. The growth of IP telephony or grey market is also a serious concern. Government loses revenue, while unlicensed operation by certain operators violates the law and depletes licensed operators market share. New services like IP-TV and IP-Telephony are becoming popular with the demand likely to increase in coming years. The scope of services under existing ISP license conditions is unclear. Internet country code: .in Internet Service Providers (ISPs): 180 (2010) Internet hosts: 4,536,000; Internet users: 121 million; Broadband Internet users: 13 million (October 2011) Internet access in India is largely provided by the private sector and two state-run companies and is available in a variety of forms, using a variety of technologies, at a wide range of speeds and costs. The country has the world's third largest Internet users with over 121 million users (of whom 59% who only access the internet via mobile devices) as of December 2011.However, the Internet penetration in India is one of the lowest in the world and only accounts for 8.4% of the population compared to OECD counties where average penetration rate is over 50%. The number of broadband Internet subscribers in India has started to become more significant, having more than doubled in the two-year period to end-2009. DSL, whilst holding slightly more than 75% of the local broadband market, was steadily losing market share to other non-DSL broadband platforms, especially to wireless broadband platforms. The 3G auction was followed by an equally high profile auction of 4G spectrum that set the scene for a competitive and invigorated wireless broadband market. The growth in number of broadband connections in India has accelerated since 2006. As of October 2011, total broadband Internet connections in India had reached 13 million constituting 1.0% of the population. India has one of the lowest penetrations of broadband connectivity in the world. A number of private Internet Service Providers (ISPs) offer services in India, many with their own local loop and gateway infrastructures. BSNL and MTNL have continued to
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dominate the ISP market because of their existing massive copper infrastructure in the last-mile across the nation. An estimated 60% of Internet users were still regularly accessing the Internet via the country's more than 10,000 cybercafs. According to International Telecommunication Union, the international average broadband speed is at 5.6 Mbps, whereas in India the average speed hovers at 256 kbit/s which is the minimum speed set by TRAI. The government declared 2007 to be "the year of broadband." Four years later, Indian broadband failed to deliver download speeds of which other developed nations delivers. South Korea led the list with an average of 43 M bit/s, followed by Japan (10.6 M bit/s) and United States (4.6 M bit/s). India broadband growth is hampered by various challenges, including a complicated tariff structure, metered billing, higher charges for right of way and absence of local-loop unbundling. Average Internet speed in India is as low as 0.8Mbps.Out of the total Internet population 35% are still below 256Kbps.To compete with international standards of defining broadband speed the Indian Government has taken aggressive step of proposing the $13 billion national broadband network to connect all cities, towns and villages with a population of more than 500 in two phases targeted for completion by 2012 and 2013.The network will be capable of handling speed up to 10Mbps in 63 metropolitan areas and 4Mbps in additional 352 cities. MOBILE BROADBAND Mobile broadband is the marketing term for wireless Internet access through a portable modem, mobile phone, USB Wireless Modem,(called "cell phones" in North America and South Africa) or other mobile devices. Description Although broadband has a technical meaning, the phrase "mobile broadband" is a wireless carrier marketing term for Internet access. Bit rates of broadband support voice and video as well as other data access. Devices that provide mobile broadband to mobile computers include: PC cards also known as PC data card or Connect cards, USB modems, USB sticks often called "dongles", and portable devices with built-in support for mobile broadband (like notebooks, net books and Mobile Internet Devices). Notebooks with built-in mobile broadband modules are offered by many laptop manufacturers. The GSM Association of telecommunication manufacturers, mobile phone producers, integrated circuit manufacturers and notebook manufacturers have joined forces to push built-in support for mobile broadband technology on notebook computers. The association established a service mark to identify devices that include Internet connectivity with devices not usually associated with it North America refers to mobile phones as cell phones. However all non-satellite mobile access technologies are cellular designs, but only CDMA-1 (EVDO related), GSM
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(GPRS/EDGE), UMTS/WCDMA/3G/FOMA/T-CDMA (HSDPA, HSUPA, HSPA, HSPA+) were originally intended for voice telephone calls. LTE and Mobile Wimax are data only, using VOIP for voice. Flash-OFDMA, IPW (derived from CDMA) and iBurst are also Data only networks. In theory also you could have an ERAN based EDGE2 network with no GPRS or GSM voice. Voice and SMS pays for the mobile phone networks. Various network standards may be used, such as GPRS, 3G, Wimax, LTE, Flash-OFDM, IPW, iBurst UMTS/HSPA, EV-DO and some portable satellite-based systems. However mostly the term refers to EVDO (sister system to CDMA-1), EDGE on GSM and HSPDA/HSUPA/HSPA on UMTS/3G/Foma. Such systems piggyback on the mobile phone infrastructure (EDGE, HSPA etc. actually share spectrum with voice calls, which have priority). The actual "non-Mobile Phone" Mobile networks are very small subscriber base (Mobile Wimax, iBurst, Flash-OFDMA, IPW and portable Satellite terminals) compared to fixed wireless broadband. A common vendor tactic is to quote the peak speed for the entire channel. This capacity can be shared among other users, or limited in other ways as the network becomes more popular.[ Developments in Mobile Broadband Technology In 2002, the Institute of Electrical and Electronics Engineers (IEEE) established a Mobile Broadband Wireless Access (MBWA) working group. They developed the IEEE 802.20 standard in 2008, with amendments in 2010. Another working group, IEEE 802.16, produced standards adopted in products using the Wimax trademark. A barrier to mobile broadband was the coverage the mobile phone networks can provide. In many areas customers will not be able to achieve the speeds advertised due to mobile data coverage limitations. In addition, there are issues with connectivity, network capacity, application quality, and mobile network operators' overall inexperience with data traffic. Demand from emerging markets fueled growth in mobile broadband. Without a widespread fixed line infrastructure, many emerging markets leapfrog developed markets and use mobile broadband technologies to deliver high-speed internet access to the mass market. The global Third Generation Partnership Project (3GPP) family of standards - which includes GSM, EDGE, WCDMA, HSPA and LTE is the most widespread way to deliver mobile broadband. 3GPP standards are serving about 90 percent of the worlds mobile subscribers. After mobile broadband subscribers hit 500 million in 2010, at the end of 2011 Ericsson predicted it will be doubled to a billion. 400 million come from Asia Pacific region, followed by North America and Western Europe with more than 200 million subscriptions each.
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In the United Kingdom, a steering group known as Digital Britain was set up, with the aim of promoting digital telecommunications in October 2008. The conclusion of the steering group was a recommendation that the government took up, namely to have 100% broadband coverage, with a minimum speed of 2Mbps in the United Kingdom by the year 2012. Mobile "broadband" using 3G is not now expected to be able to ensure 2Mbit/s broadband coverage to the more remote areas of the UK as coverage is too poor and contention too high. Another suggestion is Ka Satellite for Rural areas, which may be very cheap by the end of 2010 if Eutelsat's KA-SAT is successfully launched. There is also a smaller Ka Sat in 2010 from Avanti. However Satellite latency is about 790ms Types of devices used for accessing Mobile Broadband Service:

PDA Smartphone, Mobile phone USB flash drive, (dongle) Compact Flash PC Card, Express Card SDIO MiFi

Indian Mobile Broadband Service providers:

MTNL BSNL VSNL Airtel Aircel Idea Cellular Loop Mobile MTS India Vodafone Essar Tata Indicom Tata Docomo Tikona Digital Networks Reliance Mobile Spice Telecom S Tel Virgin Mobile India

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Device manufacturers for Mobile Broadband Service:

ZTE Corporation Cherry Mobile Danger Freewave Technologies HTC Corporation Hewlett Packard (HP) Huawei LG Electronics Motorola Nokia Qualcomm Novatel Wireless Option N.V. Panasonic Research In Motion (BlackBerry) Samsung Sierra Wireless Sony Ericsson Telit

Technologies available for Mobile Broadband Service:

GPRS (2.5G) CDPD CDMA2000 EDGE UMTS (3G) GPRS Core Network IP Multimedia Subsystem HSDPA (3.5G) iBurst (pre-4G) HiperMAN (pre-4G) WiMAX (pre-4G) WiBro (pre-4G)

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Software protection dongle used for Mobile Broadband for PC/Laptop usage: A software protection dongle is a small piece of hardware that plugs into an electrical connector on a computer and serves as an electronic "key" for a piece of software; the program will run only when the dongle is plugged in. The term "dongle" was originally used to refer only to software-protection dongles; however, currently "dongle" is often used to refer to any small piece of hardware that plugs into a computer. This article is limited in scope to dongles used for the purpose of copy protection or authentication of software to be used on that system. Electrically, dongles mostly appear as two-interface security tokens with transient data flow that does not interfere with other dongle functions and a pull communication that reads security data from the dongle. These are used by some proprietary vendors as a form of copy protection or digital rights management, because it is generally harder to replicate a dongle than to copy the software it authenticates. Without the dongle, the software may run only in a restricted mode, or not at all. As of July 26, 2010 it is legal in the United States to use programs protected by this method without a dongle, if the dongle is no longer working and a replacement not available.

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COMPETITION OVERVIEW Major Players There are three types of players in telecom services: State owned companies (BSNL and MTNL) Private Indian owned companies (Reliance Infocomm, Tata Teleservices,) Foreign invested companies (Hutchison-Essar, Bharti Tele-Ventures, Escotel, Idea Cellular, BPL Mobile, Spice Communications) Bharat Sanchar Nigam Limited (BSNL)

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Mahanagar Telephone Nigam Limited (MTNL)

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Videsh Sanchar Nigam Limited (VSNL)

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Bharti

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Reliance Communication

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Tata Teleservices

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Vodafone

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Idea

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CHALLENGES AND OPPORTUNITIES IN TELECOM SECTOR.

The telecom sector has been one of the fastest growing sectors in the Indian economy in the past 4 years. This has been witnessed due to strong competition that has brought down tariffs as well as simplification of policy environment that has promoted healthy competition among various players. The mobile sector alone has been growing rapidly and has emerged as the fastest growing market in the whole worlds. Currently of a size nearing 70 million (GSM and CDMA), this sector is expected to reach a size of nearly 200 million subscribers by financial year 2008. The government has eased the rules regarding inter circle and intra circle mergers. This has led to a slew of mergers and acquisitions in the recent past. Also as the sector is moving closer to maturity, further consolidation is a reality and this will lead to the survival of more profitable players in this segment In order to further promote the use of Internet in the country the government is taking proactive steps to develop this sector with the help of the various players in this segment. For this purpose, the use of broadband technology is being mooted and this will go a long way in improving the productivity of the Indian economy as well as turn out to be the next big opportunity for telecom companies after the mobile communications segment. Non-voice services and VAS are the gold mines. The big takeoff is expected with the rollout of 3G services in early 2007, once the spectrum issues are sorted out.

Internet users base fast reaching near the English speaking population base. Local language and content required for further growth. Infrastructure equipment cost is down to a fraction of what prevailed just a few years ago. Increased viability for the operators to expand to semi-urban and rural markets, hence, accelerate growth further

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1.2

DISSERTATION BACKGROUND

The following can be the factors that I have identified, as major drivers for Sales of Mobile Broadband Data Cards. Broadband penetration in India is extremely low.

Factors that have prevented widespread adoption are failure to make the medium sufficiently attractive and a lack of availability. A third element, affordability, was a significant barrier in the past, but new technology developments have driven down the costs of PCs and Internet subscriptions, making pricing less of a hurdle today. Most broadband customers in India today are primarily concentrated in urban areas.

Semi-urban and rural areas are virtually excluded. To date, market forces have not been sufficient to spread the technology beyond urban areas due to cost constraints, lack of compelling local content, limited availability, and a fragmented group of industry operators. Absence of a comprehensive wired infrastructure in India has made wired broadband expensive in semi-urban and rural areas. Setting up a wired communication network is expensive and demands considerable amount of time. A TRAI estimate indicates that a rural fiber infrastructure to connect 3,75,552 villages, for example, requires an investment of roughly Rs 32,295 crore. Therefore operators are hesitant to invest in villages and remote areas. For broadband to have a reach across the country, service providers have to consider technologies such as wireless. Wi-Fi and Wimax, for example, can help take care of last mile connectivity issues and help bring down costs. The other challenge for broadband penetration is that nearly 70 per cent of the market in India is controlled by state-owned BSNL and MTNL, so private players have found it tough to penetrate the market. However, auction of 3G and WiMAX spectrum, coupled with the new draft telecom policy, has now set the scene for a competitive wireless broadband market. However, India still lacks a critical mass of high-demand applications that can generate new users in areas of entertainment, education, and e-governance. Although some content has started migrating online, content that is locally relevant and available is still in shortfall. One ray of hope exists in the entertainment space, where Internet access is being spurred by video and peer-to-peer applications, representing a powerful force that can increase demand for high bandwidth. Additionally, the Government's investment in the National e-Governance Plan (NeGP) to cover projects including automation of land records, tax, driving licences, passports and
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common service centres; the Unique Identification (UID) project and other e-governance projects such as e-Passport, National Rural Employment Guarantee Scheme (NREGA) and treasury management initiatives will help drive demand for broadband and promote inclusive growth in rural and semi-urban India. Mobile broadband

Meanwhile, mobile broadband has started gaining traction in India. The introduction of 3G and reduced calling costs are expected to drive mobile broadband in the country and increase the demand for broadband availability. Advanced technologies such as 4G are expected to enhance subscriber interaction with the network because people can access Internet services, such as online television, blogging, social networking, and interactive gaming, easily, on-the-go. This is expected to further drive demand for mobile broadband services. However, industry and government need to address underlying issues of concern that prevent the rollout of a fixed-line network. From a pricing perspective, broadband users have to pay for access platforms (e.g., PCs/laptops and mobile devices) and a monthly Internet subscription. Although subscription charges in India are among the lowest globally, they are the outcome of price competition in a currently irrational market (where competition forces operators to sell broadband access at or below actual cost). This poses a significant hindrance to future market growth because sustainable growth requires bringing prices to a more sustainable level while simultaneously reducing operating costs. Operators (telecom and cable) must work to ensure ubiquitous supply by understanding the strengths and competitive positions of various broadband technologies and their applicability across different segments. The government needs to provide more civic services online, establish a policy at the national/local levels to streamline access and advance the rollout of the fixed network infrastructure besides encouraging digitisation of the cable industry. According to the draft of the National Telecom Policy, the Government will provide 'broadband on demand' by 2015 and achieve a target of 175 million broadband users by 2017 and 600 million by 2020. The draft policy proposes to revise the existing broadband download speed of 256 kbps to 512 kbps and subsequently to 2 Mbps by 2015 with higher speeds of at least 100 Mbps thereafter. Part of the policy is also to increase rural tele-density from 35 per cent to 60 per cent by 2017 and to 100 per cent by 2020. The Government spending on e-governance projects and SWAN initiatives is likely to drive the growth of the networking market further.

