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Commercial in confidence
Demand and Cooperation in Telecommunication
Commercial in confidence Commercial in confidence Page 2
Evolution of Mobile Market
Mobile 1.0
Operator Portals Voice ,WAP, SMS
Interactions and
Downloads
Subscription Driven
Mature Market, Stable seeing decline in its “aged” products (e.g. ringtones)
Mobile 2.0
Mobile Internet Social Media Internet of Things
Mobile Connectivity
Subscription + Service + Ad founded +
Premium driven
Emerging Market, large untapped potential but with unclear monetization models OTT players
Interface Key Value Proposition
Business Model Key Trends
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Data Usage is Rising
ARPU is dropping globally
Non-voice data is on the
rise
713 720 718 710 698 684
253 294
336 377
416 453
2010 2011 2012 2013 2014 2015 0
100
200
300
400
500
600
700
800
Global Data and Voice Revenues (US$)
Voice Revenues
Data Revenues
Global IP Traffic
Source: Cisco
Source: Ericsson
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Growth of Value Added Services
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Time Spent online is Changing
•Data is becoming the main growth driver in telecoms
27
17 16 14 12 11 10 9 9
3
05
1015202530
Min
utes
per
Day
(m)
UK Smartphone User's Minutes per Day - Activity Spend
Smartphone User's Total Minutes per DaySpent
Source: AT Kearney
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Youth is becoming an important factor
$$$
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What make Iran an attractive market now ?
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Iran Demographics
Second Largest country in
Middle East, having a population of 77 million and the 4th largest market in Africa and the Middle East. Most Attractive
demographic in the region with >50% of the population under the age of 30. Internet penetration is
lower than other countries in the region but is growing in Urban areas ( 61% of people to Tehran with average utilization of around 1.2GB monthly)
Key Indicators 2009 2010 2011 2012 2013 2014 2015 2016 Populations [000] 74,200 75,090 75,920 76,750 77,600 78,450 79,310 80,180 Households [000] 14,990 15,170 15,337 15,505 15,677 15,849 16,022 16,198
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
0
10
20
30
40
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60
70
80
90
100
1990 1995 2000 2005 2010 2012 2015 2020
Population Demographics 1990-2020 Total Population Dependent Ratio Active Population % Youth Population %
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Regulatory Environment
Iran’s latest 5-year plan puts emphasis on developing the telecommunications infrastructure and
ICT services in the country.
Creation of National Intranet , Phase 1 of the Europe-Persian Express Gateway Project, will lead to
more content being available and therefore increased usage.
3G/4G cellular Network providers deployed 3G and % 4G Network nationwide in Iran and Iran is
looking to be involve with 5G standard in coming years
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Economic Environment
80% of Iran’s income is generated by Oil revenues.
Iran’s low national debt as compared to its GDP forms a strong foundation for solid growth in the upcoming years
Until recently (, Iran’s government used a price-fixing policy to regulate inflation, has decided to eliminate subsidies
which has lead to high inflation and lower disposable income per person. Fluctuating exchange rates
Sanctions as well as foreign governments discouraging trade with Iran have made it hard to source technology infrastructure and for foreign companies to do business with Iran
But on the other side, this has lead to enthusiastic demand to be independent, leading to remarkable advances in many technological fields (aerospace, biotech, power plant, oil etc) (strong capabilities and skilled workforce).
sanction will be removed and combination of Iranian high skill workforce and IT opportunities make Iran attractive country for foreign investor and advanced technologies
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Social
Demand for internet subscriptions is strong.
Broadband penetration is low
Business demand for services especially mobile
data is growing
Willingness to pay for more lucrative data services
leading to increased levels of data usage.
Willingness to pay for latest devices
Most customers have multiple phones - Sim
penetration very high.
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Some Technological facts
Iran’s fixed line penetration is one of the highest in the Middle East.
Competition exists in the ISP market with more than 1200 Internet Access Providers. Recently regulatory changed this a few internet providers to monitor their performance and qualities
Recently improvement in telecom infrastructure project such as TCI’s national backbone will help improve data and voice service quality.
Operator s in Iran has experienced high demand for its 3G/4G and WIFI products so far but has run into some difficulties in maintaining its quality of service, mainly due to Backhaul limitation.
