CMR MarketView 2011 e-Book

INDIA
THE BIG PICTURE
Domestic IT Services, ITeS and IT Product Markets
India Telecom Services and Mobile Handset Markets

CMR MarketView 2011

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Foreword

Dear Industry Colleague,

With the rich demographic dividend and great business opportunities around, India is catching everyone’s
attention. On the contrary, business sentiment currently is less than optimistic about the Indian economy. We
see challenges like inflation, increase in input cost, high profile scams, allegations of corruption, and lack of
adequate employment opportunities.

The facts, however, present a less than grim and rather more comforting picture. Growth will continue through
2012, and for the years in the scope of this MarketView (2010-2014), the India growth story will maintain its
positive momentum.

But is this optimism misplaced, or does it have a sound basis? Even the most trenchant critics of India’s
economic ills will agree that there exists another India beyond the inflation, scams and unemployment.
This ‘new’ India is powered by a throbbing, pulsating, industrious and growth hungry middle class that is
increasingly being joined by the teeming millions emerging from the ‘bottom of the pyramid’ in cities, towns
and villages across the length and breadth of the country.

According to recent industry estimates, the Indian middle class is expected to grow from 160 million in
early 2011 to nearly 270 million by early 2016. Over the same period, the absolute number of ‘poor’ in the
population is expected to reduce from over 680 million to less than 560 million. Largely powered by this middle
class boom, India’s GDP is expected to continue to grow at a healthy pace. According to World Bank estimates
published in June 2011, India’s GDP growth rate will moderate to 8.0% in 2011, but will recover to 8.4% in
2012 and may rise to 8.5% in 2013. These developments and sentiments will have a direct and positive ‘rub-
off’ on Indian business enterprises, in turn fueling the domestic IT and telecoms industry to grow, as you can
see in the numbers captured in this edition of CMR’s MarketView.

We would see growth increasingly led by IT services leveraging on new delivery models like cloud computing,
thereby creating more flexible and dynamic enterprises. There could be an argument around the lower
penetration of cloud on the ground, but I am sure we are at the beginning of a strategic opportunity to
participate in a new and disruptive cycle of IT procurement.

I hope you will find this document useful to gain an overall perspective of the India domestic IT-ITeS and
Telecoms industry. My team and I would love to hear from you.

With warm wishes,

Thomas George
Vice President and Head
CyberMedia Research
tgeorge@cmrindia.com

CMR MarketView 2011 l India: The Big Picture l July 2011 2
Copyright 2011 Cyber Media Research Ltd. Reproduction is forbidden unless authorized. All rights reserved.

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Contents
India: The Big Picture...........................................................................................................................4

CMR MarketView 2011 Part I: Domestic IT Services, ITeS and IT Product Markets ....................................5

India growth story to continue...........................................................................................................6

Growth of the Cloud Computing paradigm .........................................................................................6

Key product segments to register above average growth ....................................................................6

Enterprise-wide solutions spending to take off in 2011.......................................................................7

Enterprise IT infrastructure focused on optimization ...........................................................................8

High-growth, IT-enabled ‘intelligent’ industry verticals and government sector set to evolve ................10

CMR MarketView 2011 Part II: India Telecom Services and Mobile Handset Markets...............................12

Major growth drivers: Launch and roll-out of 3G and BWA / WiMax / LTE services ..............................13

Mobile handsets to witness a high growth rate.................................................................................13

Note: This document reflects the opinion of CyberMedia Research (CMR) analysts. The information, analyses
and forecasts contained in this document are based on current market hypotheses, estimates and assessments
and may be subjective in nature. CMR does not assume responsibility or liability of any manner whatsoever,
for claims of damages arising out of use of data contained herein and / or claims of loss resulting from use of
such data and viewpoints. CMR may modify the numbers and viewpoints contained herein at any time without
prior notice.

CMR

India: The Big Picture
Rs 4,60,528 Crore or USD 100 Billion: The combined value of domestic
IT services, ITeS, IT products, Telecom services and mobile phone
markets for 2012. CyberMedia Research (CMR) MarketView 2011
captures the India growth story that is still unfolding...

Table 1. Overall India IT Services, ITeS, IT Products, Telecom Services and Mobile Phones Industry:
Size and Growth Forecast, 2010-2014 (Rs. Crore and and USD Billion)
Categories 2010 2011 2012 2013 2014 CAGR 2010-2014
Total India IT, ITeS &
Telecoms Industry, 333,591 394,452 460,528 533,388 611,615 16.4%
Rs. Crore
Total India IT, ITeS &
Telecoms Industry, 73 86 100 116 133 16.4%
USD Billion
Source: CyberMedia Research (CMR), 2011

Figure 1. Overall India IT Services, ITeS, IT Products, Telecom Services and Mobile Phones Industry,
2010-2014 (Rs. Crore and and USD Billion)

Industry Revenues (USD B)
Industry Revenues
(Rs. Crore)


