in mobile broadband

About Nokia Solutions & Networks' MBit Index

In the previous issue released in May 2013, the Mbit index covered 2G, 3G and overall data traffic growth trends at a
pan-India and circle category level, along with a comparison of data consumption per user on 2G and 3G for 2012.
The report also covered data device usage trends in India.
This edition of the MBit Index also evaluates 2G, 3G and overall data traffic growth trends at a pan-India and circle
category level, data consumption per user on 2G and 3G for 2013 and further deep dives into 3G coverage across
circle categories in India.

2014 issue

Nokia Solutions and Networks' MBit Index is a report on mobile broadband performance in India. It aims to provide
reliable time series based statistics and insights about mobile broadband traffic growth in the country, co-relating
these trends with changes in various ecosystem drivers such as subscriber usage patterns, devices, tariffs,
coverage etc.

Mbit Index has been created based on Nokia Solutions and Networks' analysis of data obtained from various
sources. It analyses mobile broadband traffic trends only at a consolidated level and does not intend to provide any
comparative analysis of data growth of different operators.

3G growth in India exceeds world's average - 3G grew by 146% y-o-y in 2013, exceeding the world average of mobile
broadband data growth that is doubling every year.

3G gains share in total mobile data, 2G stabilizes further - 3G represented 43% of total mobile data in 2013 as
against 33% in 2012. 2G growth rate and its share in total mobile data further stabilized due to reduced premium on 3G
services and higher smart phone penetration leading to migration of high end 2G customers to 3G.

CAT A circles deliver phenomenal year of 3G - CAT A circles continue to ride the 3G wave, with 3G data growing at
185% y-o-y; a spectacular growth considering the circles had the highest 3G payload among all circles in the beginning
of 2013.

Current 3G coverage limited; number of 3G sites much below 2G sites across circles - The 3G coverage in India is
much below the levels needed to provide superior customer experience associated with 3G technology. Even in 'Top 50'
cities by mobile traffic in CAT A and CAT B circles, many cities are not covered by 3G and require an additional 20-25% of
existing sites for coverage.

Readjusting 3G's 'place' & 'promotion' levers can usher in new wave of mobile data in India - The 3G 'product' &
'price' have come to a level conducive for mass adoption in the past two years. Fine tuning 'place' by increasing 3G
coverage across circles and 'promotion' by partnering with OTT/ Social media players can take 3G to sky-high levels in
India.

Mbit Index - Highlights

Back to basics Time to readjust the '4P's (Product, Price, Place &
Promotion) of 3G in India

2
2014 ISSUE

Pan India Level Mobile Broadband

All India 2G and 3G Data Payload (PB1)

60

2G

Total

3G

Growth rate from

Jan'13 to Dec'13
87%

50

PB per month

40

Growth rate from

Jan'12 to Dec'12

30

59%

92%

146%

20

66%

10

196%

0
Dec 11

Mar 12

Jun 12

Sep 12

Dec 12

Mar 13

Jun 13

Sep 13

Dec 13

Source: Nokia Solutions and Networks

Mobile data (2G+3G) continues to grow in India in high double digit figures. Total
mobile data increased by 87% from Jan 2013 to Dec 2013. 3G continues to be the
prime contributor in the data growth, growing its share from 33% in 2012 to 43%
of total mobile data in 2013.
3G data grew by a whopping 146% in 2013, a growth rate much higher than that
seen in other parts of the world where broadband data (3G & LTE) is growing at an
average of 100%. (Source : 100+ NSN network deployments) The active 3G
subscriber base grew by 50% y-o-y in 2013.

3G growth
in India
surpasses
worlds
average

2G continues to stabilize in India. It grew by 59% in 2013 compared to 66% in 2012.

The increase in 2G prices in the beginning of 2013 has greatly reduced the premium charged on 3G services,
thus enabling easy migration of high end 2G data users to 3G. 2G now represents 57% of total data as against 66% at
the end of 2012.

An average 3G user is consuming 3.6 X more data than

an average 2G user. By the end of 2013, an average 3G
user consumed 532MB/month compared to a 2G user who
consumed 146MB/ month.

2G and 3G Mobile Data Usage Per

Active User (MB per month)
532

600
23%

MB per month

500

434
2G

400
3G

300
27%

200

115

146

100
0
Dec 12
Source: Nokia Solutions and Networks

1 - 1 PetaByte (PB) = 1024TeraBytes(TB)

Dec 13

In certain metros and CAT A circles average data

consumption per user is as high as 1GB/month,
indicating huge demand and sustained interest in 3G
services.