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Allocating spectrum for Mobile Broadband will have a huge impact on India's GDP by 2015

Broadband connectivity is a driver of socio-economic improvement, fuelling economic growth across all industry sectors and contributing to enhance GDP. According to Analysys Mason, a 10% increase in broadband penetration will lead to net growth revenue increases of 42% in the healthcare sector (equating to an additional INR 1,215 billion or US$ 27.4 billion), 36.8% in education (an extra INR 1,402 billion or US$ 31.2 billion) and 18.8% in the transport sector (an additional INR 889 billion or US$ 20 billion). Currently broadband penetration in India is 1.7%(1), and is forecast to rise to 12.5% by 2015. However, to achieve this it is essential that additional spectrum is released quickly, most notably the 700MHz and 2.6GHz bands, so that mobile operators can roll out nextgeneration Mobile Broadband networks and services and meet demand.

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1.3 OBJECTIVE OF DISSERTATION The objectives that I have identified to conduct this research for analyzing the Sales of Wireless Broadband Data Cards available in Delhi and NCR Region, based on the research conducted from the responses of the Retailers selling any type of Mobile Broadband Data cards are as follows: To find out the Sales figure of the following Brands of Mobile Broadband Data cards: A. B. C. D. E. Reliance Netconnect Data Card Idea Netsetter USB Modem Tata Photon+ Data Card MTS MBlaze USB Data Card BSNL/MTNL Data Card

To identify the Market Leader of Mobile Broadband Data Cards based on the analysis conducted.

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1.4 RATIONALE FOR DISSERTATION Pointing out that broadband connectivity could be a driver of socio-economic improvement; a global study has said a 10 per cent increase in broadband penetration in India would contribute to $80 billion of net revenues across the country's transport, healthcare and education sectors by 2015. The following factors are the considerations for the Rationale of my Research: A 10 per cent increase in broadband penetration will lead to net growth revenue increases of 42 per cent in the healthcare sector (equating to an additional $27.4 billion), 36.8 per cent in education (extra $31.2 billion) and 18.8 per cent in the transport sector (an additional $20 billion), said the study on the economic impact of mobile broadband growth that was commissioned by the GSM Association (GSMA). At present, broadband penetration in India is 1.7 per cent and by 2015 it is likely to rise to 12.5 per cent. However, to achieve this it is essential that additional spectrum is released quickly so that mobile operators can roll out next-generation mobile broadband networks and services and meet demand. According to GSMA Senior Director Robindhra Mangtani, Simply put, if the Indian government allocates sufficient spectrum in the near future, it will open up a staggering economic opportunity. However, the current lack of spectrum remains a formidable obstacle to India benefiting from mobile broadband services and the government meeting its stated broadband connectivity target of 16-crore Internet connections by 2014. Broadband connectivity is a driver of socio-economic improvement, fuelling economic growth across all industry sectors and contributing to enhance GDP. According to Analysts Mason, a 10% increase in broadband penetration will lead to net growth revenue increases of 42% in the healthcare sector (equating to an additional INR 1,215 billion or US$ 27.4 billion), 36.8% in education (an extra INR 1,402 billion or US$ 31.2 billion) and 18.8% in the transport sector (an additional INR 889 billion or US$ 20 billion). Currently broadband penetration in India is 1.7%, and is forecast to rise to 12.5% by 2015. However, to achieve this it is essential that additional spectrum is released quickly, most notably the 700MHz and 2.6GHz bands, so that mobile operators can roll out next-generation Mobile Broadband networks and services and meet demand. India is the second largest mobile market in the world and a vibrant and exciting growth market for Mobile Broadband it has an opportunity to shape the mobile industry of the future. By acting now, Indias hardware manufacturers and software companies have a huge opportunity to build a lead in developing supporting elements, which will not only transform Indian society but also, through a thriving export market, bring the power of Mobile Broadband to countries across the world.
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In India, 3G is buzzing everywhere like Tata indicom photon 3G and Reliance Netconnect 3G, BSNL 3G. What about the other data cards like: EVDO BSNL, Tata Photon plus etc. Let me take an opportunity to present them before they wash off from market with the entrance of 3G technology.

My motive of doing this research is entirely based on my personal interest in the field of Telecommunication and its business management, and to help India grow powerful and self sufficient in terms of Broadband penetration, and helping grow India socially as well as economically.

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1.5 DISSERTATION PLAN Chapter -1 (Introduction) This chapter will consists of the General Introduction, dissertation background history, objective of the dissertation, dissertation plan, methodological issues and problems and limitations of the research. Chapter 2(Literature review) This chapter includes literature review of the dissertation. It includes critical points of previous research. Chapter 3(Research methodology) This chapter will consists of the research design, the type of data being used and even the sources of the data from where the data is being gathered. And further it will also give the brief description of how the data is being analyzed. Chapter 4(Presentation and Analysis of data) This chapter includes analysis of data, and also shows how data is used to solve the problem. Chapter 5(Conclusion and Suggestions) This chapter will include the Principle findings and conclusions and Recommendations for further research in the near future. Chapter 6(Bibliography) This chapter will include the bibliography and appendices, which gives the brief idea about the sources of the data and some key elements. Chapter -7(Annexure) This chapter contains a sample of the questionnaire that was used to collect the primary data from the retailers, and the details of those retailers that responded.

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1.6 LIMITATIONS OF THE DISSERTATION In this research, following are the major constraints within which this dissertation is being conducted:-

Time is the Main Constraint: Since, the time allotted for this research is limited, and subjected to the regular classes of my MBA course; it was difficult to devote maximum time for this research.

Change in Telecom Market Dynamics: The Indian Telecom industry is experiencing a little tremor and instability due to the recent 2G scam regarding the spectrum allocation for 2G; hence the research may not be entirely accurate or near precision.

Sample size is small: Since, this research was conducted with only 30 retailers; the inference may not be validated for all the Telecom Circles in PAN India

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CHAPTER 2 LITERATURE REVIEW

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LITERATURE REVIEW

INDIA BROADBAND WIRELESS AND WIMAX MARKET ANALYSIS AND FORECASTS: 2006-2012, 1ST EDITION. By Sridhar T Pai and Adlane Fellah, Maravedis Inc. Source: www.maravedis-bwa.com/pdf/ExecSum_WiMAX_in_India.pdf Executive Summary Background India started its economic liberalization program in 1991. In 1994, the first step to opening the telecom market to privatization was taken. The first private sector wireline and cellular licenses were issued in 1995. From then on, Indian telecom has seen several milestones crossed and many missteps that provided valuable lessons. The effective telecom tariff for domestic voice service has dropped from Rs 14 per minute (US$0.3 at US$1 = Rs 44.5) to about Rs 1 (US$0.02) per minute in the last 10 years. The result is that the number of telephone connections (wireline and wireless lines) has doubled in the past two years, to about 150 million. The Ministry of Telecom has set a target for 2007 of about 250 million connections and mobile coverage for 85% of the countrys geographical area, from about 30% today. India now has 49.75 million fixed subscribers and 100 million mobile users, for a total of about 150 million. That may seem like a large figure, but with a population of 1.08 billion, it translates to just 14 phones for every 100 people. And that number is skewed by the relative wealth of the cities while urban teledensity is around 31 percent, just 2 percent of the rural population has phone lines. With India's expanding middle class, demand for telephone services is growing beyond carriers ability to keep up. The telecom ministry is initiating an ambitious project to release a total of about 45 MHz of spectrum from the Department of Defense to augment necessary spectrum for 3G services. Although details are not yet available, the cost has been estimated at about US$200 million and the time frame is expected to be early 2007. With respect to rural connectivity, the governments objective is to reach about 50 million rural connections, or one phone per three rural households, by 2007 and about 80 million rural connections or one phone per two rural households, by 2010. Broadband Market Broadband services were launched in India in 2005. ADSL services now cover 300 towns with a combined 1.5 million connections, while broadband wireless subscriber figures are still negligible. While low broadband penetration is a clear opportunity for BWA/WiMAX, the market take off will require sufficient spectrum, very low cost CPE and affordable end-to-end
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connectivity, including the computing platform. A country where broadbands average revenue per user (ARPU) is estimated at US$8-10 requires very low equipment cost. In fact, Huawei is already delivering DSL modems at US$13 to Indian operators. The Indian telecom sector operates in a volume-driven market. If the broadband market in India grows to meet the governments revised targets, it might spur one of the worlds largest broadband wireless markets. For example, target broadband connections have been currently revised to 9 million subscribers by 2007 and 20 million by 2010. Quite likely the majority of these will be wireless broadband connections because of the poor wireline infrastructure in place.

BWA/WiMAX Regulation Enough operators are complaining about lack of adequate radio spectrum, that the government is considering the release of some of the spectrum held by the departments of
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Space and Defense. Currently, license holders in the 3.3-3.4 GHz band have on average, a spectrum of 2x6 MHz to deploy broadband services, even though an analysis shows that 20 MHz is the minimum to support wide scale deployments and hence a profitable business case. At the end of June 2006, the Telecom Regulatory Authority of India (TRAI) initiated a public consultation on Allocation and pricing of spectrum for 3G services and broadband wireless access including WiMAX. This consultation, in which the WiMAX Forum is keen to participate, will probably take until the end of 2006 to produce recommendations. Further pressure on available bandwidth is coming from operators who require allocations of the 3G/UMTS spectrum. BWA/WiMAX technologies require specific frequency bands to be opened up in the 3.5 GHz band (an internationally approved standard), which is currently allocated to the Department of Space for INSAT downlink. Regulators and policy makers are deciding the best way to manage the spectrum. BWA/WiMAX Activity Bharti TeleVentures, Reliance, SIFY, BSNL and VSNL (Tata Group) have all acquired licenses in 3.3 GHz range and are in various stages of trials. VSNL has announced Phase 1 pre-WiMAX deployment of Aperto gear in 60 locations, extending to 200 locations within the year. Although there is clearly insufficient spectrum to offer DSLlike service, several operators have indicated that there is still a huge market for 64 and 128 kb/s connections, which should alleviate the lack of spectrum. Other active players include utilities and several branches of the Indian government. Intel is making significant progress in working closely with the Indian Government in bringing the latters rural broadband goals to reality. The innovativevillage entrepreneur model, together with a net-enabled community info-kiosk, is an ideal way to reach the many who are not yet connected. While Motorola is strengthening its presence in the hinterlands through its extensive BWA projects for state governments, Alcatel has set up a joint venture with the C-Dot (the R&D arm of the DoT) to focus on exclusive BWA/WiMAX solutions that are tailor made for India at price points the Indian consumer is comfortable paying. Anticipated Developments Several key events should influence the Indian BWA/WiMAX environment in the months ahead. While most operators have only conducted limited trials of vendor products, we expect larger deployments to begin in January 2007, provided that the needed additional spectrum is made available as envisioned. The mobile industry, already faced with a steep decrease in voice ARPU, is expanding its reach by offering voice services in rural areas and high-margin data services in urban areas in order try to increase revenues. Mobile TV, IPTV and other broadband applications are under trial at Reliance, Bharti and MTNL. The increased level of e Commerce activity mainly through travel bookings, discount airfares, holiday destination packages, job hunting and matrimonial services is creating a huge demand
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for always-on broadband services that is expected to take the current Internet user population to 100 million before 2007. Government-led initiatives with strong technology partners such as Intel, Motorola and Alcatel will trigger successful applications such as the Railtel cyber-cafe network along the entire rail route of the nation. Local technology-product companies with differentiated products engineered in India will have an opportunity to deploy in large domestic networks, learn from the experience and go global. Thus, they could form the firstgeneration Indian telecom product companies to address global markets. The mobile-content industry in India is on the threshold of great change, as television, production houses and content aggregators are working frantically to define the new frontier in the Indian content business. Mobile operators and ISPs that have strong alliances with content developers will be able to define the content-licensing model, which is at the heart of the broadband business. This will pose a new challenge for Indian service providers. Although the Indian broadband arena is emerging, it clearly offers huge potential forthose that can demonstrate perseverance, patience and commitment. Market Forecasts In 2005, the BWA equipment market opportunity was a mere US$6 million, dominated by small deployments for backhaul applications to enterprises with outdoor equipment. However, Maravedis and Tonse believe that with the upcoming spectrum opening, the certification of new equipment and lower-cost CPEs, the annual 3.3 and 3.5 GHz equipment opportunity will increase from US$4 million in 2005 to US$256 million in 2012. Maravedis and Tonse project an accumulated 18 million BWA subscribers by 2012, counting both residential and business segments. WiMAX subscribers should represent two-thirds of this figure. Approximately 60% of the WiMAX subscribers will be mobile customers who are predominately residential, while fixed WiMAX will continue to be driven by large corporations and, to a lesser extent, by SME customers.

Methodology & Assumptions The research was conducted through two main channels: Secondary Sources Maravedis always strives to provide its clients with a new and unique perspective of the industry based on its own research. To ensure that we add value to the information already available to stakeholders in the industry, we reviewed most of the market research available on broadband wireless access in India, including ITU Statistical Yearbook, 2005 The World Bank Development Indicators, 2005 Numerous articles Indian ISP Association
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Primary Sources Primary research is a lengthy but indispensable process for market research because it yields data neither biased nor distorted by intermediaries. As part of this research, Maravedis conducted interviews with the following: All service providers listed in the report The regulatory authorities National account managers and other key representatives of equipment vendors active in the Indian market The survey took place from January to June 2006 and involved discussions with product managers, marketing executives, regulators, technologists and sales people at all organizational levels. We would like to thank all the participants in our survey for their time and contributions.