CMR MarketView 2011 Part I: Domestic IT Services, ITeS
and IT Product Markets
India domestic IT services, ITeS and IT products markets to touch
Rs.1,71,697 Crore or USD 37 Billion in 2012

CMR MarketView 2011 Part II: India Telecom Services and
Mobile Handset Markets
India Telecom services and mobile handset markets to touch
Rs.2,88,832 Crore or USD 63 Billion in 2012


CMR

CMR MarketView 2011 Part I:
Domestic IT Services, ITeS and IT Product Markets
The overall India domestic IT Services, ITeS and IT Product markets will touch Rs 1,71, 697
Crore in 2012. Growing at a CAGR of 17.3% over 2010-2014, the aggregate market size of the
domestic IT services, ITeS and IT products sector will touch Rs 2,33,930 Crore by 2014.

Table 2. India Domestic IT Services, ITeS and IT Product Markets:
Size and Growth Forecast, 2010-2014 (Rs. Crore and USD Billion)
Year 2010 2011 2012 2013 2014 CAGR 2010-2014
IT Services + IT-
enabled Services, 45,672 55,235 67,102 81,710 98,188 21.1%
Rs. Crore
IT Services + IT-
enabled Services, 10 12 15 18 21 21.1%
USD Billion
“IT Products
(Software + Hardware), 77,686 90,933 104,595 119,312 135,742 15.0%
Rs. Crore”
“A large chunk of “IT Products
(Software + Hardware), 17 20 23 26 30 15.0%
IT hardware and USD Billion “
software products, will Total Domestic IT+ITeS
123,358 146,168 171,697 201,022 233,930 17.3%
witness good traction Market, Rs. Crore
on account of the Total Domestic IT+ITeS
27 32 37 44 51 17.3%
healthy growth in IT Market, USD Billion

services, as enterprises Source: CyberMedia Research (CMR), 2011

try to gain the best
leverage out of their IT Figure 2. India Domestic IT Services, ITeS and IT Product Markets, 2010-2014 (Rs. Crore)
deployment.”
— Anirban Banerjee
Revenues (Rs. Crore)

Associate Vice President, Research
and Advisory Services, CMR


Notes:
1) Hardware includes PCs, Servers, Printers & MFDs, Storage, Networking Equipment, Consumables and
Accessories.
2) Networking Equipment includes Switches, Routers, IPT and WLAN equipment, SCS, RAS, Modems, VSAT,
Softswitches and Media Gateways.

The continuing importance of the domestic IT sector is visible with the combined IT Services
(including IT-enabled Services) and IT Products (Software and Hardware) markets expected to
touch Rs 2,33,930 Crore or USD 51 Billion in 2014.


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India Growth Story To Continue
“Telcos and ISPs are Domestic IT Services and IT-enabled Services markets to grow at a CAGR of 21.1% to touch Rs 98,188
well positioned to offer Crore by 2014
cloud services with ease
Of the Rs 98,188 Crore domestic IT Services and ITeS market in 2014, IT Services alone will grow
since they already have
at 16.7% CAGR over 2010-2014, while domestic ITeS spending will grow at a CAGR of 30.2%
their data centers and
over the same period.
bandwidth pipes in place,
both of which play a Managed Services will emerge as a strong growth driver with demand for increasingly sophisticated
pivotal role in delivering services engagements from the India enterprise segment.
cloud services.”
—Apalak Ghosh Growth of the Cloud Computing paradigm
Manager, Emerging Technologies, Public Cloud Computing to touch Rs. 2,434 Crore by 2014
Software and IT Services Research,
CMR
The India Public Cloud Computing market is expected to grow at a 53% CAGR over the five-
year period 2010-2014 to touch Rs. 2,434 Crore by 2014. Penetration of Cloud Services in the
India enterprise segment, which was at 4% in 2010 would increase to 6.8% by 2012. This is
a significant development, as it signals that the India software user is moving from the ‘license
and use’ model to the ‘pay per use’ paradigm. The India SaaS market is expected to touch Rs.
465 Crore in 2011.
“The advent of the cloud
computing paradigm is Another development is the growing realization amongst Indian
witnessing widespread telecom service providers (TSPs) and Internet Service Providers
interest from the vendor- (ISPs) about the business opportunity offered by the new
service provider-channel ‘cloud computing’ paradigm. TSPs and ISPs are in a vantage
community on the one position to launch cloud computing services, primarily the
hand and business leaders cloud computing flavour ‘Infrastructure as a Service’ or
and CIOs on the other. ‘IaaS’. Indian Telcos such as Reliance Communications,
This is fuelled by the Tata Communications and state-owned BSNL have already
strong belief that cloud declared their intention to address this emerging opportunity.
computing will allow a The growth of the India IaaS market is expected to be relatively
large number of SMB slow in the 2010-2012 time-frame, but is expected to pick up
enterprises to adopt thereafter. The overall CAGR for the India IaaS market during 2010-
the same enterprise 2014 is expected to be 49%.
class software and
technology solutions, Key product segments to register above average growth
which were earlier the CAGR for 2010-14: Software: 20.1%, PCs: 12.9%, Servers: 13.3%, Networking Equipment: 15.5%
exclusive preserve of
Performance of traditional sectors like manufacturing and logistics in 2010 would partially help
large enterprises. This,
to swell the market for Customer Relationship Management (CRM) and product Supply Chain
in turn is expected to
Management (SCM) solutions in 2011 and beyond. CyberMedia Research expects the India product
allow the market for
supply chain applications market to witness a growth rate of 16.5% in 2011, which is significantly
software solutions to
higher than the CAGR of 2.2% for the period 2007-10. The need to digitize documents and
open up as large, upfront
effectively manage the huge volumes of data that is generated through paper forms, particularly
capital investments in
by the BFSI, Government, Healthcare and Telecoms verticals as well as in digital media will pave
IT infrastructure can be
the way for growth of the enterprise content management (ECM) applications market in 2011 and
converted into smaller,
2012. The India content applications market is slated for an 18.5% growth in 2012 over 2011.
manageable ‘pay-per-use’
annuity payments.” Business Analytics (BA) solutions will witness increased usage across decision making levels
— Kamal Vohra
due to the greater ease of deployment and availability of pre-defined data templates. This would
Senior Manager, Software and IT be a direct result of the availability of BA solutions on SaaS platforms. (See Enterprise Solutions
Services Research, CMR section for more details).