EU, US and UN sanction currently hinder Operators from accessing lower priced equipment to roll out services in a more cost-effective way. But this will change after sanction removed and attract more Vendors and cost effective solutions for Iranian market.
Removing Government restrictions on content will increase ARPU and more potential for investment
specially in Broadband and Fibre.
As spending power increase ARPU will continue to be increase and more investment in telecommunication sectors in the short- to medium terms.
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Macroeconomic Environment
• Iran’s latest 5-year plan puts emphasis on telecommunications infrastructure and ICT services. • 3G Tamin Telecom restriction removed and translate to increase of 3G coverage and 4G coverage nationwide in Iran by exiting operators and also room for new operator to enter to Iranian market
Regulatory •Iran’s foundation for solid growth in future years
Economic
•Demand for internet subscriptions is strong. •Broadband penetration is low •Willingness to pay for more lucrative data services (increasing levels of data usage) •Willingness to pay for latest devices •Most customers have multiple phones - SIM penetration very high.
Social •Iran’s fixed line penetration one of the highest in the Middle East •Recently developed TCI’s national backbone •Lack of developed 4G and small Cell networks •ARPU declines, only traditional voice and SMS services •Content restrictions slowly fad away
Technologic
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ICT Network Readiness Comparison
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Iran Telecom Market, space for more infrastructure and technology?
Company Name Ownership Market
Telecommunications Company of Iran (TCI)
Etemad Mobin (50% plus one share), Government (50%)
Fixed-line (local, domestic long distance, international), mobile, data operations
Taliya Rafsanjani Industrial Complex (RIC) Mobile (GSM900)
MTN Irancell MTN (49%), Iran Electronic Development Company (51%) Mobile (GSM900/1800)
Mobile Telecommunications Company of Esfahan (MTCE)
Telecommunication Company of Esfahan Province (51%), Axiata (49%)
Mobile (GSM900)
Telecommunication Kish Co. (TKC) LibanCell (100%) Mobile (GSM900), Internet (dial-up, WLAN)
Pars Online Private (100%) Internet (dial-up, ADSL, WiMAX)
Datak Telecom Private (100%) Internet (dial-up, ADSL, Wi-Fi, direct fibre), Residential VoIP
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-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
Sep 12 Dec 12 Mar 13 Jun 13 Sep13F
Dec13F
Mar14F
Jun 14F Sep14F
Dec14F
Mar15F
Jun 15F
Monthly ARPU by Operator
MTCE (Mobile TelecommunicationsCompany of Esfahan)
MTN Irancell (MTN Group)
Taliya (Rafsanjan Industrial ComplexIslamic Cooperative Company)
TCI (Telecommunication Company ofIran)
Tamin Telecom
Source: Markets and Research – Iran Telecom Market 2013
Monthly ARPU by Operator
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Our microenvironment analysis also underpins Iran as a ready market for other services
•Low competitive environment , offering a window of opportunity in the market. •Demand for high speed data already present, with a large percentage of Smartphone's despite no services for them.
• favourable demographic as economic factors would contribute to the success of broadband service in Iran prime locations or hotspots
•But there are uncertainties in the regulatory matters that needs to be considered.
•Demographic (high % of young population) and economic growth will drive high demand for broadband connectivity and penetration of data service.
Regulatory
Positive Drive factors for Broadband uptake
Demographics
Research data leads to Iran market as a...
Economic Growth
Market Demand
Disposable income
Telco Regulation
Equipment supply
Customer Behaviour
Broadband Technology
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Opportunities and Constraints
Highly favourable demographics
High Proliferation of Wi-Fi enabled devices
Small number of competitive service offerings
Demand for services and connectivity
High subscriber growth
Government Controls and regulation over mobile
Wi-Fi spectrum, licenses and internet services are
uncertain and could limit growth of a lucrative
sector.
Economic factors was hinder investment but now
door open for investment
ARPU generated by mobile is lower than regional
market ARPU.
Availability of online content is low as compared
to other countries in the region but changes on
the way
Market for mobile data and services is growing
rapidly. Provide a great platform for future mobile
value added services.
Increase in mobile e-commerce sites and
applications like video-sharing etc.