Mr. Brijesh Chandwani Let me start by talking about a few facts on information and communication technology (ICT).

Transcription

1 Mr. Bo Rasmusson, Session Chairman Our third speaker is Mr. Brijesh Chandwani. He is the founder, Managing Director and Chief Visionary of Beam Telecom Pvt Ltd, a leading Internet Solutions Provider in Hyderabad. In 2002, Brijesh disrupted the dial-up ISP market, by pioneering delivery of broadband solutions via fiber optic technology with a clear intention of creating a future-ready enterprise. In May 2009, ACT Television, backed by India Value Fund, made a strategic investment in Beam Telecom to fuel further growth. He began his journey as an entrepreneur at a very young age, by starting a Cable TV business in the year 1992 at the age of 19. In 1995, Brijesh pioneered the delivery MSO services in Hyderabad, which was subsequently acquired by Siti Cable. Please take the floor. Mr. Brijesh Chandwani Let me start by talking about a few facts on information and communication technology (ICT). FTTH in Indian Cities Brijesh Chandwani page 111

2 Before I proceed, I would like to introduce to you Beam Telecom. FTTH in Indian Cities Brijesh Chandwani page 112

3 We have 160,000 subscribers in Hyderabad. We are growing at 5% to 6% per month. We are a group company of Atria Convergence Technologies (ACT), and we are funded by a private equity company called India Value Fund Advisors (IVFA). FTTH in Indian Cities Brijesh Chandwani page 113

4 Here you can see some interesting facts about us. We are India s first Fiber-to-the-Building (FTTB) service provider. We are India s first service provider to deploy a commercially successful triple play launch on Fiberto-the-Home (FTTH). We are India s first service provider to launch a 10 Mbps fully duplex broadband service for homes. At 30 Mbps we are India s fastest broadband service provider. We are the first in the country to launch a filtered internet package for children, which is a simple portalbased login system. We are also the first in India to launch a plug-andplay Wifi package for homes and offices. There are many more firsts to come from us. On the next 4 slides I would like to share with you some data on global broadband, as given by the Internet 2011 Report from Akamai. 1) The average peak connectivity globally 2) The average peak connectivity > 5 Mbps 3) The average peak connectivity > 2 Mbps 4) The average peak connectivity < 256 kbps. FTTH in Indian Cities Brijesh Chandwani page 114

5 The Need Top Nations with Avg Peak Connectivity > 5 Mbps (India does not figure in the list) Source The State of the Internet 2011 Report - Akamai 6 FTTH in Indian Cities Brijesh Chandwani page 115

6 The Need Top Nations with Avg Peak Connectivity < 256 kbps (India figures in the list). Source The State of the Internet 2011 Report - Akamai 7 FTTH in Indian Cities Brijesh Chandwani page 116

7 We can see in this graph that the broadband connectivity in Asia is only at 19.4% penetration, whereas the more developed world is at 74.2% in North America, in Oceania / Australia at 60.4% and in Europe at 52%. It is expected that the growth in India and China will outgrow the total number of broadband connections very soon. FTTH in Indian Cities Brijesh Chandwani page 117

8 Let us have a look at the current and future landscape of broadband. Social networking is today an integral part of most homes. Pictures, music, video and home entertainment play a major part in these networks. HD quality video requires very high bandwidth between 8 Mbps and 20 Mbps. Gaming is now very common across the world. 3D TV is starting very soon. Connected homes are becoming more common. People would like to keep an eye on their home or on their children, while they are not at home. Multi-party video-conferencing is common. HD- Video conferencing is growing. Healthcare monitoring and E-education is the future. Remote workplace is a reality today. FTTH in Indian Cities Brijesh Chandwani page 118

9 Let us see what the IP-traffic in the next few years may look like. It is expected that the IP traffic will grow at 32% CAGR between 2010 to 2015 across the globe. Whether it is wired, wireless or mobile connectivity, across the board all the IP traffic will grow substantially. Why is it growing? The current broadband speed across the globe is 7 Mbps, which will grow fourfold to 28 Mbps by Video related applications are bandwidth hungry. There is not a quarter passing by without new netbooks, mobile phones or computers. It is expected that the number of devices of one per capita will go to 2 per capita in By 2014 we will have 8 billion sqfeet of screen space available. With muli-core CPUs one PC is equal to 4 Pcs and those multi-cores are growing. Over-the-top television becomes more popular and unicast requires more bandwidth. FTTH in Indian Cities Brijesh Chandwani page 119

10 This morning Mr. Upadhyay informed us about the National Broadband Plan (NBP). In the last slide I talked about the need for broadband, now I talk about the opportunity in the country. The NBP indicates that currently we have 14 million subscribers and in 2014 India will be at 100 million subscribers. This future is most certainly Fiber-to-the-Home ( FTTH) and wireless in the air. One will not replace the other. They will mutually and exclusively galvanize the connected world of the future. FTTH in Indian Cities Brijesh Chandwani page 120