CMR

Convergence will continue to gain momentum, with the increased focus on ‘mobility’ and
‘convenience’ to ‘make life simple’. The India client (desktop PC, notebook PC, netbook, tablet)
and digital accessory (printer, projector, digital camera) markets are expected to see increasing
consolidation of form factors in the years ahead. This trend is already evident in the case of
multi-function devices (MFDs) for the past few years.

The bulk of the client PC and accessories market will also benefit from public and social sector
initiatives, especially projects and programmes launched by the Government in the Education
and Healthcare space, and increased focus on making available broadband Internet access
to residents of villages and rural areas. A combination of these initiatives will drive increase in
penetration of IT and telecommunication products and services. Increased adoption of digital
products and exposure to content through the Internet and DTH television will in turn generate
demand for digital lifestyle products, consumer packaged goods and services in rural areas
in 2012 and beyond.
“As the market matures
and grows in size, vendors In the case of the digital camera market, CyberMedia Research expects the point-and-shoot (P&S)
and OEMs are expected camera category to grow at a CAGR of 27%, while DSLR cameras would grow at a CAGR of 61% in
to launch devices with terms of units over the period 2010-2015. The overall India digital camera market would grow at a
innovative, new features to CAGR of 29% in terms of units over the same period. The India digital camera market would touch
cater to emerging demand 50.6 lakh units in 2012, of which 46 lakh units would be P&S cameras, while the remaining 4.6
patterns. Examples lakh would be DSLR cameras.
that come to mind are, With increasing IT adoption among a large number of Indian enterprises, there has been a sharp
integration of both camera increase in the levels of business intelligence data generated. Fast paced changes in the external
and projector in a mobile business environment, coupled with the proliferation of IT are driving Indian enterprises to look for
phone, and the availability flexible network architectures that can be ‘dynamically provisioned’ based on real time usage patterns.
of both computation and Geographical expansion, increasing use of converged networks, deployment of enterprisewide
communication ‘apps’ or applications, demand for data centers and network virtualization have served to increase the importance
features in a media tablet.” of structured cabling solutions (SCS) in India in recent years. The India Networking Equipment market
“The savvy Indian (including Switches, Routers, IPT equipment and Structured cabling Solutions) is expected to grow at
customer is expected nearly 20% in 2012 (over 2011) to touch Rs 18,688 Crore or USD 4.06 Billion.
to choose her ‘device
portfolio’ based on need Enterprise-wide solutions spending to take off in 2011
and lifestyle preferences. Cloud enablement of applications in 2012
For instance, a business
a) Enterprise Resource Planning (ERP) Solutions: The ERP solutions market was negatively
executive may choose to
impacted due to the global recessionary trends in 2009. There were signs of recuperation in
ignore the netbook and
2010, in which the ERP market grew by 20.3% over 2009. This trend is expected to continue
go straight for a media
in 2011, as the ERP market is slated to register a growth of 17.9% over 2010. When viewed
tablet to complement
in the light of the CAGR for the period 2007-10 which was 8.2%, the projected growth rate in
her notebook PC and
2011 over 2010 is a significant improvement. The large size of the ERP market also augments
smartphone. ‘One size
the opportunities that await ERP vendors and the IT services players in 2012. Most large
does not fit all’ and
enterprises have deployed an ERP package and would go in for a revamp or an upgrade. The
customers can be expected
bulk of the demand would come from mid-size enterprises, which are in the expansion mode,
to exercise their choice
and would deploy ERP solutions for cost reduction and resource optimisation.
based on a ‘best fit’
assessment of individual b) Performance of traditional sectors like manufacturing and logistics in 2010 would
need and investment swell the market of CRM, product supply chain solutions in 2011 and beyond:
capacity.” Enterprises in manufacturing are revamping their supply chain networks. This trend is largely
—Sumanta Mukherjee as a result of the increasing acceptance of e-Commerce and its integration into traditional
General Manager, Computing Products, ‘brick-and-mortar’ business models by various industries such as books, apparel, consumer
Peripherals and Channels Research,
electronics, gifts and accessories. This will drive up spending in the Supply Chain Management
CMR