3
2014 ISSUE

2G & 3G Data Payload (PB1) in Metro Circles

2G & 3G Data Payload (PB1) in Category A Circles

14

14

3G

2G

12

12

10

10

8
6

Growth rate from

Jan'13 to Dec'13

Growth rate from

Jan'12 to Dec'12
40%

20%

PB per month

PB per month

Mobile data trend by circle category

3G

2G

80%
185%

86%

6
234%

100%
2

2
236%

0
Dec 11

Dec 12

0
Dec 11

Dec 13

Source: Nokia Solutions and Networks

2G

2G & 3G Data Payload (PB1) in Category C Circles

14

3G

12

3G

2G

12
58%

8
60%
6
115%
4

10

PB per month

10

PB per month

Dec 13

Source: Nokia Solutions and Networks

2G & 3G Data Payload (PB1) in Category B Circles

14

Dec 12

8
6
4

123%

54%

0
Dec 11

0
Dec 11

Dec 12

Source: Nokia Solutions and Networks

Dec 13

84%
165%

224%
Dec 12

Dec 13

Source: Nokia Solutions and Networks

Metros (11% of covered population) account for 17% of total mobile

data. 3G data payload doubled y-o-y in metros in 2013. 3G now
accounts for half of mobile data in the metros, a direct result of
higher penetration of smartphones, reduced 2G-3G price differential
and good network coverage of 3G.

Half of countrys
3G mobile data
from CAT A circles

Category A (36% of covered population) accounts for 47% of total

mobile data. 3G data grew by a record 185% y-o-y in these circles a phenomenal increase, considering these circles had the highest 3G payload in 2012 among all other categories of
circles. CAT A now drives half of all 3G mobile data in the country.
Category B (39% of covered population) accounts for 28% of total mobile data. Despite a lower penetration of 3G
enabled devices vis--vis metros, 3G data payload in these circles surpassed that of metros in 2013. 3G now
accounts for 31% of data traffic in Category B circles. While the demand for high speed mobile internet is evident, there
are noticeable 3G coverage gaps in these circles. Addressing these gaps may change the 3G data story in India.
Category C (14% of covered population) accounts for 8% of total mobile data. 3G payload increased by over
165% in 2013 with 3G now accounting for 47% of the total data.

1 - 1 PetaByte (PB) = 1024TeraBytes(TB)

4
2014 ISSUE

3G coverage by circle category

An analysis of 3G coverage in India shows huge coverage gaps across categories of circle. Even in 'Top 50' cities1 in
each circle, number of 3G sites in much less than number of 2G sites. (By virtue of the different frequencies of the 3G
(2100 Mhz) and 2G (900 / 1800 Mhz), 3G requires more number of sites than 2G for a particular service. However, the use
of 900 Mhz band for 3G technology in the future would potentially help in bridging this gap.)
3G Coverage Gap in a Sample Metro Circle

15-20%
X
Additional small
cell deployments

Existing 3G sites

Metros - Of all the telecom circles, metro circles are best covered
geographically. Still, there are patches where 3G is handed over
to 2G. On an average, additional 15-20% 3G sites are required
to provide same coverage as 2G. Besides, due to huge indoors
data demand in these circles, small cells deployment can further
elevate 3G user experience.

Existing 3G vs 2G gap

Source: Nokia Solutions and Networks

3G Coverage Gap in top 50 cities for a

Sample Category A Circle
20-25%

10-15%

Existing 3G sites

3G vs 2G gap in
current 3G covered
Top 50 cities

3G coverage gap in
non-covered
Top 50 cities

CAT A circles - Of the 'Top 50' cities1 in CAT A circles where

3G is launched, additional 10-15% 3G sites are required to
provide the same coverage as 2G. Moreover, there are still
some cities in the 'Top 50' cities1, which do not have 3G coverage.
On an average, 20-25% of existing 3G sites are required to
cover the non-covered cities in 'Top 50' cities1. This gap is less
(5-10%) in circles where an operator has a leadership position
(high subscriber base / ARPU circles).

Source: Nokia Solutions and Networks

3G Coverage Gap in top 50 cities for a

Sample Category B Circle
20-25%
15-20%

Existing 3G sites

3G vs 2G gap in
current 3G covered
Top 50 cities

3G coverage gap in
non-covered
Top 50 cities

Source: Nokia Solutions and Networks

3G Coverage Gap in top 50 cities for a

Sample Category C Circle

Existing 3G sites

25-30%

3G vs 2G gap in
current 3G covered
Top 50 cities

Source: Nokia Solutions and Networks

15%

3G coverage gap in
non-covered
Top 50 cities

CAT B circles - Of the 'Top 50' cities1 where 3G is launched,

additional 15-20% 3G sites are required to provide the same
coverage as 2G. These circles also have cities in 'Top 50' cities1
which do not have 3G coverage. On an average, 20-25% of
existing 3G sites are required to cover the non-covered
cities in 'Top 50' cities1. This gap is less (5-10%) in circles where
an operator has a leadership position (high subscriber base /
ARPU circles).

