Market Research Report : Mobile Internet Market in India 2012

Mobile Internet Market in India

November 2012

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MOBILE INTERNET MARKET IN INDIA 2012.PPT

Executive Summary

Drivers:

Mobile Internet Market

Drivers & Challenges

Market Trends

Mobile Internet Player Profiles

Mobile internet subscriber base stood at x1 mn in India, as of month1 20‐‐

As of 20‐‐, x2% of the total internet usage originated from mobile devices

Although 4G services have already been introduced in the country, mobile broadband market will be driven by 3G services in the coming years

Reduction in Data Tariff

Abolition of Data Cap

Flexible Data Packs

Challenges:

Major Players

Bharti Airtel Ltd. Idea Cellular Ltd. Reliance Communications Ltd.

Bharat Sanchar Nigam Ltd. Tata Teleservices Ltd. Vodafone India Ltd.

Inferior or Inconsistent Services

Low Smartphone & Tablet Penetration in Rural Areas

Affordability of Next Generation Mobile Networks

Colossal Wireless Subscriber Base

Soaring Adoption of Mobile Devices and Reduction in their Prices

Increase in Disposable Income and Economic Advancement

Growing Demand for Content‐Rich Applications & Services

3MOBILE INTERNET MARKET IN INDIA 2012.PPT

• Introduction

•Mobile Internet Market Overview

•Drivers & Challenges

•Market Trends

•Mobile Internet Players

•Market Opportunities

• Strategic Recommendations

•Consumer Insights

•Appendix

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Introduction

•Mobile internet provides access to an abundance of circumstantially appropriate information available on the World Wide Web through a number of mobile devices functioning across multiple wireless networks The concept incorporates data‐optimized telecom networks and takes advantage of pre‐establish web resources as an execution platform Presentation schema of the readily‐available web content adapts to multi‐device communications enabled by wireless data gateways

• Variety of purposes such as smartphones, featurephones, tablets or USB modems can take advantage of mobile data services for web surfing, emails, media streaming, file download and upload, and mobile applications, among others

•Numerous Web‐based technologies have emerged in recent times for delivery of mobile internet services efficiently They include modern web‐based software and web 2.0 community‐generated applications

•With the growing usage of mobile devices prompted by the busy modern‐day lifestyles of consumers, there is an increasing need for on‐the‐go internet‐based services

Mobile Internet – Overview

Internet Access Technologies

Technology Description

Internet via Phone Line Internet access via 56 Kbps modems connected to fixed phone connections using public switched telephone network (PSTN)

Internet via LAN (Local Area Network) Internet access via Ethernet cables using LAN by individual ISPs in the area

Internet Over Cable TV Line Cable TV service providers providing Internet access via the same line

Wireless Internet access via wireless frequency channels by various ISPs

Mobile Internet Internet access via cellular networks using 2G, 3G and 4G technology

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Mobile broadband adoption in the region1 has been the highest despite only z1% penetration

Market Overview – Global (2/3)

X2X1

0

100

200

300

400

500

mn subscription20‐‐20‐‐

• The region1 has been leading in terms of active mobile broadband subscription over the past y3 years

• Penetration per 100 people in region2 and region3 were y4% and y5% respectively, while the same was y6% in the region4

• Active mobile broadband subscriptions in developed countries as a percentage of total global consumption is steadily rising

• Penetration per 100 people was y1% for developed countries and y2% for developing nations in 20‐‐

20‐‐ 20‐‐

Mobile Broadband Subscriptions by Region


Quarterly addition of wireless data subscribers has been falling in recent times due to factor1 within the sector

Market Overview – India (‐/‐)

• TextText TextText TextText TextText TextText TextText TextText TextText TextText TextText TextText TextText

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TextText TextText TextText TextText TextText

Quarterly Mobile Internet Subscriber Base – Market Size and Growth

‐100

0

100

200

300

400

500

mn

+10.1%

Total Wireless Data SubscribersQuarterly Addition

SAMPLE


Drivers & Challenges – Summary

Drivers

Colossal Wireless Subscriber Base

Soaring Adoption of Mobile Devices and Reduction in their Prices

Increase in Disposable Income and Economic Advancement

Growing Demand for Content‐Rich Applications & Services

Changing Demographics and Consumer Behaviour

Challenges

Inferior or Inconsistent Services

Low Smartphone & Tablet Penetration in Rural Areas

Affordability of Next Generation Mobile Networks


Market Trends (‐/‐)

• TextText TextText TextText TextText TextText TextText TextText TextText TextTextTextText TextText TextText TextText TextText TextText TextText TextText TextTextTextText TextText TextText

x1

• TextText TextText TextText TextText TextText TextText TextText TextText TextText TextText

TextText TextText TextText

• TextText TextText TextText TextText TextText TextText TextText TextText TextText TextText

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• TextText TextText TextText TextText TextText TextText TextText TextText TextTextTextText TextText TextText TextText TextText TextText TextText TextText TextTextTextText TextText TextText

x2

Trend1

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Public: Foreign Company – Company 1 (‐/‐)