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(SCM) applications market. Advanced production planning software will also find adoption in
2011 and 2012. CyberMedia Research expects the India product supply chain solutions
market to witness a growth rate of 16.5% in 2011, which is significantly higher than the CAGR
of 2.2% for the period 2007-10. The higher growth phase started in 2010 and is expected to
gather strong momentum in 2011
c) Enterprise Content Management (ECM): The need to digitize documents and effectively
manage the huge volumes of data that is available in paper as well as in digital media will
pave the way for the growth of the content management applications market in 2011. The
Government sector would emerge as one of the most important contributors to this growth
story. The India content applications market is slated for an 18.5% growth in 2011 over 2010.
This number is higher than the growth observed in 2010 over 2009 which was 13.5%, and
also than the CAGR for the period 2007-10, which was a mere 8.8%.
d) Business Analytics: In 2011, the Business Analytics (BA) space will be largely focused
on moving to the cloud. Software providers who do not already have SaaS versions of their
BA solutions available will offer this new option to customers. Many customers will seriously
evaluate the possibility of migrating their BA solutions to the cloud, as vendors improve the
portfolio of their SaaS solutions and delivery against service level agreement (SLA) norms,
companies will rely more on SaaS BA providers to dissect their information for actionable
insights to improve decision making.

The deployment of BA solutions with mobile functionality features will be an additional impetus
for using these solutions. CyberMedia Research expects to see strong collaborative functio

nality features and specific capabilities for analyzing unstructured content and data coming from
social media sources. Collaboration, mobility, and self-service capabilities will promote the usage
of BA applications. BA applications will become even more user-centric and less technical.

The next generation of BA solutions will be increasingly deployed on cloud platforms in 2012.

Enterprise IT infrastructure focused on optimization
Storage solutions, data center consolidation and virtualization, and unified communications plus
collaborative applications to help in resource optimization and boosting of business productivity

a) Storage resource management / optimization, data de-duplication, automated
tiering solutions:

For 2011, technologies of importance in the enterprise IT infrastructure domain are primarily
expected to be storage resource optimisation, data de-duplication and automated tiering
solutions. The use of storage resource optimization and resource management tools will see
greater experimentation amongst enterprises in 2011, though they will fall short of becoming
mainstream. However, some of the key arguments in favour of eventual mainstreaming and
wider adoption of such technologies are outlined below:

i) Storage Resource Management / Optimization: Product vendors, IT consultants
and VARs are starting to offer storage resource management tools as services to
improve storage utilization, capacity planning, monitoring and reporting. Such tools help
users gain insights, metrics and measurements that allow them to make more informed
decisions about how they should deploy their IT and storage resources. They also help
to lay a framework to support initiatives such as cloud and virtualization.

ii) Data de-duplication: Enterprises are consuming large capacities of storage day-in and
day-out, taking up more and more floor space. Even if users can get a factor of 2-to-1
data reduction on primary storage, they would save significantly; they get considerably


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more than this if they use de-duplication techniques. Primary de-duplication, or data
reduction technologies help de-duplicate or compress data on primary storage arrays.
This enables companies and organizations to store more data in the same storage array
for less money. These solutions are already available in some form in storage arrays and
their deployment is expected to expand in 2011.