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MOBILE BROADBAND AND IMPLICATIONS FOR BROADBAND COMPETITION AND ADOPTION A white paper prepared on behalf of Broadband for America By William Lehr Massachusetts Institute of Technology Source: www.people.csail.mit.edu

Executive Summary The growth of wireless mobile broadband has the potential to drive significant new growth in Internet applications, services, and equipment markets. It is likely to represent as important a change for the Internet as the transition from dial-up to broadband, fundamentally changing the landscape for broadband Internet access by adding the mobility that is needed to enable truly ubiquitous and pervasive "always on" Internet services. Incumbent operators like AT&T, Verizon, Sprint, and T-Mobile, and new operators like Clearwire and Cox are investing billions of dollars to expand coverage and enable much higher quality mobile broadband services. Mobile broadband subscribership and the Internet traffic it generates are growing rapidly and these trends are expected to continue into the future. While mobile Internet availability and usage are growing quickly, the primary forms of broadband Internet access today use fixed-access connections, chiefly from telephone and cable companies. Although we are still in the early stages of the development of massmarket mobile broadband and the fuller development of the mobile Internet that it portends, it is reasonable to speculate about what the likely implications of mobile broadband will be for broadband service markets and for the dynamics of broadband service competition and, therefore, broadband adoption. In this paper, I survey current data on emerging trends to inform a vision of what the near-term future (3-5 year horizon) for mobile and fixed broadband is likely to look like. This analysis confirms the conclusion that mobile broadband will drive growth and provide a stimulus for innovation and investment for broadband infrastructure and the Internet overall. In the first instance, mobile broadband will bring us a step closer to the vision of pervasive, always on, everywhere connected computing and communications that will significantly enhance the value proposition of using Internet services. This should result in a rightward shift of individual and aggregate demand across the full spectrum of user types and stimulate the emergence of niche and value-added service markets (e.g., mobile healthcare, mobile e-Commerce, and locationaware services). These demand stimulus effects are pro-competitive since they expand revenue opportunities for incumbents and entrants alike, and should contribute to promoting adoption and usage rates. Because it is reasonable to expect that mobile and fixed broadband will continue to be characterized by different service features, I expect that mobile and fixed broadband services will be perceived as distinct and complementary services, rather than as close service substitutes in most user/usage contexts. However,
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for some subscribers and in some contexts, mobile broadband may be perceived as an acceptable substitute and thereby mobile services will impose a degree of (intermodal) competitive discipline on broadband service markets in general, and on fixed broadband services more specifically. It is likely that mobile broadband will provide most direct competitive pressure on first-generation, lower-quality fixed broadband services. Competition from mobile broadband is also likely to encourage and accelerate upgrade investments in fixed broadband infrastructures as providers seek to differentiate their offerings by accentuating the relative advantages of fixed-access services. These effects contribute to the conclusion reached herein that the overall impact of mobile broadband will be strongly pro competitive. Introduction The growth and pervasive use of Information and Communications Technology (ICT) has transformed our global economy and society over the last half-century. Fueled by Moore's Law improvements in the price-performance capabilities of computers, computing has expanded from mainframes to desktop computers to embedded processors that are ubiquitously deployed in all kinds of devices and appliances. These computing resources are made more valuable when networked via data communication services. During the 1980s, desktop computing and local area networking spread across all industrial sectors and businesses of all sizes, and personal computers became increasingly common in homes. During the 1990s, two parallel but related phenomena moved us closer down the path towards the future of pervasive computing: the explosive growth of both mobile telephony and the Internet. During the first decade of the 21st Century, broadband access became the dominant mode for Internet access in the United States, bringing "always on" connectivity and higher data rates to support rich media and Web-2.0 enabled interactivity to the Internet. Now, as we prepare to enter the second decade of the 21st century, we are on the cusp of realizing the convergence of the broadband Internet and mobile communications with the widespread deployment and adoption of mobile broadband services. The convergence of mobile communications and the Internet will bring us a step closer to realizing a vision of pervasive computing and communications, where the power and capabilities of ICT can delivery true 24/7, everywhere/always connected ubiquitous computing and communications services. This convergence has the potential to be as transformative and growth producing as those earlier transitions. While the availability and usage of mobile broadband services are expanding rapidly, we are still in the early stages of the emergence of the mobile broadband future. Today, most consumers access the Internet via fixed-location broadband connections, provided over wired infrastructures via cable or DSL modems. However, in anticipation of the evolution of mobile broadband services, it is worthwhile considering what the implications may be for broadband services in general, and more specifically, for prospects for competition in broadband service markets. In the balance of this paper, I will explain why I believe it is reasonable to expect the overall impact of mobile broadband to be strongly pro-competitive with regard to the Internet and broadband service markets generally. The expansion of mobile services will substantially enhance the value proposition for Internet access, supporting wholly new services as well as expanding the usability of
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existing services. The market growth stimulus associated with these effects is expected to be quite significant. At the same time, the growth of mobile broadband will have complex implications for broadband competition and on broadband services offered via fixedaccess connections. As I will explain, I expect fixed and mobile broadband services to offer distinctly different sets of basic capabilities, and as a consequence, to remain distinct services that will not be perceived as close substitutes in most user/usage contexts for the foreseeable future. It is likely that mobile broadband services will generally offer lower data rates and confront higher traffic sensitive costs than fixed broadband services. Offsetting these comparative disadvantages, however, mobile broadband services will offer the important killer app functionality of 'mobility' in all of its flavors. I expect the growth of mobile broadband to impose competitive discipline on lower-quality, first generation fixed broadband services; at the same time, it will encourage providers of fixed access services to accelerate investments in enhancing the quality of fixed infrastructures to enable those services to better compete against improving mobile broadband services and to better accommodate the traffic generated by mobile users. The competition at the low-end and the spur to investment in higher-quality fixed broadband services provide further support for concluding that the likely impact of mobile broadband will be strongly pro-competitive. In Section 2, I evaluate current trends in order to further flesh out a vision of the mobile broadband future that is emerging. Section 3 addresses what this is likely to mean for mobile fixed broadband competition. Section 4 offers conclusions and discusses some of the policy implications. Emerging mobile broadband future Before focusing on the mobile broadband future, it is worthwhile spending some time looking at the structure and performance of mobile services in the United States overall. As I will explain, the evidence demonstrates that these are robustly competitive.

Competition in mobile services Mobile telephony services were first launched in the mid-1980s as analog, first generation or "1G" services. In their early incarnation, coverage and capacity were limited. Service was targeted for in-car use along major highways as a high-price (luxury) service with relatively poor quality. Handsets were large, expensive, and power-hungry. Still, the promise of mobile communications was sufficiently compelling so the market grew rapidly. The second generation ("2G") services were launched in the mid-1990s as digital technology replaced analog and mobile telephony emerged as a true mass-market service. The switch to digital made it feasible to expand capacity, coverage, and improve call quality. Growth accelerated and during the 1990s, mobile telephony penetration soared from slightly less than 13% in 1995 to over 50% by 2003. There are now over 276 million mobile phone subscribers in the U.S., representing a penetration rate of 89% These subscribers are served by a diverse array of facilities-based and non-facilitiesbased service providers. In addition to the four largest national providers (AT&T Wireless,
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Verizon Wireless, Sprint-Nextel, and T-Mobile), there are a number of large regional providers (e.g., US Cellular, Leap Wireless, and MetroPCS), and a large number of service resellers (e.g., Firefly, Virgin Mobile, and Tracfone). There are also new facilities-based wireless providers like Clearwire and Cox Communications. Clearwire was launched in 2008 with the goal of providing Wimax-based fixed and mobile broadband wireless services -- including telephony services. Clearwire is on track to provide coverage to 40 million POPs by the end of 2009, and was already serving 511 thousand customers by the end of June 2009. Cox Communications, best known as a cable company, purchased spectrum licenses at auction and is in the process of building out a 3G/4G mobile network. Today, over 90% of the population now lives in Census blocks served by four or more mobile operators. Collectively, these providers have been investing and continue to invest tens of billions of dollars every year in expanding their network coverage and upgrading the quality of their infrastructure. According to the CTIA, cumulative wireless industry capital expenditures since 1985 exceeded $264 billion, or more than $22 billion per year. The number of cell sites has grown almost 10fold since 1995, to over 213 thousand by 2007. The expansion of facilities-based networks has intensified competition, resulting in continuously falling prices. Roaming charges have fallen, pre-paid and unlimited calling plans and feature-rich options have expanded, and handset prices have fallen (while handset subsidies have remained high). From 1994 to 2007, the average revenue per minute fell 87%. Although average monthly bills for mobile service have remained approximately constant, close to $50 per month, usage has soared. And, in July 2009, TracFone forged new pricing ground with its national unlimited calling plan for only $45 per month. All of this competition translates into significant benefits for U.S. consumers. Today, U.S. mobile customers pay the lowest prices (on average $0.05 per MOU) and are by far the heaviest users of mobile telephony services among OECD countries. In summary, the continuous growth in subscribership leading to high rates of penetration, improvements in service quality and high levels of customer satisfaction, breadth of service offerings, and indicia of fluctuating market shares and high rates of customer churn all attest to a robustly competitive mobile services sector. Mobile broadband takes off The first 3G services were launched in 2005 in the United States. These services offered the ability to interconnect to the Internet over a mobile device at speeds that averaged from 50 Kbps (dial-up) to a few 100s of Kbps (i.e., approximating first generation fixed access broadband speeds).29 Initially, these services were priced relatively high, targeted to those with a pressing need for mobile access (e.g., "road-warriors"). The predominant mode for accessing 3G Internet services was via data modem cards that plugged into laptop computers (rather than via mobile handsets that are the dominant device for most mobile telephony services). At the same time that 3G services were being deployed, wireless local area networks (WLANs) based on the wireless Ethernet standard, Wi-Fi, began to take off. Wi-Fi was developed as a technology to exploit unlicensed spectrum in the 2.4GHz band to provide LAN connectivity over a local area (up to 100m) without requiring cabling. Because of
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its limited reach and lack of support for voice telephony and high-speed mobility, Wi-Fi was not originally thought of as a mobile broadband technology. However, Wi-Fi proved extremely attractive in extending the reach of fixed broadband access services to allow more flexible access of broadband services within the home, and when deployed in public access points, as a way to provide "nomadic" Internet access either as a public service/economic stimulus effort (e.g., in government buildings, public libraries, or economic development zones), or for profit (e.g., via aggregators like Boingo31 or iPass32). Moreover, because many private Wi-Fi access points are not secured, it is often possible for users willing to prospect for open access connections to connect to the Internet for free. The proliferation of Wi-Fi demonstrated the potential for wireless to evolve along unexpected paths and pointed toward a broader understanding of the different ways in which "mobility" might be used and supported. In contrast to the mobile service provider 3G model, the growth of Wi-Fi was primarily driven by end-users purchasing and deploying Wi-Fi equipment to expand access options to fixed broadband services (provided via traditional wired cable or DSL modem services). The growth of Wi-Fi highlighted some of its deficiencies, including its lack of support for telephony, limited range, and support for managing shared access. This prompted the development of a new technology, WiMAX (IEEE 802.16), as a "Wi-Fi like" technology that was intentionally designed as a wireless "last mile" alternative to wired fixed broadband access. This enabled WiMAX to compete as a metropolitan area network (MAN) alternative to 3G, and with further standards development (IEEE 802.16e), it became a more potent competitor by adding better support for mobility and real-time services like telephony. In contrast to 3G, the newer WiMAX technologies are perceived as more advanced, fourth generation or "4G" technologies that will offer much higher Internet access data rates (i.e., an order of magnitude faster data rates that are in the 10s or 100s of Mbps). Meanwhile, the 3G providers and their vendors have continued to innovate and develop their own versions of much more capable 4G technologies. A growing number of 3G mobile operators have announced plans to migrate to a version of "4G" mobile technology that is referred to as Long Term Evolution or "LTE." Most of the largest U.S. mobile network operators (e.g., Verizon, AT&T, T Mobile, MetroPCS, Leap, US Cellular) have committed to LTE. The peak data rates for 4G services are on the order of 50-100Mbps, although it is expected that the average throughput experienced by endusers will be closer to 5-12Mbps in the nearer term. In addition to supporting an order of magnitude faster data rates, comparable to the experience of current wired fixed broadband services, the 4G LTE services are expected to provide a much closer to "always on" broadband experience because of the much lower latency involved in setting up a connection Implications for mobile broadband usage The trends cited earlier point to continued growth in mobile data usage. The facilities based mobile network operators are investing heavily to expand their service footprints and upgrade the quality of their networks to enable 4G powered services. In response to falling prices and expanded choice and compelling user applications, smartphones are becoming an ever-larger share of the installed base of handsets. According to Cisco, each
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high-end Smartphone today (e.g., an iPhone or Blackberry) has the potential to deliver 30 times the traffic of a typical basic feature handset; and each mobile data card has the potential to deliver 450 times as much traffic. With the growth of M2M and other specialized devices like the Kindle or Internet-enabled video recorders, music players, or game stations, the number of broadband connected devices can go well beyond the number of broadband subscriptions. As noted earlier, Cisco has forecasted that mobile data will grow at 131% per year for the next five years, exceeding 2 Exabytes (or billion gigabytes) by 2013. Accommodating the growth in mobile device traffic will require substantial investment in mobile and fixed broadband infrastructures. The radio frequency spectrum is an increasingly scarce resource and meeting the demand for wireless services (which includes a much larger class of uses than mobile broadband) means that wireless technologies will have to become much more spectrally efficient. The new Wimax and LTE technologies are expressly designed to make that feasible. One way in which the capacity of radio systems can be expanded is through spatial reuse that entails using a larger number of smaller cell sites to cover a given area. With appropriate design, more of the radio frequency spectrum may be devoted to supporting users in any given area. These base stations will need to be interconnected to the backbone networks of the mobile providers, and ultimately to the rest of the Internet. To support the higher data rates enabled by 4G services and the growth in per-subscriber and aggregate traffic volumes per cell site will require denser deployment of fixed broadband infrastructures, including fiber optic cabling. In addition, providers are in the early stages of deployment of femtocell technology. These are mini-cell sites that may be deployed inside buildings and homes to support mobile wireless access locally, while using a fixed broadband access service for back-haul. The growth of mobile broadband has the potential to help fuel significant economic growth. As with other types of ICT, there is growing evidence that the expansion of wireless services, including mobile broadband will contribute to GDP, productivity, and employment growth. One study estimated that wireless voice services added $157 billion in productivity gains and wireless data services added $28 billion in 2004 and 2005 respectively. This same study forecasts that cumulative efficiencies from wireless broadband over the ten-year period from 2006 through 2016 will add $528 billion to in GDP productivity gains. The anticipated gains are expected from such productivity-enhancing improvements as better professional time management, improvements in healthcare efficiency, field service automation, improved inventory management to reduce inventory losses, and sales force automation. Another study projects that wireless broadband investment will add between 4.5 to 6.3 million jobs and 0.9% to 1.3% to GDP growth, or $126.3 to $184.1 billion.61 similar analyses for other countries are equally bullish. Conclusions and Public Policy Challenges Overall, mobile broadband has the potential to deliver substantial benefits in market growth, expanded choice, and competition. By finally enabling the convergence of mobile communication services and the broadband Internet, mobile broadband can enable the creation of markets for wholly new services (e.g., mobile health, mobile television, machine-to-machine, etcetera), as well as enhancing the value of existing broadband
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services by allowing them to go mobile. This will increase aggregate demand for Internet services overall. In addition, although their different strengths and weaknesses render them imperfect substitutes, mobile and fixed broadband will offer alternate solutions for accomplishing the same Internet goal (e.g., sending email, making a telephone call, or accessing the WWW) for some users and usage scenarios. Competition between these alternatives will provide a degree of market discipline across all broadband offerings that should contribute to lower pricing for consumers and enhanced incentives to invest in service upgrades to address additional demand. The emergence of 4G mobile broadband will offer a potent alternative to legacy DSL and cable modem services, but will not be likely to match the data rates and pricing expected from FTTH and DOCSIS 3.0 services that are already becoming widely available. Taken together, this analysis suggests that the overall impact of mobile broadband will be strongly pro-competitive for broadband services overall, and for fixed broadband access in particular. It is also worth noting that the significant progress we have seen in aggregate deployment of mobile broadband infrastructure attests to the robust competitiveness of mobile services markets. By virtually every metric, mobile services are today quite competitive. From a policy perspective, the analysis included herein should make policymakers optimistic that the markets for broadband will remain competitive and that investment and innovation will continue to prosper as they have thus far. However, the technology and markets are evolving quite rapidly and the importance of broadband to society and the economy as basic infrastructure is growing. This means that continued vigilance to protect the health of the competitive process is warranted. The obvious importance of mobile broadband for the future of the Internet means that any analysis of market power in broadband service markets will need to consider the impact of mobile broadband and the competitive dynamics between fixed and mobile broadband services. That impact is likely to be complex because mobile and fixed services will be complements, while also acting as imperfect substitutes for some components of demand. On the whole, I believe the evidence will support treating these distinct and different although clearly related Service markets. Quantifying the economic interactions between fixed and mobile services will be important if one anticipates adopting any regulatory interventions targeted at remedying any perceived deficit in broadband competition in either market. Because the market for mobile broadband is still relatively immature, estimating the requisite own-price and cross-price demand elasticitys is difficult today and would be prone to relatively large uncertainty bounds. If we were to anticipate a significant problem for competition arising, then this would be worrisome. As the analysis presented here makes clear, however, the available evidence suggests that the impact of mobile broadband will be strongly pro-competitive. The rapid pace of progress in broadband-related investment (in infrastructure, in services, and in content and applications) and innovation all along the value chain (from services to content to applications to end-user devices) should give us pause before we consider imposing new regulatory obligations on broadband providers.