Key People

Products and Services

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Ticker Symbol

Stock Exchange

Category Products/Services

Set‐Top Box Products • S1Name Designation

Person 1 D1

Person 2 D2

Person 3 D3

India Head Office


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Financial Snapshot Key Ratios

Financial Summary

• The company incurred a net profit of INR ‐ bn in FY 20‐‐, as compared to net profit of INR ‐ bn in FY 20‐‐

• The company reported total income of INR ‐ bn in FY 20‐‐, as compared to INR ‐ bn in FY 20‐‐

• The company earned an operating margin of ‐ per cent in FY 20‐‐, an increase of ‐ percentage points over FY 20‐‐

• The company reported debt to equity ratio of ‐ in FY 20‐‐, a decrease of ‐ per cent over FY 20‐‐

Key Financial Performance Indicators

Indicators Value (28/06/2012)Market Capitalization (INR bn) A

Total Enterprise Value (INR mn) B EPS (INR) C PE Ratio (Absolute) D

Improved Decline

Net Profit/LossTotal Income

s

20‐‐ 20‐‐0

ProfitINR bn

RevenueINR mn

0

q

20‐‐20‐‐

pr

Particulars y‐o‐y change (2012‐11)

2011 2010 2009 2008

Profitability RatiosOperating Margin ‐1.10 14.68% 15.78% 16.93% 19.72%

Net Margin ‐0.91 13.23% 14.14% 15.55% 18.61%

Profit Before Tax Margin ‐0.83 15.25% 16.08% 17.46% 20.62%

Return on Equity 7.60 60.51% 52.91% 34.43% 47.18%

Return on Capital Employed 8.09 67.13% 59.05% 37.48% 49.96%

Return on Working Capital 75.43 150.07% 74.64% 44.18% 58.13%

Return on Assets 3.58 24.34% 20.77% 18.93% 24.74%

Return on Fixed Assets 28.31 319.77% 291.46% 227.97% 346.05%

Cost RatiosOperating costs (% of Sales) 1.06 85.23% 84.17% 82.96% 80.08%

Administration costs (% of Sales)

0.49 10.10% 9.61% 9.11% 7.41%

Interest costs (% of Sales) 0.01 0.01% 0.00% 0.00% 0.01%

Liquidity RatiosCurrent Ratio ‐12.79% 1.27 1.46 1.95 1.90

Cash Ratio ‐8.37% 0.60 0.65 1.21 1.18

Leverage RatiosDebt to Equity Ratio ‐4.03% 1.49 1.55 0.82 0.91

Debt to Capital Ratio NA NA NA NA NA

Interest Coverage Ratio ‐82.25% 2219.40 12502.34 11161.05 2901.67

Efficiency RatiosFixed Asset Turnover 16.94% 24.03 20.55 14.57 18.41

Asset Turnover 24.95% 1.83 1.46 1.21 1.32

Current Asset Turnover 45.65% 2.41 1.65 1.38 1.46

Working Capital Turnover 114.30% 11.28 5.26 2.82 3.09

Capital Employed Turnover 21.89% 4.55 3.73 2.20 2.51


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Key Business Segments Key Geographic Segments

Key Information

Description Details

Overview

• C2 designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players

• It also sells software, services, peripherals, networking solutions, and third‐party digital content and applications worldwide

• C3 operates in India via its subsidiary, C4

20‐‐20‐‐20‐‐20‐‐ 20‐‐20‐‐ 20‐‐

k4 k5k3k2k1 k8k7k6


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Private: Domestic Company – Company 2 (‐/‐)

Key People

Products and Services

Company Information Offices and Centres – India

India Head Office

Tel No.

Fax No.

Website

Year of Incorporation

Name Designation

Person 1 D1

Person 2 D2

Person 3 D3

India Office

Category Products/Services

Set‐Top Box Products •S1


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Financial Snapshot Key Ratios

Financial Summary

• Company incurred a net profit of INR ‐ bn in FY 20‐‐, as compared to net profit of INR ‐ bn in FY 20‐‐

• It reported total Income of INR ‐ bn in FY 20‐‐, as compared to INR ‐ bn in FY 20‐‐

• The company earned an operating margin of ‐ per cent in FY 20‐‐, a decrease of ‐ percentage points over FY 20‐‐

• The company reported debt to equity ratio of ‐ in FY 20‐‐, an increase of ‐ per cent over FY 20‐‐

Improved Decline

Profit / Loss

Total Income ProfitINR mn

0

Total IncomeINR mn

0

V

20‐‐20‐‐

T

20‐‐

W

U

20‐‐


Particulars y‐o‐y change (2012‐11)

2011 2010 2009 2008

Profitability RatiosOperating Margin ‐1.10 14.68% 15.78% 16.93% 19.72%

Net Margin ‐0.91 13.23% 14.14% 15.55% 18.61%

Profit Before Tax Margin ‐0.83 15.25% 16.08% 17.46% 20.62%

Return on Equity 7.60 60.51% 52.91% 34.43% 47.18%

Return on Capital Employed 8.09 67.13% 59.05% 37.48% 49.96%

Return on Working Capital 75.43 150.07% 74.64% 44.18% 58.13%

Return on Assets 3.58 24.34% 20.77% 18.93% 24.74%

Return on Fixed Assets 28.31 319.77% 291.46% 227.97% 346.05%

Cost RatiosOperating costs (% of Sales) 1.06 85.23% 84.17% 82.96% 80.08%

Administration costs (% of Sales)