iii) Automated tiering using Solid State Disks (SSDs): SSDs commonly referred
to as ‘flash drives’ have gained ground in recent quarters and in 2010 most vendors
incorporated these into automated tiering solutions in storage arrays. In such solutions,
data is automatically moved between the disk tiers and the SSD tier transparent to the
application, without the requirement for any operator or storage management admin
intervention. This means users can take data in a volume that is inactive and move it to
lower tiers. This greatly improves the cost benefit of using SSDs and helps increase the
overall performance of storage arrays. As storage usage patterns change during the course
“IT applications such as of the business cycle, the dynamic performance of the system would change accordingly.
Automatic Fare Collection Such deployments are popular in enterprise data centers. CyberMedia Research expects
(AFC) Systems for Rail, this would be one of the important storage technologies to be seen in 2011 and beyond.
Road and Multimodal
Another theme that’s likely to see some degree of experimentation in 2011 and 2012 is Data
Transport (like Metro
Footprint Reduction. This means enterprise CIOs would aim to get more productivity out of
Rail, Monorail, and Bus
existing storage resources with techniques like archiving, backup modernization, compression,
Rapid Transit (BRT);
and thin provisioning.
Intelligent Transport
System (including Urban According to CyberMedia Research, the India device management, infrastructure management and
Traffic Management storage management solutions combined market will grow at a CAGR of 23% over 2010-2015. Storage
System, Highway Traffic replication is expected to grow at 20% CAGR over the same period.
Management System,
b) Data Center consolidation, virtualization and ‘Green IT’ initiatives will focus on
Public Transportation
reducing overall cost of business operations and maximizing availability and
System, Traveler
utilization of resources
Information System, Toll
Collection System) for toll The India datacenter market will witness new trends in bandwidth pricing, power and
plazas, national highways cooling solutions and security. Datacenter consolidation and virtualization will be driven by
and city transport two main factors:
infrastructure; Airport
Information Management i) Minimize energy consumption and overall cost of operation, and
Systems (AIMS) for new ii) Maximize utilisation of IT resources for providing real-time support to business
airport terminals as well Shrinking budgets, rising energy costs and increased preference for outsourcing in
as greenfield airports data centres will lead to new engagement and management models – the hybrid
are being extensively cloud and pay-per-use regimes will replace legacy systems. Secure access to such
deployed. Around Rs 206 infrastructure will be provided through encryption and secure public-private keys (PKI:
Crore was spent during Public Key Infrastructure and PGP: Pretty Good Privacy etc.).
2010 to deploy these With increased business led focus on ‘better utilization with cost reduction’ being
‘intelligent’ IT applications the norm, ‘Green IT’ initiatives in enterprise and service provider facilities will look
and nearly Rs 4,000 Crore to build higher energy efficient data centres through right sizing, improved system
is the expected value architecture and better design.
of IT spending on these
deployments in the 4 years c) Unified Communications (UC), collaborative applications plus other ‘cost saving’
solutions
from 2011 to 2014.”
—Vivek Mishra Although the days of sending messages through ‘carrier pigeons’ and telegram are long
Manager, Smart Infrastructure and over, most Indian enterprises still use PSTN telephones + EPABX, standalone email, VoIP,
Energy Practice, CMR
chat and IM in varying degrees of mix. A large number of enterprises do not understand or


CMR

lack the resources and business drive to integrate the disparate communication channels
“Currently, the key focus into an integrated ‘unified messaging’ or unified communications system.
areas for smart grid
development in India are Today the proliferation of communication options has become a burden for enterprise IT
end of load shedding, teams to manage. This reason and the drive to provide seamless communication solutions
ensuring reliable power to business users will see many more large and mid size enterprises in India experiment
supplies, delivering with UC in 2011 and move towards fuller adoption in 2012.
cheaper power, optimum
mix of energy supplies High-growth, IT-enabled ‘intelligent’ industry verticals and government
to reduce dependence on sector set to evolve
costly power sources, and Focus on Healthcare & Lifesciences, Media & Entertainment, Retail, Government & Education sector,
more sustainable power Smart Infrastructure, Energy & Power Utilities
through integration of Verticals like BFSI, Manufacturing and Telecommunications have been traditionally strong in
green and renewable leveraging technology for business objectives. In 2012 emerging verticals like Healthcare &
resources with deployment Lifesciences (over 19% growth over 2011), Media & Entertainment (over 16% growth), along
of Net Metering. These with BFSI (nearly 15% growth), Manufacturing (over 15% growth) and Telecommunications (over
steps would lead to 16% growth), will all witness healthy IT spending growth on the back of a sustained economic
increase in overall power revival in the India economy. These rates of growth in IT spending are likely to be sustained, in
availability and strengthen spite of some moderation in GDP witnessed in FY 2010-11 due to tightening of monetary policy
energy independence for by the government to control inflationary pressures. Retail sector IT spending is expected to grow
the country.” at more than 19% in 2012 (over 2011), while IT spending growth for the Government & Education
—Vivek Mishra sector is expected to touch nearly 16% year-on-year (2012 over 2011).
Manager, Smart Infrastructure and
Energy Practice, CMR Other emerging verticals, which are expected to be future drivers of growth for the India domestic IT-
ITeS sector are Smart Infrastructure (Intelligent Transportation), and Energy & Power Utilities sectors.
All of these sectors are witnessing deployment of innovative IT-ITeS and Telecoms applications.

The Restructured Accelerated Power Development and Reforms Programme or R-APDRP Scheme
of the Ministry of Power, Government of India plans to use IT-ITeS for making power transmission
and distribution infrastructure in India ‘intelligent’. IT applications like Energy Accounting & Auditing,
Supervisory Control and Data Acquisition (SCADA) systems, MIS, Integrated Meter Reading (Billing
& Collection), Automatic Data Logging System, GIS mapping, Automatic Meter Reading and Prepaid
electricity are being enabled across most of the distribution companies (Power Utilities or Discoms)
across India. Pilots of Smart Grid deployment have also been initiated by a few discoms.