11 Take a look at the Telecom Regulatory Authority of India (TRAI) report of December You can see that the bulk of the broadband activity in the country is delivered via DSL. 51% of the broadband subscribers were using DSL and a major chunk of them was delivered by BSNL. Wireless delivered about 11%, Ethernet about 3%, cable modems about 4%. Fiber, which is the future, is less than 1%. It is all bound to change in the very near future. FTTH in Indian Cities Brijesh Chandwani page 121

12 Here I am repeating a few things, Mr. Upadhyay has already mentioned this morning the National Broadband Plan. The policy on fiber optics is as follows: Broadband connections at the end of 2010 were 11 million vs. a target of 20 million. There is an urgent need to facilitate rapid growth of broadband. A National Broadband Network will be established. This network will be an open access optical fibre network. The network will connect all habitation with population of 500 and above. The objective of the National Broadband Network will be to provide fiberto-the-home in 63 cities covered under the Jawaharlal Nehru National Urban Renewal Mission (JNURM) and fiber-to-the-curb in all other cities. These are wonderful numbers and plans, but unfortunately we don t stand as of today where we projected to be. There are a lot of challenges in the country, in every business, and this business is not different. FTTH in Indian Cities Brijesh Chandwani page 122

13 Obviously FTTH is the most preferred wired technology in the country and across the globe. Using this technology, who can enable the growth in India? It is the government with its National Broadband Plan initiative; the Telco s with the large underground fiber network, that already exists; ISP s like ours, who have localized presence; local cable operators, who have good connections to the homes and MSO s. These are the people who can enable this growth. But there are challenges. I divided them into three buckets. The first bucket is the infrastructure and rollout itself. Most of the underground fibers are owned by the Telco s, who are hesitant to partner with or share the latent infrastructure. Most of the Telco's are focused on wireless rollouts. There is a lot of money spent on the spectrum. It is also faster and easier to install wireless networks as compared to fiber networks. Cable TV operators are relatively small and are not focused on broadband and can act as deterrent for fiber rollouts by ISP s. Right of way is a big challenge. FTTH in Indian Cities Brijesh Chandwani page 123

14 The second bucket deals with the cost and return-on-investment centric. If you have to deliver 100 Mbps connectivity to homes and buy gigabits of capacity from Telco s the business will not be viable. The cost of internet bandwidth has come down drastically over the last few years, but is still considered higher than in other countries. Wifi inside the premise is a necessity today. Most devices are Wifi-enabled and the cost of Wifi further increases the cost of capex. On the revenue side broadband revenues are declining. With video services, operators can expect to make some additional money, by providing value-added services. Currently, there are very few organized content aggregators in the country. Content security and revenue share models have not operationally evolved as yet. Direct-to-home (DTH) and cable TV have cluttered the video market. We have 550 channels in the country today. Over-the-top (OTT) is still evolving in India. There are a lot of dependencies on video conferencing today. Standard platforms are not available. Software and hardware are a challenge. On gaming there are no real revenue sharing systems, that have evolved with any of the gaming companies. FTTH in Indian Cities Brijesh Chandwani page 124

15 Having spoken about the challenges, just like any other entrepreneur I would like to suggest my own solutions to all the challenges on the next six slides. FTTH in Indian Cities Brijesh Chandwani page 125

16 Challenges vs Solution Solution Challenge Right of Way is a bottleneck for fiber penetration Challenge Cable Operators can act like a deterrent for fiber penetration in many areas Solution Active support by authorities to encourage organized and structured small ISP s to expand infrastructure UG Fiber to be provided by the Telco Right of way for digging to be made cheaper, by allowing one time digging through formation of consortiums 17 FTTH in Indian Cities Brijesh Chandwani page 126

17 Challenges vs Solution Challenge Wifi inside the premise increases the cost further Challenge Broadband ARPU is declining Solution Manufacturers to consider Wifi as mandatory component of the CPE, increasing the volume and helping bring down the cost Solution Like any other telecom service, ARPU's of Broadband are likely to be lowest in the world, especially in India, after the aggressive rollout of Wireless services Operators have to compensate the lower arpu's by focusing on the cluster approach to provide more connections in the same area The good quality of the network deployed can ensure lower opex, ensuring better ROI. 18 FTTH in Indian Cities Brijesh Chandwani page 127

18 Challenges vs Solution Solution Challenge Mutually value creating partnerships in with Gaming companies is yet to evolve Operators have to actively pursue with the large gaming console manufacturers to actively forge revenue share partnerships based on future volumes Challenge Currently there are visible dependencies for video conferencing on the platform, the software and hardware side respectively Solution Cost effective platform, currently dependent on success of Android, Linux, Windows versions of media boxes for HD quality family or office video conferencing 19 FTTH in Indian Cities Brijesh Chandwani page 128

19 This is our national dream: By 2012 we will have 75 million broadband subscribers, by 2014 it will be 160 million, wired and wireless included. All metro cities will have a minimum of 10 Mbps per household of broadband connectivity and 100 Mbps on demand. Tier 2 and 3 cities will have 4 Mbps of minimum connectivity, towns and villages will have 2 Mbps per household. Gentlemen, if this is the future, we are definitely geared up for it. Thank you! FTTH in Indian Cities Brijesh Chandwani page 129