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About the Author Dr. William Lehr is an economist and research associate in the Computer Science and Artificial Intelligence Laboratory (CSAIL) at the Massachusetts Institute of Technology (MIT) and participant in the Communications Futures Program (CFP). The CFP is a joint industry academic multidisciplinary research effort focused on the technical, economic, and public policy challenges confronting the Internet infrastructure industries. Dr. Lehr's research focuses on the economic and policy implications of broadband Internet access, next generation Internet architecture, and the evolution of wireless technology. In addition to his academic research, Dr. Lehr provides consultancy services on matters related to the information technology industries to public and private sector clients in the U.S. and abroad. Dr. Lehr has over twenty years of telecommunications industry experience as a researcher and industry consultant. Dr. Lehr holds a PhD in Economics from Stanford, an MBA in Finance from the Wharton School, and MSE, BA, and BS degrees from the University of Pennsylvania.

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INTERNATIONAL TELECOMMUNICATION UNION WORKSHOP ON PROMOTING BROADBAND Source: http://www.itu.int/osg/spu/ni/promotebroadband/index.html

Executive summary The aim of this background paper is to examine some of the promotion techniques of broadband networks and services that have proven to be successful from both a demand and supply perspective. This should enable those interested in the promotion of broadband to identify how those techniques can apply to their own economies, and to address some of the problems faced. The paper concludes that inter alia, that: To promote demand: It is crucial for users to be aware of the benefits that broadband can provide. Both governments and the private sector can play an active role in marketing the benefits of broadband. Successful approaches may include ensuring that broadband is available in schools, enabling consumers to share broadband connections, and permitting bundling of broadband with other services. Government promotion campaigns and co-branding can also encourage take-up. Users must be convinced of the advantages to be gained by adopting key broadband technologies and integrating them into their daily lives. Applications that have been meshed into successful broadband economies include IP telephony, video chat, and audio over broadband and online gaming. Business and government cultures can also embrace and encourage ideas such as teleworking and online transactions. Finally, policies that encourage content development in local languages will create favorable conditions for adoption. Economies must offer an environment that fosters broadband development and diffusion. This includes careful consideration of intellectual property rights, support for sectors that participate in developing new, high-bandwidth applications, methods for diffusing technology, and measures to ensure security for users. Consumers will only adopt broadband when they can justify its cost in terms of the value it adds. A competitive market structure is therefore vital to sustain low prices. Tailored pricing plans and the elimination of large lump-sum payments can aid affordability. To promote supply: Competition is the key to driving prices down and increasing the broadband options available to consumers. The most successful economies in terms of broadband penetration have strong competition both among providers of the same broadband technologies, and between providers of different broadband technologies. Furthermore open access policies can help promote service
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competition. It is also beneficial to have players in the market that are sufficiently large and deep pocketed to rival the incumbent operator. Existing infrastructure should be utilized to the full to enable broadband rollout. But new investment is also required, and this should be future-oriented, anticipating the likely demand for ever-faster Internet connections. Schools, hospitals, and community access centers can act as effective anchors for broadband demand in areas where individual household connections are not yet viable. The network can then expand incrementally from these key points as the technology and economy allows. Wireless broadband also offers a viable community alternative to fixed line solutions such as broadband via DSL or cable modem. Governments can participate at all levels. National, regional and city-wide initiatives and community participation projects have been successful in expanding access. In some cases, governments have chosen to provide, or to subsidize, infrastructure to stimulate the economic development of a particular area.

Overall, it is clear that there is no single key to promoting broadband. Promotion strategies and policies will prove most effective when various initiatives and projects are integrated; encompassing all stakeholder groups, and adjusted to contextual and environmental factors. Promoting broadband, and why now? Broadband has been referred to as the infrastructure of the knowledge economy. Countries around the world have nominated broadband networks as crucial infrastructure for achieving their social, economic and scientific goals. Furthermore, broadband has been described as a panacea for a range of social and economic woes as well as a way of revitalizing demand for the products and services of the telecommunication sector. However, in some countries the take-up of broadband has been disappointingly slow, and in many economies around the world it remains below expectations, although there are significant exceptions, most notably the Republic of Korea. Even where infrastructure is available and the cost affordable, demand for broadband has tended to remain sluggish. It appears that end-users do not universally perceive high-speed data delivery to be the wonder it is sometimes hyped up to be. Figure 1.1 shows the penetration of broadband in the fifteen economies where adoption has been most successful. Figure 1.2 provides an indication of how well different economies are doing in broadband penetration relative to income levels. Many Internet users appear unconvinced that the benefits of broadband are worth its additional cost. The most successful Internet applicationse-mail and instant messagingoffer users almost the same experience whether on a 56 kbit/s1 dial-up modem or on a 1.5 Mbit/s broadband connection. Yet even if broadband were free, one could not expect to see 100 per cent usage immediately, even where it is readily available. This is highlighted by an experiment conducted in the town of LaGrange, Georgia in the United
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States, whereby cable broadband access was offered for free to all interested consumers.2 One year after this was first offered, only 29 per cent of residents had subscribed.3 This highlights the problem this workshop seeks to address: if governments and industry are convinced that broadband is essential to growth and development, how can they encourage users to take up the technology? This paper allows those wishing to promote broadband the opportunity to examine the broadband promotion techniques that have worked from both a demand and supply perspective, identify how those techniques can apply to their own economies, and address some of the problems faced in broadband promotion. The aim is not to promote broadband networks per se, but rather to promote the availability of high-speed Internet access as a platform for developing a range of new and innovative applications and services. For the purposes of this paper, broadband refers simply to high-speed, high-capacity communication providing Internet access of which digital subscriber lines (DSL) and cable modems are currently the most popular technologies. Why promote broadband? Generally speaking, the main reasons for promoting broadband can be given as follows: Benefits to users. Compared with narrowband, the increased speed and alwayson4 nature of broadband enables the exchange of richer content, facilitates improved, expanded and more rapid communication, and allows the sharing of a connection with multiple users. Benefits to the economy. Broadband connectivity is helping to establish an information society. It encourages innovation, stimulates growth in an economy, and attracts foreign investment. Returns on investment. Broadband holds the promise of new applications and services that will attract users and help recover infrastructure development costs.

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BROADBAND PENETRATION RATES IN THE WORLD:

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BROADBAND PRICE COMPARISON AMONG COUNTRIES:

Conclusion This focus of this paper has been on ideas and strategies for promoting broadband. While it is clear that there are no universal rules that apply to all economies equally, this paper has attempted to highlight a diverse set of strategies for promoting broadband that have been applied successfully in a diverse set of countries. The aim has been to offer a toolkit of alternatives from strategies that have been used around the world. For the most part, this paper has taken it for granted that broadband promotion is a good thing. While countries such as Korea, Canada, Iceland, Japan, and Hong Kong, China seem to be realizing the benefits of large-scale take-up of broadband, it remains to be seen whether real, rather than merely potential, benefits of broadband will be realized universally. Furthermore, this paper has generally not addressed possible drawbacks of broadband and negative social impacts of its use. Importantly, it is felt that efforts to
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promote broadband should not be followed single-mindedly, but that the full social implications of broadband use, industry convergence, and policy changes should be carefully considered. The term broadband is also very much a moving target. While the broadband of today consists of, for the most part, cable modem and DSL connections, the broadband of the future may very well be based on fiber optic cable or wireless technologies. The implications of this for those actively promoting cable and DSL may be highly significant. Will promoting the broadband of today serve as a necessary stepping-stone for the adoption of future broadband technologies? Will those countries that have low take-up of broadband today lose out on the advantages of a widespread rollout and fall too far behind to catch up? On the other hand, could money spent promoting cable and DSL be better spent investing in a more fundamental rebuilding of the network infrastructure? Will countries currently promoting copper lose out to countries like Sweden, Iceland and Japan that have focused on fiber-optic networks in the long term? For those developing countries without broadband, what technology should they invest in now? Strategies and policies to promote broadband will prove most successful when they do not operate in isolation. Rather, broadband promotion is likely to be most effective when various initiatives and projects are integrated, encompassing all stakeholder groups. Experience has shown that broadband has the potential to impact on a number of different fields, such as health care, education and entertainment, and accordingly, efforts to promote broadband should be closely tied with initiatives in these fields. Finally, in addition to infrastructure, policy and access issues, one of the key concerns for those interested in promoting broadband should be to give users a foretaste of the technology. As they recognize the benefits, demand for broadband will be driven upwards, stimulating the market and ensuring future social and economic rewards of this new technology.