The Government of India launched the India Smart Grid Forum in June 2010. The Forum will be
a non-profit voluntary consortium of public and
private stakeholders with the prime objective
of accelerating development of Smart Grid
technologies in the India Power Utilities
Sector. The goal of the Forum would be to help
the Indian power sector deploy Smart Grid
technologies in an efficient, cost-effective,
innovative and scalable manner by bringing
together all the key stakeholders and enabling
technologies. The India Smart Grid Forum
will coordinate and cooperate with relevant
global and Indian bodies to leverage global
experience and standards wherever available
or helpful, and will highlight any gaps in the
same from an Indian perspective.


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CMR Healthcare Research and
Advisory Practice
In an increasingly interconnected and interdependent world, some of the key challenges that face healthcare
enterprises include product pipeline slowdown, optimizing R&D productivity and innovation, squeezed
budgets, patent cliffs, the threat from generics, and the need to leverage external partnerships.
To cope with the challenges and risks in such a complex healthcare marketplace, a vast array of healthcare
stakeholders depend on CMR Healthcare Research and Advisory Practice for critical perspectives and keen
insights on the healthcare market dynamics.
The CMR Healthcare Research and Advisory Practice provides market research, consulting and advisory
services for enterprises at all levels of the healthcare and life sciences value chain, from ideation to
commercialization. CMR combines research insights and ecosystem knowledge gained from Asia’s leading
life sciences platform, BioSpectrum and consulting insights from the CMR Consulting Practice for strategic
interventions designed to deliver competitive advantage to your business.
CMR employs robust qualitative and quantitative techniques and analysis, besides desk research to
understand key healthcare market drivers. We organize a vast array of healthcare data and facts into
solid, relevant metrics. By combining therapy area expertise with innovative research thinking, we provide
a global perspective aided by local understanding across Asia and through partners across the rest of the
world.
We help you address current trends and challenges, identify new technologies and leverage critical
opportunities for enterprise growth through an array of services, including industry research and market
strategies, growth consulting and capacity building.
The team at CMR comprises seasoned professionals with rich exposure and in-depth experience in the
healthcare, pharmaceuticals and biotechnology industries. By combining scientific acumen with real-world
business insights and experience, the team strives to leverage competitive advantage for your enterprise.
CMR Healthcare Research and Advisory Practice Expertise Areas
Ê Global market research
Ê Proprietary market research strategies
Ê Strategy consulting focused on growth
R&D Strategies
R&D Pipeline Management
R&D Return on Investment
R&D investment options analysis
Ê Therapeutic area entry strategies
Ê Diligence and M&A strategies
Ê Facilitating India-entry strategies
Ê Risk analysis and mitigation strategies
Ê Innovation management and technology transfer
Ê Capacity building


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CMR MarketView 2011 Part II: India Telecom Services and
Mobile Handset Markets
The India telecom services and mobile handset markets to grow at 16.7% in 2012 (over 2011)
to touch revenues of Rs 288,832 Crore or USD 63 billion.

Of this, the telecom services (including mobile and fixed line services) will contribute Rs 2,05,454
Crore (USD 45 billion) in 2012. The India mobile handset market, that includes featurephones
and smartphones, will grow at over 30 percent during 2012 to touch revenues of Rs 83,377
Crore (USD 18 billion).

In the five year period between 2010 and 2014, the India Telecoms industry will grow at a CAGR
of 15.8% to touch revenues of Rs 3,77,683 Crore or USD 82 billion.

Table 3. India Telecom Services and Mobile Phone Markets, 2010-2014 (Rs. Crore and USD Billion)
“The Telecoms growth
Categories 2010 2011 2012 2013 2014 CAGR 2010-2014
story will be a function
of the enhanced Telecom Services, Rs. Crore 159,519 184,207 205,454 226,741 248,956 11.8%
demand for high Telecom Services,
35 40 45 49 54 11.8%
USD Billion
speed broadband and
data services from Mobile Phones,
50,714 64,077 83,377 105,625 128,729 26.2%
both enterprises and Rs. Crore
consumers, as 3G and
Mobile Phones, USD Billion 11 14 18 23 28 26.2%
BWA / WiMax services
Total Domestic Telecoms
are rolled out by various Market, Rs. Crore
210,233 248,284 288,831 332,366 377,685 15.8%
operators to cover an Total Domestic Telecoms
46 54 63 72 82 15.8%
increasing number of Market, USD Billion
cities and towns.” Source: CyberMedia Research (CMR), 2011

—Anirban Banerjee Figure 3. India Telecom Services and Mobile Phone Markets, 2010-2014 (Rs. Crore)
Associate Vice President, Research
and Advisory Services, CMR


Notes:
1) Mobile Telecommunication Services include voice telephony services, data services and VAS.
2) Fixed-line Telecommunication Services include PSTN, leased line, IP-VPN, WLL, xDSL and other services.
3) Mobile Phones include featurephones and smartphones.
4) Spends on Telecoms Network Infrastructure and Tablets not included.