CAT C Circles - The contribution of these circles to total mobile

data (2G & 3G) has traditionally been low due to poor coverage of
both 2G and 3G. The mobile data growth trends in 2013 in these
circles (2G growth rate of 56% y-o-y and 3G growth rate of
165% y-o-y) are encouraging and indicate a big demand for
high quality mobile networks. Operators, therefore, need to
build both 2G and 3G networks in these circles. Of the 'Top 50'
cities1 where 3G is launched, additional 25-30% 3G sites are
required to provide the same coverage as 2G. Also, beyond
the Top 10 cities, the 3G sites per city are very less.

Note : The above coverage graphs are representative of trends noted in other circles in each category as well

Considering the trends of 2G data uptake in India, there is a need to expand 3G coverage beyond the 'Top 50' cities1. While few
circles in India have 3G beyond 'Top 50' cities1, most circles are still limited to top 50 or less.
1: Top 50 cities are the ones that generate most 2G traffic in each circle and therefore need most number of 2G sites. From network planning perspective, these
cities are also the prime candidtes for building 3G coverage.

5
2014 ISSUE

Conclusions It's time to readjust the '4P's of 3G in India

Success of any offering is determined by the optimum inter-play of the '4P's - product, price, place and promotion.
3G as a technology provides superior speed, connectivity, good quality of service and is a great 'product' in itself. Over
the past two years, operators in India have also successfully bridged the gap between 2G and 3G 'prices' bringing it to a
level that is suitable for mass-adoption.
It is now time to adjust the other two levers of 'place' & 'promotion' for mass scale adoption of 3G in India.

Place
International Benchmarks on Coverage and Penetration of 3G Services

120%

Hong Kong
Taiwan

3G Penetration

90%

Australia

R2 = .8871
Singapore

Malaysia
60%

Indonesia

30%
Thailand
0%
0%

20%

40%

60%

80%

100%

3G Coverage
Source: Nokia Solutions and Networks

Trends around the world show a very strong correlation between 3G coverage and its penetration globally. Good coverage is
key in providing a seamless connectivity which results in great customer experience and ensures customer loyalty to the
technology and the service provider.
However, as seen in the graphs above, 3G coverage in India is still limited. Our analysis of 'Top 50' cities across each category
of circle shows that the number of 3G sites in most circles is much less than what is required to provide a super customer
experience that is associated with 3G technology. Operators therefore, need to roll out additional 3G sites across circles
quickly.

Promotion

WHAT

WHAT
- Access to certain sites at
US$0.45/day
RESULT
- Increase in mobile data
subscribers from 0% to
20% in 2 years
- Data revenue at 13% of
total
Packs:

Facebook + Twitter + Multiply

Facebook + Yahoo Mail + Gmail + Jobstreet

Facebook + YouTube

1: Perfect correlation is denoted by a R2 of 1

WHAT
- Free trials of
Facebook 0 -- Facebook
without pictures
RESULT
- 40% increase in data usage

- Free Facebook 0 &

Twitter0 campaigns for
1 year
RESULT
- 30,000 social media
packages sold in 1
month post promotion
- 600,000 pcakages sold
in 4 months
Packs:

Unlimited Twitter for US$1.50 / month

Unlimited Facebook for US$2 / month

20 MB Twitter +Facebook for US$2.60 / month

+ special youth price of US$2

6
2014 ISSUE

Globally, operators are reaping the benefits of innovative partnerships with social media brands such as Facebook,
Twitter and WhatsApp. As seen in the examples above, such partnerships have resulted in new revenue streams,
steady increase in the number of active mobile data subscribers and stronger brand equity for operators.
While operators in India have started partnering with social media brands, the number and scope of such
partnerships is limited. Provided more focus and importance, these alliances can drive 3G uptake to new levels and
bring in the next wave of mobile broadband revolution in India.

About Nokia Solutions & Networks

NSN is the market leader of wireless equipment and services in India
- Unparalleled scale with 15,000 employees across all 22 circles
- India home to two R&D centres and global delivery centres each and to country's largest manufacturing hub
- Judged strong #2 vendor with 26% wireless infrastructure market share in India by V&D100 in 2013
- Equipment provider in over 60 networks via 230,000 sites
- #1 Managed Services partner with 160,000 2G & 3G sites
- Early LTE player, successfully deployed TD-LTE network for Bharti in Maharashtra
NSN is a global leader of Mobile Broadband
- 136 LTE customers, including 43 TD-LTE references, LTE leaders in Japan, Korea, USA
- 208 HSPA contracts; radio suppliers in networks serving half of world's 1.5 Bn* WCDMA/HSPA subscribers
- #1 in 'Customer Experience Management' as per operator ranking
- 460 Mn subscribers managed in 100+ Managed Services projects around the world

* Informa database, 2014

This report is based on Nokia Solutions and Networks' internal analysis of aggregated data, various assumptions, dependencies and projections and
Nokia Solutions and Networks shall not be liable for or bound by the statements or omissions herein. This report is purely for information purposes and
Nokia Solutions and Networks does not make any representation or assume any liability with respect to the contents or use of this report. This report uses
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The furnishing of this document does not grant you the right to reproduce this report, in whole or in part.
2014 Nokia Solutions and Networks.