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M-commerce and 4G mobile broadband services Response to the Ofcom consultation on the assessment of future mobile competition and proposals for the award of 800 MHz and 2.6 GHz spectrum and related issues Submission by eBay UK Source: http://blogcmt.com/wp-content/uploads/2012/01/ebay_uk_ltd11.pdf Executive summary According to research commissioned by eBay and carried out by retail experts Verdict Research, mobile commerce is currently worth 1.35bn in sales to the UK economy. That figure is set to grow to 5.82bn by 2016 and to 19.26bn by 2021. The reliability of mobile broadband represents a significant barrier to higher mcommerce sales. According to our research, 64% of consumers believe connection speed is a significant barrier, while 63% cite the reliability of connections, 62% cite the cost of a connection, and 52% cite network coverage. These barriers are having a significant impact on m-commerce sales. eBays research suggests that m-commerce sales could be some 1.29bn higher if these barriers were eliminated almost double the current level of sales. Some parts of the country are worse affected than others. According to eBays research, some 16% of the country is located in an m-commerce not-spot where the level of m-commerce is significantly below the national average. While many m-commerce not-spots are located in sparsely populated rural areas, the problem also exists in a number of significant urban centres such as central London and Swansea. This suggests that other problems such as connection speeds and connection reliability may be inhibiting m-commerce purchases in these areas in addition to network coverage. There is strong consumer support across the board for regulatory action to improve rural mobile broadband coverage, to improve urban mobile broadband reliability, to improve mobile broadband coverage on transport routes, and to keep costs low. When asked to choose a priority from among these options, keeping costs low is overwhelmingly favoured by consumers. Improving coverage on transport routes is the next most popular option. Our evidence shows that unreliable mobile broadband is holding m-commerce back. But at the same time, consumers number one concern is the cost of mobile. Ofcom therefore needs to target its intervention as effectively as possible, requiring greater investment where it will make the most impact for consumers. Based on our research, we believe Ofcom should focus on improving coverage on major transport routes because this is where investment will make the most difference.
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In light of the importance of minimizing costs for consumers, we would encourage Ofcom to use this opportunity to ensure that there is a competitive four-player market in mobile broadband and that all potential players should have an equal chance of purchasing sufficient low-frequency spectrum in order to guarantee the quality of service and speed of connection for consumers. Introduction Mobile broadband services are playing an increasingly important role in peoples lives. The growth of smartphone ownership means that a rapidly growing proportion of the population now has access to an internet connection on the move. According to Ofcoms own figures, 23% of the population used their mobile phones for data or web access in 20101, and that figure continues to grow. According to consumer research commissioned by eBay this year, 43% of the population now owns a smartphone2. As a consequence, mobile broadband is playing an increasingly important role in retail. As the UKs market leader in m-commerce, eBay has therefore undertaken a major piece of research into the current state of the m-commerce market and the scale of the future opportunity. As well as examining the commercial implications of the changes currently underway, we have undertaken an in-depth analysis of consumer attitudes and have sought to identify the barriers which threaten to obstruct the development of mcommerce. This submission sets out our findings. The importance of m-commerce The auction of new 4G licenses for mobile broadband services will deliver a significant boost for m-commerce, resulting in a huge financial dividend for the UK economy. Just as the growth of home internet connections stimulated the development of a huge online retail sector, we now stand on the brink of a similar transformation brought about by mobile. Yet to date, the potential contribution of m-commerce to UK economic growth has not been adequately recognized. In its consultation on the award of new 4G licences, Ofcom explicitly mentions the importance of 4G services in supporting video streaming, social networking, mobile gaming, instant messaging and email. In contrast, it makes no explicit reference to the potential of 4G to stimulate growth and innovation in mobile retail. Research commissioned by eBay indicates that mobile shopping could make a massive future contribution to the UK economy. According to the research, conducted by Verdict Research, the m-commerce market in the UK is currently worth some 1.35bn in sales, and is set to grow to 5.82bn by 2016 and to 19.26bn by 20213. eBay has been at the forefront of developing the m-commerce market. eBay mobile applications are available in more than 190 countries and eight language, and have been downloaded over 35 million times globally. There are up to 380,000 daily visits to eBay.co.uk via mobile apps, and more than 170,000 UK shoppers spend over 30 with the eBay mobile app per week. In 2010, global eBay sales via a mobile device more than
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tripled, generating $2 billion in sales up from $600m in 2009. This is set to double again in 2011 to over $4 billion4. With m-commerce already established as an important and growing force in retail, eBay believes that it is importance for the needs of m-commerce and the views of mobile shoppers to be taken into account by Ofcom when it is considering the issues raised by the 4G consultation. Barriers to m-commerce Although m-commerce is already worth 1.35bn to the UK economy, eBay believes that the economic contribution it makes could be even greater. Mobile shoppers face a number of frustrations and obstacles which currently deter them from spending, a number of which relate to the quality of mobile broadband. We believe that through co-ordinated action, many of these obstacles could be removed, thereby stimulating consumer demand and helping to support the wider retail sector at a time when demand remains flat. eBay commissioned Verdict Research5 to undertake a detailed investigation into the views of consumers into mobile shopping and the barriers which deter them from using their mobiles more for shopping. This investigated a range of factors, some related to the quality of mobile broadband, and others not. Figure 1 summarizes the key findings, ranking the barriers cited by consumers as either significant or very significant.

The key points emerging from this research are: The most significant barriers to m-commerce do not relate to mobile broadband quality. Indeed, the top three barriers are screen size (69%), security concerns (65%) and the lack of website optimization for m-commerce (65%). The speed of mobile broadband is a significant barrier, cited by 64% of consumers. Connection reliability is also a significant barrier, cited by 63% of consumers. Cost too is a significant concern, cited by 62% of consumers.
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Network coverage is the lowest ranked of all the factors, cited as a significant barrier by only 52% of consumers. Through our research, it became clear that there is a degree of variation between customers of different network operators in the level of frustration they feel towards different barriers to m-commerce. We believe that this information could prove useful to regulators in pinpointing where the most serious problems lie. Figure 2 provides a summary of the key results.

These findings underscore the important role that the award of new 4G licences can play in fostering the development of m-commerce, both by improving the reliability of mobile broadband connections and by allowing consumers to enjoy faster connection speeds. It is important that the consumer frustrations identified here are addressed as quickly as possible, enabling network operators to make the investment necessary to respond to consumer concerns. The findings also underline the importance of ensuring that the 4G auction improves the competitiveness of the mobile broadband market. The cost of mobile broadband is a significant consumer concern, and competition remains the best way of ensuring that prices are kept as low as possible. Yet new infrastructure is not the only way that network operators can help foster mcommerce. Security is also a major issue. The research shows that consumers are nervous about sending payment details and personal information over mobile broadband networks. Working together, networks and retailers can play an important role in reassuring consumers about the security of their personal information when they are shopping through their mobiles. Conclusion M-commerce sales are already worth some 1.35bn to the UK economy, and are set to grow fourteen-fold over the next ten year. It is therefore essential for Ofcom to seriously consider the interests of m-commerce when considering what regulatory approach to take towards mobile broadband provision. The reliability of mobile broadband currently significantly inhibits m-commerce sales. Our estimates suggest that lost sales due to poor reliability currently cost the economy some 1.28bn a year. Our analysis shows that these problems particularly affect certain parts of the country, with some 16% of areas being m-commerce not-spots, where m-commerce levels are at least 20% below the national average.
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To address these problems, we call on Ofcom to consider the views of m-commerce consumers when deciding the approach towards coverage obligations and the promotion of competition. In doing so, we believe that Ofcom needs to target its intervention as effectively as possible, requiring greater investment where it will make the most impact for consumers. Based on our research, we believe Ofcom should focus on improving coverage on major transport routes, because this is where investment will make the most difference. In addition, in light of the importance of minimising costs for consumers, we would encourage Ofcom to use this opportunity to ensure that there is a competitive four-player market in mobile broadband and that all potential players should have an equal chance of purchasing sufficient low-frequency spectrum in order to guarantee the quality of service and speed of connection for consumers. Research methodology The consumer polling was conducted by Verdict Research with 1,500 consumers between 11 and 16 May 2011. Verdict Research is the leading authority on UK and European retail markets. Its research publications, consultancy services and news bulletins offer unparalleled analysis on a large variety of retail sectors, issues, geographies and demographics. Estimates for the current and future value of m-commerce sales were calculated by Verdict Research. Verdict uses a variety of sources for its market forecasts and numbers. Consumer research is used to understand current consumer penetration and habits in the mobile space and this data is modelled and sense checked against retailer data and other industry sources. Forecasting is conducted using Verdicts rigorous integrated forecasting model that assesses retails position in the broader UK economy and the relative performance of individual channels, including mobile. It also takes account of macrolevel factors such as demographic change, consumer preferences, evolving technologies and economics. The regional estimate of lost spending as a result of unreliable mobile broadband is calculated by combining eBays regional analysis of mobile not-spots with eBays nationwide estimate of the loss to the economy from unreliable mobile broadband and eBays regional estimate of current m-commerce spending levels. All locational information is based on consumers registered home addresses based on eBays own data.

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Jersey Retail Sales,Q4 2011 Source: www.gov.je/statistics Summary The seasonally adjusted total volume of retail sales in Jersey in Q4 2011 was 6% lower than in the corresponding quarter of 2010; This represents the second consecutive quarter in which the total volume of retail sales has declined on an annual basis; The predominantly food and non-food sectors have each recorded two consecutive quarters of a fall in the volume of retail sales on an annual basis. All retailers Value of retail sales Figure 1 shows the total value of retail sales for the period from 2007 to Q4 2011. The clear seasonality is apparent, with retail turnover tending to be largest in the fourth quarter of each calendar year. Figure 1 Total value (Q1 2007 = 100); non-seasonally adjusted

Comparing the same quarter in a given year with that of a year earlier (Figure 2) indicates that each quarter from the start of 2010 to Q3 2011 had seen an increase in the total value of retail sales on an annual basis1. The latest quarter, Q4 2011, recorded the first decrease in total value on an annual basis for two years.

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The total value of retail sales in Jersey in calendar year 2011 was approximately 730 million. Figure 2 Total Value: annual percentage change; seasonally adjusted

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Volume of retail sales, all retailers The volume index series3 is derived from the value series by use of deflators4 which remove the effect of price changes. The seasonally adjusted total volume index, from which seasonal and calendar effects are also removed, is shown in Figure 3a. Figure 3a Total Volume; (Q1 2007 = 100); seasonally adjusted

As is apparent from Figure 3a, the seasonally adjusted total volume of retail sales in Jersey had experienced an ongoing decline throughout the eighteen month period from mid-2008 to the end of 2009, before seeing some growth in 2010. The first six months of 2011 were substantially flat in terms of the total volume of retail sales. However, following a significant decline between Q2 and Q3 2011 (down by 7% on a quarterly basis) the two latest quarters, Q3 and Q4 2011, have recorded falls in total volume on an annual basis of 5% and 6%, respectively, compared with the corresponding quarters of 2010.

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Figure 3b Total Volume: annual percentage change; seasonally adjusted

Methodology: Retail turnover for each sub-sector is calculated from the respondent businesses. A ratio estimator approach is applied to estimate the total retail turnover separately for each sub-sector, using the appropriate full-time equivalent (FTE) employment data compiled by the Jersey Manpower Survey; Volume data for each sub-sector are derived from value data using price deflators which are base-weighted harmonic means of the corresponding section level indices of the Retail Prices Index; Seasonal adjustment is conducted using the Eurostat Demetra software package. The revision of seasonally adjusted series is based on that of the UK Office of National Statistics revision policy for the Retail Sales Index.

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A GUIDE TO RETAIL IMPACT STUDIES February 2008 Source:Prepared by Civic Economics www.CivicEconomics.com For and with the Institute for Local Self-Reliance www.ILSR.org ANALYSIS OF EXISTING RETAIL ACTIVITY IN THE REGION

OVERVIEW: In the second phase of the study, the analyst develops a thorough understanding of the existing retail activity and conditions within the region. The analyst will: Determine the market area (the geographic area to be studied). Quantify both the demand for and actual retail sales in the market area by line of goods. Quantify retail employment and wages in the region. Develop a more detailed understanding of the regions retail activity through site visits and/or surveys. Determining the Market Area To understand the local retail economy, one must first determine the general boundaries of the retail markets served by the community. Market area patterns of various communities tend to follow consistent rules. The most fundamental is that larger communities have a stronger retail draw than smaller communities. In Maine, for example, Greater Portland and Bangor routinely draw shoppers from a wide geographic area, whereas small towns and villages typically attract only those living in the immediate vicinity. To gain an initial understanding of the boundaries of the market area to be studied, the analyst maps the interconnections between the host community and surrounding communities and applies a formula to each relationship that factors in both distance and size. The result is a reasonable approximation of the market area (also known as the "trade area"). The analyst then makes adjustments to this based on several factors. One has to do with the lines of goods to be offered by the proposed large retailer. Market areas for everyday needs, such as bread or gasoline, tend to be quite small, as even the smallest communities can provide such goods. For less frequent and more expensive purchases, market areas begin to expand greatly. A rural resident may drive further for a good deal on a television than for bread, and further still for a dishwasher or a vehicle. Geographical features, such as mountains or bodies of water, may further alter market areas. In a Colorado analysis, for example, the strong boundary created by the winding passes across the Continental Divide and various roadless areas altered the market area of a mountain city a great deal. In Alaska, ferry routes brought some very distant communities into the orbit of a study community, while nearer communities on paved roads felt little draw. These boundaries are best understood by discussions with local residents and business owners and a review of transportation infrastructure in the region. Finally, market areas in many regions are
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impacted by other factors, such as the presence of tourists, niche specialization in particular communities, or the location of destination retail outlets. Upon taking all these considerations into account, the analyst can identify a consensus market area for the lines of goods at issue in the analysis. Analysts can employ consumer surveying to help determine the extent of market areas, but this may be prohibitively expensive in many cases. Comparing Demand with Actual Retail Sales in the Market Area by Line of Goods Having determined the lines of goods to be sold by the proposed large format retailer and the geographic extent of the impact area or market area, the analyst then quantifies the volume of retail sales in the impact area (referred to as the "supply") and compares those figures with the amount of retail activity expected based on local population and demographic characteristics. This analysis is often referred to as a "retail gap" or "leakage" study. It is a well-established tool of economic analysis and is widely and frequently prepared for communities of all sizes. The purpose of this analysis in this context is to gain an understanding of where new retailers will likely reduce leakage and where they will likely redirect retail sales from existing stores in the impact area. Actual or estimated local sales figures should be established for each line of goods to be studied. Proprietary datasets of sales are available for purchase from various data providers. In large communities, these datasets are generally reliable because public data for larger markets is less often subject to suppression. Suppression is the withholding of public data in order to protect the privacy of businesses or individuals included in the dataset. The smaller the community, the more likely one is to encounter widespread suppression. For example, if a community has only one car dealership, public data will generally not reveal car sales in that jurisdiction. Private sector data providers correct for suppression by applying various methodologies to fill in gaps in the data. In our experience, these datasets are quite accurate, though sales for specific lines of goods in smaller markets may be easily adjusted by the analyst based on real world observations. Actual sales in the impact area are then compared to expected sales in the area. Expected sales, or demand, is based on population and demographic characteristics in the region. Most analysts do not calculate demand in-house, relying instead on proprietary data providers. These data providers, moreover, allow potential demand to be estimated within highly customized geographic boundaries. Although these statistical packages, offered by firms such as Claritas, have a cost associated with them, the fees are generally small and will not affect the cost of such studies in any meaningful way The next step is to compare supply with demand: for each line of goods, how much do actual retail sales exceed or fall short of expected sales? This analysis involves a rather simple process of subtraction. Actual sales for a given line of goods are compared with potential demand in the market area and the difference is expressed as either a surplus (indicating strong local sales and attraction of shoppers from outside the area) or a deficit (indicating weak local sales and leakage to other jurisdictions). Although e-commerce sales can affect retail activity for certain lines of goods, there is no reliable data on internet sales by location. In situations where the presence of internet sales is skewing the results in a meaningful way, the analyst may estimate these sales to correct the problem or provide some discussion of the issue in the analysis. Similar retail surplus/deficit analyses may also be prepared for nearby communities with retail market
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areas. These analyses will provide very clear indications of where residents in the impact area are making various purchases and, conversely, how successful the impact area is in attracting nonresident spending.