The growth in the India domestic mobile handsets market will be fuelled by a more than 150%
increment in the value of featurephones and smartphones shipped, from Rs 50,714 Crore in
2010 to Rs 1,28,729 Crore in 2014.

The India Telecom Services sector may see policy changes that could result in market


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consolidation over the next few quarters.

The key highlights of CMR‘s MarketView 2011 for the India Telecoms Services and Products
market are as follows:

Major growth drivers: Launch and roll-out of 3G and BWA / WiMax / LTE
services
Usage of high speed broadband, VAS and data services to grow

Establishment of 3G and BWA (WiMax and Long Term Evolution or LTE) will have a positive impact
on the India market; however, broadband content will remain in early stages of development
through 2011.

With the allocation of 3G and BWA spectrum and rollout of services by private as well as incumbent
operators, WiMax/LTE will help in overcoming the infrastructure issues in the country as well as
deliver enhanced performance to end-users.

In terms of broadband content, 2011 will witness early stages of development. However, as
WiMax / LTE services gain in popularity, content creation and mobile application development will
witness increased focus by vendors, developers and service providers looking to build their own
portfolio of unique ‘apps’.

Other high growth Telecom Services areas include IP-TV, IP-VPN, VoIP, Mobile VAS etc. on.

Mobile handsets to witness a high growth rate
At 26.2% CAGR over the period 2010-2014, the segment is slated to touch Rs 1,28,729 Crore in 2014

The smartphones market in India is expected grow to over 10 million units in 2011 from 6 million
units in 2010. The Android Operating System will continue to gain acceptance as a mobile
operating system (OS) and 12% of all smartphones shipped in India during 2011 are expected to
be based on the Android platform.

The ‘early adopter’ phenomenon in media tablets will become visible in India in 2011, but will
fight shy of becoming mainstream. CyberMedia Research expects over 1,00,000 Tablets to ship
in 2011 alone, based on the current portfolio of players like Samsung, Apple, Olive and others.
However, media tablets in their present form and currently prevailing price points are unlikely to
excite the large majority of consumers. A ‘game changer’ in this space could happen in late 2011
/ early 2012 if a players such as Reliance Infotel introduces a ‘mass market’ Tablet priced lower
than Rs. 10,000 per unit.


CMR

Backgrounder on Smartphones
“Smartphones are mobile devices with evolved operating systems, that include Symbian Series 60, Android
OS, iPhone OS, Blackberry OS, Linux among others,” according to Naveen Mishra, Senior Manager,
Telecoms Practice, CMR.
In addition to voice capability these devices have the ability to download and run applications, and store
user data beyond their required personal information management capabilities.
These devices are able to synchronize with a desktop or laptop computer. Smartphones offer users PC-like
functionality. These phones have ended the need to carry a separate PDA (Personal Digital Assistant) and
a mobile phone. Examples of present day smartphones include the Apple iPhone 4, Motorola Milestone,
HTC Desire, Samsung Galaxy, Blackberry Curve etc.
Users can browse the Internet, check mail, blog, share photographs, update their status on social
networking sites, play games, download applications with their smartphones. Till the end of 2010,
a top-end smartphone used to be equipped with a 1GHz processor. Starting 2011, with the use of
dual core processors in smartphones, these devices have become more powerful as compared to their
predecessors.
“Going forward these devices will become as powerful as present day laptops”, adds Naveen.
Smartphones like Motorola Atrix 4G, LG Optimus X2 use dual core processors. A dual core processor is a
combination of two 1 GHz processors, which can be used in parallel giving more power and speed to the
device. Though these processors enable more power but a smartphone’s overall performance still depends
on the integration of its software with its hardware. For example, how closely the phone’s software and
applications are able to interact with its hardware taking out the maximum advantage of hardware abilities
of the phone. The best example is Apple iPhone 4, which runs on a single core processor but is able to
take full advantage of its hardware abilities.
Some of the applications where multi-core processor based smartphones can provide a boost to usage are
Gaming, Autostereoscopic 3D enabled handsets, video streaming, HD (high definition) video recording and
playback, video conferencing, HDMI user interface.
Autostereoscopic technique is a method of displaying images with perception of 3D depth without requiring
the viewer to wear any glasses. This activity needs extra power and the new generation of smartphones
is able to deliver this.
The dual core smartphones will also allow users to play advanced games, which need more power. Users
will be able to enjoy games or videos on a bigger screen by connecting the smartphone output to an HDTV
through HDMI ports. Again, the increased power of a new generation smartphone will prove helpful in
running HDMI applications.
Dual-core processors will enable full HD video playback and recording at 1080p resolution, which is a big
leap forward from the 720p video playback currently available in top present day smartphone models. Beyond
full HD support, dual-core processors would enable smartphones to run more demanding applications like
videoconferencing and video streaming. These smartphones will also provide a significantly higher speed
and performance for multitasking in comparison to ‘first generation’ smartphones.
The market is expected to witness more excitement on the CPU front, with the launch of multi-core
processor based smartphones by a number of mobile phone vendors by end 2011.

