TDD-LTE Rollout Strategies for Telecom Service Provider in India

Swapnil Pande

Supervisor : Prof. Heikki Hämmäinen

Instructor : Prof. Kishor Ghormade

Communications Ecosystem International Master’s Program

Aalto University, School of Electrical Engineering

Master’s Thesis Presentation

June 30 2014

Agenda

• Research Problem and Motivation

• Background

• Research Method

• Findings

• Conclusion

2

3

• Main Research Problem

• What are the successful strategies for the TDD-LTE rollout in Indian telecom market?

• Research Questions

• What are general strategies to concentrate for successful rollout TDD-LTE services?

• How to achieve competitive pricing strategies suitable for TDD-LTE rollout?

• What level of maturity should Device Ecosystem should reach to leverage the development of TDD-LTE services?

Main Research Problem and Research Questions

Motivation for Research Problem

4

1. The business issue • Latent market stage• Poor 3G penetration• Already Investment in 3G

2. Importance and impact• Prevent Loss for Telecomm Service

Providers

3. Objective of the study• Examining the local market barriers • Suggesting remedies.

4. The output of the study• Set of guidelines for

successful rollout strategies

5. This helps because• Learning prevents mistake

repetition

Background and Research Method

5

I. Auction Process and LTE developmentsII. Research Method

6

BWA Auction Process completed

June 11, 2010

June 12, 2010Reliance Industries

acquires 95% stake in Infotel Broadband

Services and Relianace Jio

established

Bharti Airtel launches TD-LTE in Kolkata

circle

April 2012

May 2012Bharti Airtel acuires

49% stake in Qualcomm Incorporate

Bharti Airtel and Reliance Jio signs i2i

cable sharing deal.

April 2013

I. Timeline for major Events related to TDD-LTE (1/3)

7

I. Successful players in Auction process (2/3)

  METROS CAT : A CAT : B CAT : C

 

DLI

MUM

KOL

MH

GUJ

AP

KAR

TN

KER

PUN

HAR

UPE

UPW

RAJ

MP

WB

HI

M

BIH

OR A

NE

J&K

Infotel Broadband Pvt. Ltd                                            

Bharti Airtel                                            

Aircel Limited                                            

Tikona Digital                                            

Qualcomm Incorporated                                            

Augere (Mauritius) Ltd.                                            

Circle Category

Rise from Reserve Price

to Final Auction Price (in %)

Metro 772 to 1333.09

Category A 472.27 to 1193.40

Category B 70.97 to 332.27

Category C 37.73  to 561.86

Total 634.15

  METROS CAT : A CAT : B CAT : C

 

DLI

MUM

KOL

MH

GUJ

AP

KAR

TN

KER

PUN

HAR

UPE

UPW

RAJ

MP

WB

HI

M

BIH

OR A

NE

J&K

Reliance Jio                                           

Bharti Airtel                                            

Aircel Limited                                           

Tikona Digital                                            

Augere (Mauritius) Ltd.

                                           

8

I. Timeline for major Events related to TDD-LTE (3/3)

1. Reliance Communication and Reliance Jio signs Network Infrastructure sharing deal

2. Bharti Airtel acquires 100% stake in Qualcomm Incorporated

June – July, 2013

March 4, 2014Bharti Airtel and

Reliance Jio signs Tower sharing deal

Relianace Jio signs tower sharing pact

with Viom Networks and ATC India

March – April 2014

May 29, 2014Reliance Industries takes over Network

18.

Bharti Airtel offers dongle and mobile device plans in 8

cities

Present Status

9

Research Problem

Research Questions

Paper Survey

Literature Review

Company

Documents

Conferences,

Seminars and Webinars

General Strategy

Pricing Strategy

Device Ecosystem DevelopmentStrategy

•Challenges and •Set of Recommendations

Data Analysis and Interpretation

Government

Organization and Regulatory Body reports

Close end questionsOpen end questions

II. Research Method

News paper

articles , Magazine articles and blogs November to December

January to March34 Respondents

15 Respondents

Findings and Conclusion

10

I. General StrategyII. Pricing StrategyIII. Device Ecosystem Development Strategy

11

I. General Strategy : Challenges faced by SP (1/2)

12

I. General Strategy : Time of launch and Customer segment to Target (2/2)

0

5

10

15

20

03

12

19

8. Launch Strategy

Early launch in Phased manner

Early launch on Pan India Basis

Late launch in Phased manner

Late launch on Pan India basis

05

10152025 20

1216

9 73 5

9. Customer segment to target

High End ARPU Customers (Postpaid) High End Customers (Prepaid)

Middle ARPU Customers (Postpaid) Middle ARPU Customers (Prepaid)

Low End ARPU Customers (Postpaid) Low End ARPU Customers (Prepaid)

All the customers segments

0.00

1.00

2.00

3.00

4.00

5.00

2.03 2.03

1.12

4.063.38

7. Solution for Providing Voice Services

IMS-based VoIP (VoLTE) Unmaged OTT VoIP (Skype)

Managed OTT VoIP Circuit Switch Fallback (CS Fallback)

VoLGA (Voice over LTE via Generic Acces)