FINDINGS: The municipality should expect to receive a single document containing all the analyses and assessments required above. This document should be accessible for the nontechnical reader, yet contain sufficient technical detail to allow for a meaningful review by the permitting authority, and provide sufficient supporting evidence for the findings of fact and the conclusions of law that the authority is charged to make in determining whether the proposed project will or will not have an "undue adverse impact" on the comprehensive economic impact area. The primary document should be supplemented with an Executive Summary, providing highlights of the findings and pointing interested readers to specific locations in the primary document for further review. In addition, appendices should be provided containing legible worksheets, data source materials, and any external studies and surveys cited. Finally, the analyst should be prepared to deliver one or more live presentations of the findings and methodologies and provide a forum for questions to be asked and answered.

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INDIA BROADBAND WIRELESS AND WIMAX MARKET ANALYSIS & FORECASTS 2007-2014,2ND EDITION October 2007 By Sridhar T Pai and Adlane Fellah MARAVEDIS, Telecom Market Research and Analysis Source: www.tonsetelecom.com

Methodology & Assumptions The research was conducted through two main channels: Secondary Sources Maravedis always strives to provide its clients with a new and unique perspective of the industry based on its own research. To ensure that we add value to the information already available to stakeholders in the industry, we reviewed most of the market research available on broadband wireless access in India, including ITU Statistical Yearbook, 2006 The World Bank Development Indicators, 2006 Numerous articles Indian ISP Association Primary Sources Primary research is a lengthy but indispensable process for market r esearch because it yields data neither biased nor distorted by intermediaries. As part of this research, Maravedis and Tonse conducted interviews with the following: All service providers listed in the report The regulatory authorities National account managers and other key representatives of equipment vendors active in the Indian market The survey took place from June to October 2007 and involved discussions with product managers, marketing executives, regulators, technologists and sales people at all organizational levels. We would like to thank all the participants in our survey for their time and contributions.

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Executive Summary The broadband-hungry nation of India might just be waking up to realities. For starters, 2 007 could well become the Preparatory Year of Wireless Broadband. Although the former Minister of Telecommunications in India proclaimed 2007 as the Year of Broadband for India, 2008 will instead become the Year of Wireless Broadband for India. Despite the unmet requirement to free bandwidth from various stakeholders, the key engines for broadband growth the operators are not willing to wait. Genuine Indian innovation is at work as vendors, operators, and system integrators are coming together like neve r before to work with whatever is available to trigger a bandwidth revolution. Leading Indian private operators, as well as incumbents, are working together in narrow 12 MHz channels of 3.3-3.4 GHz to deploy WiMAX services where possible. Notable among these are Reliance, the master operator who currently operates the nations largest CDMA network of over 29 million subscribers (as of July 2007) and has already started commercial WiMAX services in Bangalore, and Aircel, the Maxis Communication Bernhard (M alaysia) owned ISP that has been providing WiMAX-based backhaul services and leased bandwidth for corporations for over a year. The Big Carriers: Rearing to Go A major trend is evident in that in September, two large carriers have brought out RFP/RFIs f or Mobile WiMAX. BSNL will require upwards of 100,000 CPEs (with all options taken over two phases, this count can go up to 200,000) and 1000 base stations across the country. This is apart from a separate BWA/WiMAX requirement for commercial urban broadba nd that is in the works. VSNL, a Tata company, has also released an RFI for a large 802.16e -2005 based system for over 500,000 CPEs in a phased manner. (Note: An RFI does not mean a firm commitment to place purchase orders.) Bharti Airtel is looking to spread BWA/WiMAX to 300 towns targeting 50,000 SME customers in 2007 using a combination of 3.3 -3.4 GHz and 5.8 GHz frequencies. BSNL, which launched the mother of all telco tenders for 60 million GSM lines in 2006, is in the early stages of drafting the RFP for what could become the largest ever BWA/WiMAX purchase requirement from a public - sector operator. The requirement is for 1000 base stations and 100,000 CPEs for a single project. Judging by some of the plans of Reliance, we believe that the companys extended plans include a massive requirement for 1 million CPEs over the next 12 months. Parts of the plan are already frozen, and vendor evaluations are undergoing completion. Of course, the realization of the entire plan may be subject to political and technology issues such as rapid resolution of spectrum issues. However, we believe that in a worst case scenario, these projects will still move forward with at least 15% real deployment in the next 8 months. One of the impediments identified in our Indi a BWA/WiMAX Report 2006 was that the WiMAX CPE pricing may become a strong barrier in early penetration of WiMAX services. Leading edge Indian vendors, such as Telsima, breaking the price barrier by over 50% as early as Q2 2007, has broadened the possibilities. Reliance, unsurprisingly, has brought WiMAX closer to reality by adopting a market-friendly tariff plan that allows a subscriber to sign up at a minimal cost of about Rs 700 per month ($17) in Bangalore, where the service has first been launched. Rel iance has always been a massPage67of98

market leader, and it is not surprising that the company is leading the way in taking broadband to the masses at the best prices possible.

BWA/WiMAX: It is Brewing Hot in Here Tonse believes that the Indian BWA/WiMAX market w ill continue growing despite the roadblocks. We conservatively estimate that in the next 12 months, about 250,000 CPEs and about 5000 base stations will be sold in India. If some of the larger plans are realized, as many as 10,000 - 12,000 base stations and about 500,000 CPEs might be consumed by this bandwidth starved nation. At current equipment costs and bulk discounts expected by Indian operators, the total CPE / BS equipment market for the year may be between $50 million and $120 million. This is a substantial jump over the last year and could signify the eventual emergence of one of the worlds top 3 WiMAX markets. WiMAX CPE prices have declined from $300 to about $140 without a full -feature set. Plain vanilla WiMAX CPE prices will drop below $100 by Q 1 2008 for large quantities. Medium-size deployments (50,000 CPEs) will start materializing by December 2007, and large scale deployments (100,000 CPEs) will have begun by March 2008. The rollouts of these networks will be in a phased manner, as there will be a fair amount of time spent in radio -tuning, repositioning of towers, and addressing customer complaints.

The Land Grab for Access will Begin 1. The opportunity for the greenfield BWA/WiMAX operator is interesting. While spectrum will be the biggest challenge, these aggressive players could create interesting niches through geography, targeting specific verticals such as SME, or offering a mix of broadband VAS (Value Added Services) as well as voice and bundled data to shake the competition. The ongoing economic expansion has already created several such niches: retail chains, medical tourism, and tele-education, which are prime candidates for long -haul wireless IP applications. 2. At least one of these innovators is bound to chart a new path and shake up t he restricted VoIP space in India. The large integrated service providers have not initiated the service because there is an adequate number of low -cost voice services today, starting with mobile service. 3. We expect that the new crop of Wireless ISPs may i nvest or co-invest in an international gateway and usher in more transparent pricing to the retail user. This could throw open the flood gates to competitive domestic bandwidth rates, which will bring down international calling and data service price point s in general. 4. The incumbent ISPs will continue to adopt a heterogeneous mix of wired and wireless technologies where possible, to mix and match their legacy copper/fiber and air waves to deliver bits to the home with one objective: kill outbound churn an d build market share. The wireless solution will again be a mix of licensed and unlicensed where possible, to provide an end-to-end solution.
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The explosive VAS application revenue from the mobile world has demonstrated how important it is to begin service introduction early, above and beyond the transport fabric. The promising IPTV and interactive television are one step away once the pipes are laid. In some cases, such as IPTV, the content management platforms are ready and massive investments have been made in convergent billing solutions, including BSNLs recent order of $300 million dollars for a convergent billing platform. The challenge seems to have shifted to the place they least expected: the access, which has been their traditional strength. The incumbency position is strong yet vulnerable because artificial roadblocks such as not opening copper to unbundling are not significantly hindering competitors.

Indian BWA/WiMAX Operations and Challenges India probably will see the worlds lowest end -to-end cost for WiMAX service and will drive costs down further than any other market. Integrated operators such as Reliance will erect WiMAX towers along with CDMA towers and derive further cost advantages. Third-party radio-tower companies have emerged wi thin the last year in India. They offer managed tower services for cellular operators. An extension of this would be to provide nationwide WiMAX tower services in managed -service mode. Bringing together thousands of towers is bound to create additional cos t benefits to the WiMAX operator. Currently, cellular operators are deriving a 15 -18% cost advantage from shared tower services. (A shared tower service is a managed service provided by a third party to multiple operators. The individual operators will not own the tower infrastructure but will pay a rental for bandwidth used on a monthly basis.) One of the challenges the industry will continue to face is availability of trained RF wireless transmission engineers and technicians. The industry apparently is already reeling under a severe shortage of technicians for field support and a lack of specialists. Policy and Licensing: Confusion Abounds as Spectrum Aberration Explodes It is well known that the government is already working on various fronts to relea se spectrum and make the bands available for commercial telecommunication. However it appears as if the proverbial Pandoras box may have been opened. Here is a summary of the various issues that have emerged. As of September 11, 2007, the Department of Telecommunications (DoT) of India and the Indian Defence Ministry have finalized a memorandum of understanding (MoU) that discusses a roadmap for vacating 25 MHz of spectrum for current and third -generation telecom services. The spectrum conflict appears s to be snowballing into a heavy business and political battle in the power corridors of New Delhi Indias capital. Since the middle of July 2007, a series of unhealthy conflicts has created confusion and uncertainty about the future of the Indian mobile industry.
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The bitter war of words between GSM and CDMA players took an ugly turn August 2007, as the two industry bodies representing them accused each other of using more spectrum than was allowed during the early days of telecom in India, thus promptin g the Ministry to consider a study into how this situation came about.

An Urgent Breakthrough in the Spectrum Issue is Critical To illustrate why the overall spectrum debate has been difficult to resolve, some of the key areas of contention are listed below. AUSPI (Association of Unified Service Providers of India), the body that represents CDMA operators, does not agree with the COAIs (Cellular Operators Association of India, the GSM body) position on additional spectrum for GSM operators. Operators disagree regarding spectrum ownership following M&A activity, whether it involves GSM entities or a mixture of GSM and CDMA entities. DoT disagrees with some of TRAIs recommendations. TRAI disapproves of the current administration and management of spectrum , the agency handling it, and its persistent inefficiencies that have contributed largely to the spectrum mess. But DoT does not acknowledge these problems. The Ministry of Defence demands additional time and a full -fledged alternative fiber optic network before giving up the spectrum in its ownership. BSNL does not accept the charges proposed by Defence for building its alternative fiber network. DoT is willing to pay BSNL for only part of the costs charged by Defence. Other areas of disagreement include fee structure for additional spectrum requests from existing 2G operators, green-field license applicants, ISPs, and new Wireless ISPs who could be looking at WiMAX.

Market Forecasts In 2006, the BWA equipment market opportunity in India was a mere US$2 5 million, up from US$6 million in 2005, and was dominated by small deployments for backhaul applications to enterprises with outdoor equipment. However, Maravedis and Tonse believe that with the upcoming spectrum opening, the certification of new equipment, and lower-cost CPEs, the annual 3.3 and 3.5 GHz equipment opportunity will increase f rom US$4 million in 2005 to a peak of US$ 280 million in 2014. Maravedis and Tonse estimate that the Internet subscriber populat ion will grow from the current 10 million to above 48 million by 2011. The Internet user population in India will have exceeded 200 million. This will be made possible by lower cost PCs and notebooks, CPEs below US$40, and cheaper broadband service. Maravedis projects an accumulated 21 million BWA subscribers by 2014, counting both residential and business segments. WiMAX subscribers should represent the majority of this figure. Approximately 66% of the WiMAX subscribers will be mobile 02.16-2005,
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predominately residential, while fixed WiMAX wil l continue to be driven by large corporations and, to a lesser extent, by SME customers.

Conclusions and Recommendations The Indian market for BWA/WiMAX will continue to be one of the most sought after markets for global equipment vendors. The nation promises to offer huge, consistently high growth for the next several years, judging by its extremely low broadband penetration rates (under 3 million for a population of over 1 billion). The government has initiated significant progress in resolving a chaotic spectrum scenario with too many interested parties (GSM lobby, CDMA interests, ISPs, incumbents, military, and other users) and a growing list of new applicants struggling to gain entry into the potentially lucrative telecom service business. However, muc h more needs to be done, and fast, if a semblance of a fair settlement is to be achieved. The 3G policy is already off by a year, and delays are spawning gaps in an extremely under penetrated broadband market. Several government agencies such as WPC, TRAI, and DoT are in disagreement on vital issues such as spectrum administration and management. WPC needs to move to a modern, automated, open operation and adopt a more consultative approach involving industry experts and ecosystem vendors to develop market -friendly policies. The entire spectrum -allocation and administration mechanism has to become holistic, more transparent, open, accessible, and market-friendly. The governments approach to ISPs, cellular operators, and potential new license applicants needs to be fair. The ISP community appears to be reeling under a counterproductive license regime that requires special permits to provide most services. There is an urgent need from the Indian equipment vendor market for policy makers (DoT and the Ministry) to introduce methods to encourage small technology start -ups to survive and grow in the domestic telecom markets. Eventually such initiatives could allow telecom companies from India to become global. India can become one of the largest BWA/WiMAX mar kets. To take advantage of the opportunity, the authorities have to introduce a plan to bring small tech start -ups into the local market instead of them having to compete against large global vendors. This would foster a rich native vendor ecosystem in this space. If done appropriately, this could enable wireless technology exports from India to become a fine complement to the success of the software industry.