14

CMR

CMR Semiconductor Industry Practice
The worldwide semiconductor industry was pegged at an annual value of nearly US$ 300 Billion in 2010 (Source:
Semiconductor Industry Association, http://www.sia-online.org). It has shown steady growth over the years despite many
ups and downs in the verticals that it serves. The reason for this is the diversification in usage of chips coupled with
restructuring of business models within the industry.
With the evolution of the fabless business model and a shift from Integrated Device Manufacturing (IDM) to an R&D-
focused, fabless chip organisation, the semiconductor industry has become innovative, highly competitive and fragmented.
Today the industry has some of the leading chip solutions being developed by fabless companies. This model has allowed
scientists with an entrepreneurial bent of mind to launch their own companies.
CMR has over 24 years of research experience in the Information Technology and Telecommunications domains. Banking
upon its rich experience in these domains and to focus on the emerging semiconductor markets, the CMR Semiconductor
Practice has been established as an independent research entity. Besides serving the research requirements of
the semiconductor industry, the practice will provide useful insights about the chip industry to equipment and device
manufacturers.
CMR’s research is chip type-agnostic covering all major chip designs such as FPGAs, ASSPs, DSPs and ASICs. The
rationale of covering all of these designs is that they are not competitive but collaborative in nature. Though, they may be
more or less performing similar tasks, their applications are varied.
Semiconductor research and advisory services offered by CMR provide industry information along the entire value chain of
the communications industry. CMR’s offerings cover:
1) Industry Profiling Studies
2) Industry and Segment Analyses
3) Competitive Analysis
4) Syndicated Reports
5) Custom Consulting Studies
CMR adopts a deep-dive approach for segmenting the communications industry, based on applications as well as industry
standards and protocols.

CMR Semiconductor Industry Practice Expertise Areas
• Infrastructure Equipment: All communications services and applications evolve out of a robust infrastructure that
not only allows the service provider to offer new services but also have a roadmap for scalability and upgrading.
The specific features of infrastructure equipments used define application areas that form the basis of any service
offerings. At the core of these infrastructure equipments like DSLAMs, BTS, application servers, media servers,
gateways and infrastructure routers we find a chip carrying out the underlying computing processes. CMR research
on infrastructure chips focuses on providing information and analysis about the usage, latest trends, applications and
design innovations that will enable players in taking strategic decisions about the selection of a chip.
• Network Devices: Network forms the basis of any communications delivery platform. A number of devices like
switches, routers and gateways are used to perform specific tasks on the network. At the core of these devices are
processors and semiconductor materials that control the processes that help in data flow, control and management.
CMR reports and information bulletins (newsletters) will keep stakeholders abreast of the latest developments and
changes in the industry. The chip manufacturers will get information about the requirements and expectations of
device manufacturers, while device manufacturers will be able to keep a track on important developments within the
semiconductor industry.
• End User Equipment / CPE: CPE and end-user device manufacturers are facing a number of challenges as existing
lines of demarcation get erased. A data device is not capable of being used for voice and vice versa. Convergence
at the device level is the focus of equipment vendors. From mobile phones to tablets to laptop PCs, applications are
getting cross-pollinated with a variety of devices capable of similar applications. As a device manufacturer, it is critical
to know which processor and semiconductor materials should go into the device so that it serves the purpose of the
target end user segment. At the chip level, this means a challenge of reducing the size, increasing performance
and offering competitive price points. CMR’s research offerings capture insights at the CPE level that provide critical
market insights to chip vendors so that their offerings are in sync with industry requirements.


About CyberMedia Research (CMR)
A part of CyberMedia, South Asia’s largest specialty publisher, CyberMedia Research (CMR) has been a front runner in
the market research, consulting and advisory services since 1986.

CyberMedia Research (CMR) offers research and consulting services – insights, market intelligence, market sizing,
ecosystem mapping and go-to-market services – covering the IT, ITeS, Semiconductor, Telecommunications,
Government, SMB & Entrepreneurship, Smart Infrastructure, Energy and Healthcare & Life Sciences domains.

CMR’s research studies cover stakeholder satisfaction surveys, mega spender assessments and market mapping
studies for the diversified list of sectors mentioned above.

For more details, please visit
http://www.cmrindia.com

CMR

For inquiries please contact:

Vishaal Bhatnagar
Associate Vice President, Marketing, Communications and
Analyst Relations
+91 - 98101 91634
vbhatnagar@cmrindia.com

Tinu Thomas
National Sales Manager, India
+91 - 99804 94509
tthomas@cmrindia.com


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