0.49 10.10% 9.61% 9.11% 7.41%

Interest costs (% of Sales) 0.01 0.01% 0.00% 0.00% 0.01%

Liquidity RatiosCurrent Ratio ‐12.79% 1.27 1.46 1.95 1.90

Cash Ratio ‐8.37% 0.60 0.65 1.21 1.18

Leverage RatiosDebt to Equity Ratio ‐4.03% 1.49 1.55 0.82 0.91

Debt to Capital Ratio NA NA NA NA NA

Interest Coverage Ratio ‐82.25% 2219.40 12502.34 11161.05 2901.67

Efficiency RatiosFixed Asset Turnover 16.94% 24.03 20.55 14.57 18.41

Asset Turnover 24.95% 1.83 1.46 1.21 1.32

Current Asset Turnover 45.65% 2.41 1.65 1.38 1.46

Working Capital Turnover 114.30% 11.28 5.26 2.82 3.09

Capital Employed Turnover 21.89% 4.55 3.73 2.20 2.51


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Key Recent Developments

Description Details

Overview

•O1 is a leading player in technologies including real‐time bidding, data marketplaces, big data, algorithms and targetting in o2

• Its engine is manned by over ‐ people across o3, o4, o5, o6, o7

Extended Product Portfolio

• The company works closely with top publishers across the global platform including o8 and o9

• It constitutes an exclusive reseller of o10’s premium inventory in India, Thailand, Indonesia and Phillipines

• It also has partnership with technology vendors namely o11, o12, o13, o14• Its list of investors include names such as Nexua Venture Partners, Helion Venture Partners, Norwest Venture Partners and Draper Fisher Juvertson,



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SWOT Analysis of STB Market

SWOTAnalysis

Strengths

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Opportunities


Weaknesses


Threats




Strategic Recommendations (‐/‐)

•Companies need to focus on specific1 and specific2 early to leverage on specific3

•TextText TextText TextText TextText TextText



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Recommendation1 Recommendation2

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Consumer Insights – Mobile Internet Usage Survey (‐/‐)

Data Service Selection Criteria

Mobile Internet Usage and Preferences – Introduction & Methodology

Sample Size x1

Sample SourcesSocial Media Websites and

Technology Forums

Survey Duration Oct 2012 to Nov 2012

Quantitative Representation Used

Percentage

Response Options:

1) R1

2) R2

3) R3

4) R4

Q: What are the criteria considered when selecting a mobile data service?

• Survey on mobile internet usage & preferences was conducted across multiple social media websites

• The survey has been kept mostly close ended with specific open‐ended responses to capture common areas of user interest

• The survey has been conducted among a small group of people comprising home users, gamers, information technology professionals & other segments of the workforce

0

20

40

60

80

R3R2R1 R4


Appendix

Ratio Calculations

Operating Margin (Operating Income/Revenues)*100

Net Margin (Net Profit / Revenues) *100

Profit Before Tax Margin (Income Before Tax / Revenues *100

Return on Equity (ROE) (Net Income / Shareholders Equity)*100

Return on Capital (ROCE) EBIT / (Total Assets – Current Liabilities)*100

Return on Working Capital (Net Income / Working Capital) *100

Return on Assets (Net Income / Total Assets)*100

Return on Fixed Assets (Net Income / Fixed Assets) *100

Operating Costs (% of Sales) (Operating Expenses / Sales) *100

Administration Costs (% of Sales)

(Administrative Expenses / Sales) *100

Interest Costs (% of Sales) (Interest Expenses / Sales) *100

Ratio Calculations

Current RatioCurrent Assets / Current Liabilities

Cash Ratio{(Cash & Bank Balance + Marketable Securities) / Current Liabilities)}

Debt to Equity Total Liabilities / Shareholders Equity

Debt to Capital Ratio{Total Debt / (Shareholders Equity + Total Debt)}

Interest Coverage Ratio EBIT / Interest Expense

Fixed Asset Turnover Sales / Fixed Assets

Asset Turnover Sales / Total Assets

Current Asset Turnover Sales / Current Assets

Working Capital Turnover Sales / Working Capital

Capital Employed Turnover Sales / Shareholders Equity


Sources of Information

Secondary Research

Print MediumLeading Newspapers

Telecom and Technology Journals / Magazines

Business Magazines

Electronic MediumCompany Websites

Government Websites / Resources

Online Telecom Magazines

Online Technology and Gadget Journals / Articles

Premium Databases

Primary Research

InterviewsLeading Industry Vendors

Industry Stakeholders

Industry Experts

General Consumers

Online Social Media


Thank you for the attentionThe Mobile Internet Market – India 2012 report is a part of Netscribes’ Telecom Series.For more detailed information or customized research requirements please contact:

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