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Case Study: BROADBAND IN SRILANKA, GLASS HALF FULL OR HALF EMPTY?

Source: http://www.itu.int/osg/spu/casestudies/index.html#broadband Sri Lanka, an island nation located in the Indian Ocean just south of India, has lately experienced an explosion in the use and availability of broadband services. The increase is primarily due to the high rate of adoption of third generation (3G) mobile technologies such as HSPA and HSPA+ dongles and associated SIM cards. This trend is typical of Sri Lanka and many other South Asian countries which do not have access to wide-spread copper last mile connectivity, and therefore are reliant on wireless networks to increase access, be it simple voice or broadband. Several factors have contributed to Sri Lankas success in connecting its citizenry to the internet via mobile broadband: Innovative Business Models making services accessible to all: The increase in mobile broadband rides on the wave of extremely high mobile voice growth, enabled by successful innovations by the Sri Lankan (and Asian) operators. Faced with low ability to pay of many consumers in the region, the operators could have settled into serving the high-end, rich consumers. However, because the regulators and policy makers enabled new entry into the market, the intense competition forced operators to innovate in such a way as to be able to profitably serve even the poorest consumers. Network costs were reduced drastically by sharing passive and active infrastructure, by outsourcing key parts of the operation including even the management of the core network. Cost of billing was completely dispensed with and credit risk eliminated by moving to a pre-paid model. Distribution costs were minimized by enabling electronic reloading (e-reload), thereby eliminating cost of printing and distributing top-up cards for pre-paid users. Finally, even consumers with very low and very variable incomes were attracted to the market by enabling extremely small top-ups at any time (as low as USD 0.50 or less). This budget telecom model1 based on low costs high volumes (high minutes of use per user enabled operators to make positive EBITDA margins even though the Average Revenue per SIM was low, around USD 2 5. This budget model of telecom that was first developed for the voice business is now being applied to mobile broadband in Sri Lanka. In particular, enabling pre-paid mobile broadband and allowing for very low value re-charges, the youth (who have highly variable incomes) have been brought into the mobile broadband market. The two first movers into the 3G space (Dialog Axiata and Mobitel) offered special promotional discount packages of up to 50% specifically for students. These early adopters created significant interest in mobile broadband. By 2008, the English and Sinhala blogosphere in Sri Lanka was barely mentioning fixed broadband; all the discussions and debates about quality and price was about mobile broadband.
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Early availability of 3G spectrum: Of course all of the above was made possible because 3G spectrum was made available early to the operators in Sri Lanka. Here, the regulator deserves credit. As far back as 2003 test frequency was made available. By 2006, commercial 3G was launched. This is in sharp contrast to India which only managed to allocate 3G spectrum in 2010. Early access to spectrum enabled Sri Lanka to become the first Asian nation to offer 3G services. Governments e-development agenda motivating investment: Apart from the regulator, the ICT Agency of Sri Lanka (ICTA) has had a major focus on broadband in the country. ICTA is the implementer of e-Sri Lanka, a cross-sectoral ICTenabled development program for the whole country. ICTA set the ICT agenda through a series of comprehensive supply and demand side activities/projects (for example, setting up network of over 500 rural telecenters, announcing plans for a least-cost subsidy scheme to build and operate a fiber backbone in rural areas, development of egovernment applications, providing ICT skills to citizens from all walks of life, promoting investment in Business Process Outsourcing which in turn drives the demand for high speed connectivity) and helped create a significant buzz about the potential demand for BB in the country. All this helped increase awareness about opportunities afforded by ICTs. Operators were motivated to invest in the network infrastructure in light of upcoming demand. However, having reached this stage, Sri Lanka needs to overcome several challenges if it is continue on its early success and make broadband a truly mass-market product instead of the niche popularity it still enjoys. A key challenge is that of bringing a product of adequate quality to consumers. Budget broadband/budget telecom models mean low cost and therefore low prices. But they also mean low quality. This is indeed the case with Sri Lankan broadband. While the Sri Lankan mobile broadband performs better than Sri Lankan fixed broadband various quality of service measures, when compared with the developed world Sri Lankan consumers get less value for money on broadband. Part of the reason is bad advertising (promising broadband speeds that are possible theoretically, but not in reality). But a bigger part is the infrastructure in particular, bottlenecks in international connectivity due to high prices. The other challenge for operators is to keep up their investments necessary to move to the next technology cycle in face of declining margins. While at least two mobile operators have announced LTE network deployments, extending these upgrades beyond the population centers will prove challenging because of revenue and margin erosions due to intense competition.

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Retail broadband Sri Lankan retail users (consumers and businesses) have a choice of broadband technologies and service providers to choose from. All mobile operators have nationwide coverage of basic voice and GPRS services. Dialog and Mobitel also provide 3G/3.5G coverage in the majority of the country including the formerly war torn North East (3G coverage is still not available in low density population areas). Etisalat is in the process of investing to
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increase its 3/3.5G footprint.31 Airtel covers the major population centers of Colombo, Galle, and Kandy with 3G. At the time of writing, both Dialog Axiata and Mobitel were engaged in LTE trials in Colombo. Mobitel had also signed agreements (on tax free concessions) with the board of investment to invest in its LTE network.

Assessing Performance: Glass Half Full or Half Empty? On one hand, Sri Lankas fixed broadband penetration leaves much to be desired, with only a small portion households being served by fixed copper broadband, and an even smaller portion of the served households adopting ADSL. Whether fixed wireless (especially newly emerging 16.e WiMAX) will prove successful is unclear because these technologies/services are only just entering the market. However mobile broadband has stepped in to fill the void Sri Lanka has the second highest level of mobile broadband penetration in South Asia (only behind Maldives, a much richer country) and it has the lowest prices. Though overall adoption is still low, mobile broadband is experiencing phenomenal growth. Many factors contributed to this success, as discussed below. However, the path for continued growth for mobile broadband is far from certain, given the socio-economic conditions of the country and competitive dynamics between operators. These factors are discussed in the following section. What worked? Early availability of 3G spectrum The Sri Lankan regulator was one of the first in the Asian region to make 3G spectrum available back in 2004 when it authorized its use for testing. By 2006, this spectrum was allocated for commercial use to all operators at a charge of around USD 5 million. Not
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only was 3G spectrum made available at the time, but was thereafter available to any operator who paid the same price. This eliminated land-grab type behavior that would have been otherwise created by a one-off spectrum auction and enabled operators to enter the 3G market when it made most sense to them based on their assessment of trade-offs between early entry vs. waiting for the right time in their capital investment cycle. Though the government arguably lost potential income through this allocation method, it did make spectrum available on a non-discriminatory basis to all operators, and at a relatively low price. Once the primary barrier to mobile broadband investment was removed (i.e. spectrum was made available), operators were quick to invest. Dialog launched South Asias first commercial 3G network in 200672 and other Sri Lankan mobile operators have followed suit. Availability of 3G spectrum and 3G services is in sharp contrast to the situation in many of Sri Lankas neighbors, most notably India which did not allocate it till until 2010. Sri Lanka is keeping up this track record, and has made spectrum available for LTE networks, which are currently being tested by two operators. Innovations by operators The second key driver of mobile broadband stems from dynamics of an extremely competitive mobile industry in Sri Lanka. Market entry has been liberal with a relatively high number of operators. Once the market got beyond the duopoly situation, and disruptive third and fourth operators entered, serious competition set in, driving down prices. In order to maintain margins and grow the market, operators could not continue to cream skim (service the rich or those at the top of the socio-economic pyramid who have high ability to pay) but had instead to reach the masses and the poor. The operators innovated by moving towards a high volume, low cost network business model characterized by, a) outsourcing of network operations, leading to significant reduction in network costs, b) sharing of passive and active infrastructure, without regulatory obligation, further reducing operational costs, c) eliminating credit risk and cost of printing invoices by offering pre-paid service, d) catering to variable incomes of the poor by enabling extremely small re-charge amounts on pre-paid services (as low as USD 0.50 top-ups) and e) even eliminating scratch cards used for topping-up pre-paid services by moving to electronic re-charge, saving more costs. This business model is characterized by extremely high network utilization and low Average Revenue per User (ARPU) and has enabled those at the bottom of the socio-economic pyramid to become mobile voice and SMS users. The same model is now being extended to mobile broadband. Faced with high competition in voice, operators are moving to other services, and data is the first target. While many rich or some middle classes households may have access to copper wire (and therefore ability to get ADSL connections), most other do households do not. Therefore wireless is the only option for many. Operators are meeting the demand with reasonably priced HSDPA dongles (at under USD 50 per dongle) and data plans (unlimited plans ranging from USD 4 to USD 27 per month). By enabling pre-paid top-ups, operators are eliminating the need for a monthly contract, further removing barriers to entry by those on low or irregular incomes. And by targeting students (e.g. Dialog offered them HSPA
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dongle and package discounts of up to 50% in the early days) they have managed to capture early adopters. Sri Lanka has also traditionally been a leader in mobile telephony in South Asia and often the first to launch innovative new networks and applications. Dialog was the first 3G operator in South Asia and Mobitel the first 3.5G. This trend continues today HSPA was first launched in South Asia by Dialog and Mobitel was first with HSDPA and HSUPA. At least 2 operators are running LTE trials at the time of writing, with plans to invest and launch LTE within 1 2 years. The mobile operators are on a constant innovative cycle, by matching each others investments into faster, more cost-efficient technologies in each iteration.

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BROADBAND AS A COMMODITY:HONG KONG, CHINA INTERNET CASE STUDY InternationalTelecommunicationUnion Background Promotion of the Internet has become a top priority in many economies around the world. Some are now moving beyond basic Internet access to promoting highspeed broadband infrastructure andnetworks. The deployment of broadband infrastructure is increasingly perceived as important for overall economic and social development. According to the Chairman of Singapores information and communication technology regulatory agency: Broadband is a defining technology of our age. In the future, no nation can claim to be of developed status without good broadband access. Central to broadband development are mass-market technologies for end user access. In that respect, the International Telecommunication Union (ITU), the United Nations specialized agency for telecommunications, has embarked on a series of case studies researching the development of the Internet. This study looks at the development of the Internet and particularly broadband access in the Hong Kong Special Administrative Region of the Peoples Republic of China (hereafter referred to as Hong Kong). Methodology The Mosaic Group2 has developed a framework for characterizing the state of the Internet in an economy. They consider six factors, each of which has five values ranging from zero (nonexistent) nonexistent) to four (highly developed). The factors are as follows: Pervasiveness: a measure based on users per capita and the degree to which nontechnicians are using the Internet. Geographic dispersion: a measure of the concentration of the Internet, from none or a single city to nationwide availability. Sector absorption: a measure of the degree of utilization of the Internet in the education, commercial, health care and public sectors. Connectivity infrastructure: a measure based on international and domestic backbone bandwidth, exchange points, and user access methods. Organizational infrastructure: a measure based on the state of the Internet Service Provider industry and market conditions. Sophistication of use: a measure characterizing usage from conventional to highly sophisticated and driving innovation. This framework is used to assess the situation in Hong Kong with a particular focus on broadband Internet access.

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Conclusions There are three key factors affecting broadband take-up in Hong Kong: As competition has intensified, prices have dropped sharply, particularly over the last year or so. In any case, Hong Kongs relatively high per capita income minimizes cost as a major barrier. Availability of broadband is high, a reflection of Hong Kongs compact urban geography and vertical habitation. If someone wants broadband, they can obtain it reasonably quickly. ADSL covers 95 per cent of the households and cable modem is available in 85 per cent of homes. Usage is intense with the frequent users (defined as those who had used Internet at least once a week) spending 11 hours a week on the Internet. According to a non-government survey, Hong Kong ranks second in the world in terms of the number of hours the average user is on the Internet. This heavy usage drives demand for fast, always-on Internet connections. A related factor is that Hong Kong has been connected to the Internet since 1991, which has allowed it to build up a base of savvy sophisticated users. While some factors for Hong Kongs broadband explosion are tied to its unique situation (compact size, long period of time connected to the Internet), one factor that is replicable for other economy is the high level of competition. It is unlikely that there is this degree of broadband competition anywhere else in the world. There are 15 retail broadband providers in Hong Kong, resulting in intense competition for potential customers. As one broadband provider notes: Competition is expected to be keener this year as the marketplace approaches commoditisation.1 This commoditization is reflected in stands set up in the street to hawk broadband Internet access as if it was apples or oranges. In order to entice potential users, providers offer everything from toasters to stereo equipment. In Hong Kong, broadband is no longer perceived as a luxury but a massmarket product. As a result, it is no longer a question of if users will get broadband but when. At current trends, virtually all of Hong Kongs Internet subscriptions will be broadband by the year 2005. This rapid conversion to broadband has two implications. One is technological, the second social. Technically, the increasing penetration of broadband implies that the majority of Hong Kongs telecommunication traffic is IP-based. One wonders how much longer it makes sense to maintain two different networksthe telephone network based on circuit switched technology and a second based on packet switched IP. At a certain point perhaps 2005 when PCCW will have a fully IP network the crossover to a packet data telecommunication network may take place. But for that to happen, much more work needs to be done in the area of provisioning IP-based voice services and providing IPbased terminal equipment (e.g., telephone sets). The second implication revolves around the use to which broadband networks are put. Though broadband applications are available in Hong Kong, for the most part they are entertainment-based. Even for those applications, only one third of Hong Kongs users are using them. For the most part, usage of the Internet in Hong Kong revolves around the mundaneemail, surfing web sites, etc.with broadband mainly attractive because of its convenience (e.g., faster speed, not tying up the telephone line, always on). A snapshot of Hong Kongs ereadiness, as reflected in a widely used framework, shows that one of the few areas it
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does not obtain the highest ranking is sophistication of usage. Much more work is needed to develop broadband applications and to entice users to use them. Once that happens, then Hong Kong will have transitioned from a broadband market to a broadband society.