1 GB 2GB 3GB 4GB 6GB 9GB 10GB 12GB 15GB 18GB 25GB 30GB 45GB 80GB

Apr-12 NaN NaN NaN NaN 999 1399 NaN NaN NaN 1999 NaN 2999 NaN NaN

Jun-12 NaN NaN NaN NaN 999 1399 NaN NaN NaN 1999 NaN 2999 NaN NaN

Sep-12 NaN NaN NaN NaN 999 1399 NaN NaN NaN 1999 NaN 2999 NaN NaN

Dec-12 NaN NaN NaN NaN 999 1399 NaN NaN NaN 1999 NaN 2999 NaN NaN

Mar-13 NaN NaN NaN NaN 999 1399 NaN NaN NaN 1999 NaN 2999 NaN NaN

Jun-13 250 450 650 750 NaN NaN 999 1299 1499 NaN 2049 NaN 2999 4799

Sep-13 250 450 650 750 NaN NaN 999 1299 1499 NaN 2049 NaN 2999 4799

Dec-13 250 450 650 750 NaN NaN 999 1299 1499 NaN 2049 NaN 2999 4799

Mar-14 250 450 650 750 NaN NaN 999 1299 1499 NaN 2049 NaN 2999 4799

Jun-14 250 450 650 750 NaN NaN 999 1299 1499 NaN 2049 NaN 2999 4799

500

1500

2500

3500

4500

5500

Data Plan

Cos

t in

IN

R/M

onth

II. Pricing Strategy : Bharti Airtel Data Plan Pricing (1/4)

14

II. Pricing Strategy : Airtel Data Plan Pricing Analysis (2/4)

Time periodDownload

LimitPrice (INR) Rs/MB

April 2012 to March 2013

6GB 999 0.163

9GB 1399 0.152

18GB 1999 0.108

30GB 2999 0.098

April 2013 Onwards

1 GB 250 0.244

2GB 450 0.220

3GB 650 0.212

4GB 750 0.183

10GB 999 0.098

12GB 1299 0.106

15GB 1499 0.098

25GB 2049 0.080

45GB 2999 0.065

80GB 4799 0.059

Apr/1

2

Aug/1

2

Dec/1

2

Apr/1

3

Aug/1

3

Dec/1

3

Apr/1

40

1000

2000

3000

4000

5000

6000

7000

8000

9000

Dongle Pricing

Wi-Fi Router Pricing

VAS Provided

• HD Movies• HD Games• TV Shows• Live videos of places of worship

15

II. Pricing Strategy : Data Plans to implement (3/4)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

1.441.82

2.88

3.563.79 3.62

1.65

3.854.18

3.97

3. Plan Strategy

Data speed used to differentiate tariff tiers Unlimited Voice and messaging by default

Multi device shared data strategy plans Tethering strategy

Day/night pricing strategy Location based pricing

Unlimited data plans with LTE Bundling of high end smart phones with LTE plans

Combining 3G and 4G data Free 2G Data

16

II. Pricing Strategy : Data Plans to implement (4/4)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

3.74

3.18

1.15

1.97

2.91

4.21

1. Data plans

Data Only Data + Voice

Data + Messaging Data + Voice + Messaging

Data + VAS Data + VAS + Voice

0

5

10

15

20

25

4

9

21

5. Expected Pricing of TDD- LTE with respect to 3G services

More than 3G Equal to 3G Less than 3G

0

5

10

15

20

25

8

20

5

1

2. Airtel pricing for TDD- LTE

Very High High

Normal Can charge more

17

III. Device Ecosystem Development Strategy : Access source (1/3)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

4.09

0.09

4.44

3.97

2.442.62

3. Main source for accesing LTE

Dongles Camera Routers/personal hotspot (Mi-Fi)

Smartphone Tablets Multimode CPE

18

III. Device Ecosystem Development Strategy : Effect on mobile ecosystem (2/3)

0

5

10

15

3

9

14

62

1. Effect on multi-sim device ecosys-tem

Increase substantially Increase

No effect Decrease

Decrease substantially

0

2

4

6

8

10

12

14

16

18

20

11

18

21

2

2. Effect on sales of large screen device ecosystem (Tablets included)

Increase substantially Increase

No effect Decrease

Decrease substantially

19

III. Device Ecosystem Development Strategy : Device Pricing (3/3)

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

1.12 1.26

3.09

4.06

2.18

1.18

6. Cost of TDD-LTE smartphones for LTE to takeoff (In INR)

Less than 3000 3000 - 5000 5001 to 8000

8001 to 12000 12000 - 16000 More than 16000

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

3.06

3.82

3.24

1.29

7. Cost of Dongle device for LTE to take off (In INR)

Less than 800 800 - 1200

1200 - 1600 More than 1600

20

Conclusion

1. Incremental and well-targeted 2G prepaid to LTE postpaid migration strategy

• Identification of the Challenges and Market segment to target

• First launch impression vital

2. The competitive advantage shifts from “Pricing only” towards “Pricing and Quality of Services”

• Premium pricing is not the solution

• Innovative Pricing like combining 3G and LTE data

3. Gradual shift from Multi-SIM towards Single SIM market providing SP with greater control over subscribers

• Close collaboration with Device manufactures

• Affordable device pricing

Thank you !

21