FIG: STATE OF INTERNET IN HONG KONG

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CHAPTER 3 RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY 3.1 RESEARCH DESIGN: THE RESEARCH DESCRIPTIVE. DESIGN USED HERE IS EXPLORATORY CUM

EXPLORATORY RESEARCH Exploratory research often relies on secondary research such as reviewing available literature and/or data, or qualitative approaches such as informal discussions with consumers, employees, management or competitors, and more formal approaches through in-depth interviews, focus groups, projective methods, case studies or pilot studies. The Internet allows for research methods that are more interactive in nature. The results of exploratory research can provide significant insight into a given situation. In this project I have done the exploratory research by referring to various journals and white papers etc, for doing my Literature Review thoroughly.

DESCRIPTIVE RESEARCH Descriptive Research: Finding out the Sales figures of the Mobile Broadband data cards of the brands of Tata, Reliance, Idea, MTNL/BSNL and MTS make. This will include the study of primary data. Collection of Primary data through questionnaire filled by the Retailers who sell Data Cards of single brand or multi-brand. And thorough secondary researches from sources like the Internet, Journals etc. Sampling Technique: Random Convenience Sample size: 30 Data Card Selling Retailers Sample area: Retailers/Distributors in Delhi NCR. Sample unit: USB Based Data Cards selling Retailers. Sample frame: The Retail Manager in shift

A sample of the questionnaire, which was used for collection of primary data, has been attached in the annexure at the end of this report.
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Instrument for Data collection: Questionnaire The primary data was collected with the help of a non disguised well structured questionnaire based on dimensions related to channel management and a channel performance metric structure, apart from the questionnaire being used for data collection, personal discussions were also conducted with the respondents to get further Information. Descriptive research design is a scientific method which involves observing and describing the behavior of a subject without influencing it in any way. Descriptive research does not fit neatly into the definition of either quantitative or qualitative research methodologies, but instead it can utilize elements of both, often within the same study. The term descriptive research refers to the type of research question, design, and data analysis that will be applied to a given topic. Descriptive statistics tell what is, while inferential statistics try to determine cause and effect.

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3.2 DEFINING DATA AND SOURCES OF DATA DEFINING DATA:

To analyze the sales figure of the sales of Mobile Broadband data card of the following operators:

a. Reliance b. Tata c. MTS d. Idea e. BSNL

SOURCES OF DATA:

I. Primary Data through Descriptive Research Design:-

The Primary data collection for the purpose of my research was collected from the Retailers and resellers selling USB Based Mobile Broadband data Cards of different Vendors and Operators, which operates either on the GSM or CDMA Network or both. I have considered the Data Cards Brands as Tata, Reliance, Idea and MTS for the purpose of my research. The retailers were presented with a Questionnaire in their Retail shops where they had to respond to certain direct questions related to the sales of the Data Cards in their Retailer.

II. Secondary Data through Exploratory Research Design:-

The Secondary data collection for the purpose of my research was collected and gone through from the Internet, White Papers and journals either in the form of Case studies or research papers published by Consultants, TRAI, DOT, ITU or organizations working in the area of Mobile Broadband Service.

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3.3 METHODS OF DATA COLLECTION

I. Primary Data Collection Method: Primary data was collected from the Retailers selling USB based Mobile Broadband data card Dongles in the area of Delhi and NCR in a Random order. The retailers were asked to fill up a questionnaire containing questions regarding the sales of Data Cards and the sales figures of different brands.

II. Secondary Data Collection Method: Secondary data was collected and gone through from the Internet, White Papers, Case studies published either by consultants, Organizations, ITU, TRAI and DoT. The articles were related to Mobile Broadband market and sales either directly or indirectly.

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3.4 ANALYSIS OF COLLECTED DATA

Analysis of First Objective of my Research:

According to the question asked:

NumberofUnitsofDataCardssoldcorrespondinglytovariousoperators:

Reliance Netconnect

MTSMblaze

TataPhoton

After the analysis of the Primary data collected in the form of the Questionnaires from the Retailers selling Data Cards of different Operators it was found that, 456 units of Reliance, 219 units of Tata, 165 units of MTS, 258 units of Idea and 6 units of BSNL Were sold by 30 randomly selected Data Card retailers in a month in the region of Delhi and NCR.
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Idea Netsetter

BSNL

500 450 400 350 300 250 200 150 100 50 0

Sales/Month Sales/Month

Analysis of Second Objective of my Research:

Aftertheanalysisofthefirstobjective:

To identify the Market Leader of Mobile Broadband Service Provider based on the analysis conducted.

0% 23% 41% Reliance Tata MTS Idea BSNL

15%

21%

After the analysis of the sales figure per month by all the 30 retailers of different brands, it was identified that Reliance is the Market leader, among all the 5 Brands of Data Cards sold by the retailers in the regions of Delhi and NCR. Market Share of Data Card Brands are as follows: Reliance: 41% Tata: BSNL: 21% less than 1 %
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MTS: Idea:

15% 23%

CHAPTER 4 PRESENTATION AND ANALYSIS OF DATA

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PRESENTATION AND ANALYSIS OF DATA After the responses collected in the questionnaires from the Data card Retailers were analyzed, it was found that the different brands of Data cards that were sold by them in 1 Month() were as follows: 456 units of Reliance, 219 units of Tata, 165 units of MTS, 258 units of Idea and 6 units of BSNL After analyzing the sales figures of the Data cards sold by the retailers of different makes, the Market Share was found to be as follows: Market Shares are as follows: Reliance: 41% Tata: MTS: Idea: BSNL: 21% 15% 23% less than 1 %

Hence, it can be incurred that, Reliance is the Market Leader in the Data Card based Mobile Broadband Market in the Region of Delhi and NCR.

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CHAPTER 5 CONCLUSION AND SUGGESTIONS

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CONCLUSION AND SUGGESTIONS

After the analysis of the primary and secondary data, both from the questionnaires and journals and articles, it can be concluded that Reliance Data Card based Mobile Broadband Dongles were more readily sold by the Data Card Retailers and has a sales figure of 456 Units in a Month among 30 such multi Brand Retailers.

Total Number of Reliance Data Cards sold by 30 retailers in a month Total Number of Tata Data Cards sold by 30 retailers in a month Total Number of MTS Cards sold by 30 retailers in a month Total Number of Idea Cards sold by 30 retailers in a month Total Number of BSNL Data Cards sold by 30 retailers in a month

= 456 = 219 = 165 = 258 = 6

Also, after the analysis of the sales figures of different Brands of Data Cards, it was found that Reliance Data Card Dongles stands as the Market Leader among other 4 Brands of Data Cards of the operators.

It is to be understood that, all these commonly selling 5 operators Data Cards are manufactured and installed for commercial use by different Network and Equipment service providers, both National and International based organizations.

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CHAPTER 6 BIBLIOGRAPHY

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BIBLIOGRAPHY Web Links: http://www.connectindia.in/data-cards.htm http://www.datacardsinindia.com/ http://broadbandforum.in/dial-up/6246-data-card-in-india/ http://www.indiabroadband.net/mobile-broadband/28807-data-cards-laptops-india.html http://www.broadbandforum.co.in/india-internet/282-wireless-data-cards-india.html http://www.medianama.com/2010/03/223-bsnl-3g-data-card-tariff-evdo/ http://www.socialblog.in/data-cards-in-india/ http://www.aprg.com/ http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats http://www.researchictafrica.net/home.php http://us.toshiba.com/computers/research-center/technology-guides/3g-mobilebroadband/ http://www.isuppli.com/Mobile-and-Wireless-Communications/News/Pages/Tablets-toPower-Growth-of-Mobile-Broadband-Market-in-2011.aspx http://www.itu.int/ITU-D/ict/statistics/ict/index.html http://www.itu.int/net/itunews/issues/2010/03/09.aspx http://www.itu.int/ITUD/ict/newslog/Mobile+Data+Card+Sales+Nearly+Quadrupling+By+2011.aspx http://www.cybermedia.co.in/press/pressrelease137a.html http://tataindicomphoton.com/tata-photon-data-card/ http://www.reliancenetconnect.co.in/ http://mtsindia.in/ http://www.ideacellular.com/ http://www.bsnldatacard.com/ http://voicendata.ciol.com/content/news1/111122804.asp http://www.ciol.com/Technology/Networking/Products/Intex-launches-3G-wireless-datacard/160434/0/ http://www.ciol.com/Technology/Mobility/News-Reports/Intex-launches-3G-wirelessdata-card/160695/0/ http://www.marketresearchworld.net/index.php?option=com_content&task=view&id=22 38&Itemid=77 http://www.infonetics.com/pr/2010/1Q10-2G-3G-Mobile-Broadband-MarketHighlights.asp http://broabandtrafficmanagement.blogspot.in/2010/04/infonetics-research-mobilebroadband.html http://www.businesswire.com/news/home/20120126005670/en/Best-Ever-MobileBroadband-Sales-Strong-Cash-Flows
www.ericsson.com

http://www.teleread.com/chris-meadows/mobile-hotspot-sales-down-atts-femtocellscause-controversy/

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CHAPTER 7 ANNEXURE

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ANNEXURE-I Questionnaire Sample

NameofRetailer:___________ AddressoftheRetailShop: ContactNumber:

1. DoyousellMobileBroadbandDataCardsinyourretailer? Yes No 2. WhichofthefollowingBrandsofDataCardsdoyousell(Ticktheonesyoudo)?

Tata (Docomo/Photon) MTS MBlaze

Reliance Netconnect Idea Netsetter BSNL/MTNL Data Card

3. How many Units of Data Cards do you sell in 1 Month on an average?

(Please specify the number of units sold)

Tata (Docomo/Photon)

Reliance Netconnect

MTS MBlaze

Idea Netsetter

BSNL/MTNL Data Card

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ANNEXURE-II DETAILS OF RETAILERS

Reliance World, E-24, Netaji Subash Marg, Daryaganj, New Delhi 110002 Reliance World, Shop No. S-37, Main Market, Near Evergreen Sweets, Green Park, Delhi 110016 Reliance World, D-115-116, Fateh Nagar, Jail Road, New Delhi 110018 Reliance World, 29 UA Jawahar Nagar, Bungalow Road, Kamla Nagar, Delhi 110007 Reliance World, 5A,Competent House, Jagatpuri Chowk, Krishna Nagar, New Delhi 110051 Reliance World, K-3, Alankar Road-2, Central Market, Lajpat Nagar, New Delhi 110024 Reliance World, 6, Community Centre, New Friends Colony, New Delhi 110065 Reliance World, A-4/34, Paschim Vihar, New Delhi 110063 Reliance World, 1/2 East Patel Nagar, New Delhi 110008 Reliance World, A-7 Saraswati Vihar, Near Deepali Chowk, Outer Ring Road, Pitampura, New Delhi 110034 Reliance World, E-18, NDSE Part 2, South Extension, New Delhi 110049 Reliance World, C-40 Community Centre, Basant Lok, Opposite Priya Cinema, Vasant Vihar, New Delhi 110057

LOVE KUSH COMMUNICATION 35/2, Old Rajender Nagar, Near Water Contact Person: Pratibha Varshney Contact No.: 9136060045 Email Address: neerajvarshney123@gmail.com R K COMMINICATION 68/5375, Regar Pura, Karol Bagh, Delhi-110005 Hemant Vijay 9136047370
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Tank,

New

Delhi-110060

rk.mts@rediffmail.com P K ENTERPRISES P-33, West Patel Nagar, Delhi-110008 Shayam Lal 9136065500 brpkenterprises@gmail.com BARKAT COMMUNICATION 9201/3, Gali No.4, Sadar Thana Road, Multani Dhanda, Paharganj 110055 9136061626 brbarkatcommunication@gmail.com VINSON MOBILE CENTRE 9136055133 80, Yusuf Zai Market, Connaught Place 110001 TELECOTTAGE 9136047659 436, Jheel Khuranji, Opp Taneja Sweets, Delhi-110051 Avinash Gupta 9136060057 avi23@live.com GEETA TELE SERVICES F 8/10, Mandir Marg, Krishna Nagar, Delhi-110051 Saurabh Dewan 9136060059 geetateleservices@gmail.com D.S. ENTERPRISES A-31/103-D, Road Mukhtar Ahmad 9136060056 3250 dsentp@yahoo.com No.66, Main Road Maujpur, Delhi-110053

SOHAM TRADERS 9136046701 6/34, Street No 9-10, 60 Feet Road, Vishwas Nagar, Delhi-110032 Ashok Kumar Gupta 9136060055 3251 ng22in@gmail.com ASHOKJEE TRADING COMPANY G-6, Shop No. 4, Dilshad Colony, Ashok Kumar 9136060077 9136046649 ashokjeetrading@gmail.com Tata DOCOMO AddressN-44, CANNAUGHT PLACE,
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Shahdara,

Delhi-110032

Delhi, New Delhi-110001 Tata DOCOMO Opp. Darida Kalan,AddressII/1891, CHANDANI CHOWK,, OPP. DARIDA KALAN,, Delhi, New Delhi-110006 Tata DOCOMO Netaji Subhash MargAddress17, NETAJI SUBHASH MARG, DARYAGANJ, Delhi, NATIONAL COMMUNICATION 9136066147 Shop No 5, Shambhu Dayal Inter Collage Gate Building, Gt Road, Ghaziabad, Up-201001 Anil Kumar 9136200700 nationalcomm.ghaziabad@gmail.com SON RAJ MALIK COMMUNICATION 9136062925 Prashant Vihar, Opp. Ranap Ki Pulia, Loni Railway Station Road, Loni, Ghaziabad, Up-201100 Gayur Malik 9136441044 38639 sonrajmalik.brmts@yahoo.com ELECTRIC POINT 9136064747 834, Sarthi Appartments, Shalimar Garden, Ghaziabad, Up-201005 Ankit Jain 9136063075 electricpoint@gmail.com CHAJJU MAL CHIRANJI LAL 9136065771 Jarchar Road, Dadri, Gautam Budha Nagar, Noida, Up-203207 Ankit Goyal 9312153095 goel.2003@gmail.com AMBE ELECTRONICS 9136048469 J-34, Sec-18 Market, Near Pizza Hut And Oppsite Centre Stage Mall, Noida Anil Thakur 9136060072 11273 ambenoida.mts@gmail.com,

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