CONVERGENCE broadcast telecom ….The Journey Begins !!! ================================================================ BES Expo and Conference’ 2007; 1st to 3rd Feb’2007

Indian Broadcast Industry MSOs across Country 6 Number of Cable operators 30000 On path of digitalisation Head-end in the Sky (HITS) under consideration Indian Broadcast Industry No. of FM Channels 192 Additional 233 stations (Private) operational byMay’07 Television Reach 112 million homes Cable & Satellite Homes 68 million homes DTH Subscribers estimated at 5 million Radio reach 99.13% of population Number of Radio sets 145 million Number of Radio sets with FM 86 million Broadcasting mix of Govt. & Private All broadcast activity under Regulation Digitalisation & Newer technological applications on way DTH Operators 03 2 more to follow Subscriber base fast catching up

Indian Telecom Boom Tele-density over 15% rising from 2% in 2000 In year 2000, this figure was just 2% Indian Telecom Boom Tele-density over 15% rising from 2% in 2000 Mobile telephony opened in 1995; subscriber base 130 million..rising @ 6mn per month Land (Wired) phones 40 million Fastest growing market in Asia Both CDMA and GSM technologies in practice Overall revenue rise to Rs. 86,720 Cr Three Telecom companies estimated in first 10 biggest companies

Internet Scene Internet penetration is alarmingly low …does not find relevance with the global scenario as well as the national economy. Countries like Macau, Poland, Iceland and Israel are far ahead than India India’s broadband penetration is below 3% in urban sector; whole India penetration is less than 0.5%. Estimated 60% of internet users depend on more than 10,000 cyber-café ISP –389; Internet subscriber less than 8mn Revenue in 2005-06 is Rs 492 cr Internet subscribers is projected to touch 18million figure by the end of 2007

Indian Market Scenario Indian Media industry growing at 15%; faster than National Economy in last few years Trend continues --Business Optimism Index for first half of this year is higher by 14% than last year Media expenditure increases across– Radio 24%, Internet 35% and Television 19% in the year ending 2005. E-Sales/Commerce activities on rise – increase by over 95% in last one year Telecom revenue rising by around 21% Global figures much higher…. Europe during similar times showed 230% rise

INDIAN MEDIA CONSUMER CHARACTER Late Starters Varied Tastes Conservative in approach Cautious Regulatory Eye Non-Tech Savvy Viewers Discouraging personal economy Result: Delayed Technological applications & acceptance !!

INDUSTRY EVOLUTION

25 years; Plurality of Television Alternatives;112 mn viewer homes Evolution of TV Broadcasting Single TV channel - Single Platform (Terrestrial) Multi TV Channel Bouquet - Wired Platform (Cable) Multi TV Channel bouquet; few niche channels - Multi Platforms options ( both wired & Unwired) 25 years; Plurality of Television Alternatives;112 mn viewer homes

Evolution of Telecom Sector Started 125 yrs back by Private company, in Govt. hand in between & now mix of both. Phase 2 >> Wired Telephone  Service provider Market --Rare Long-distance calls -- Long queue for connections Phase 3 >> Advent of STD/ISD facility – PCO rains --Talking culture cultivation, -- Employment/Business scene Phase 4 >>Mobile Telephony Arrival – Talking revolution -- New era of telecom -- Multiple options User market 125 years; Multiple Telephony Options; 170mn users

Evolution Of Data Service Internet an imaginary concept a decade ago Development of infrastructure –670,000Km of fibre laid -Enhancement of Connectivity - Lowering of cost Huge dependence on networked Information (Education to Business to Entertainment) Internet/Broadband penetration still quite low 10 years; Life’s essentiality; Over 7mn Internet users; 389 ISPs; More than 10,000Cyber cafe

The Consumer Behavior Evolution Trend towards Mecasting/Egocasting Zero Tolerant Looks for alternative solutions Wants more value of money King of the aspects

Business Mandates… Edge out competitors Value added deliverables Enhanced Profitability & Valuation Relevant Result – Telcos incorporate Video/audio in their product & Broadcasters/Distributors tempted to provide Voice & Data service

Evolution of Functionalities Telephony Voice Fax Photography Images Publishing Newspaper Broadcasting Audio/Video IT system Internet

Thus..Arrives Convergence !!! …with Spirit of Intercativity. Evolution of Functionalities Images SERVER WITH STORAGE Voice Distribution Platform / Application Text Information Thus..Arrives Convergence !!! …with Spirit of Intercativity. Broadcasting IT system

Convergence Drives Use of Office PC for watching TV Channels Possibility of TV Receivers at Home to access internet Value added services like Radio Data services Interactive Broadcasting --- User participation Optimisation of business models

Factors Driving Evolution Enhancing Economy … increased spending power Market competitiveness calling for value-add on by the service providers Technological advancements… creating enhanced solutions & applications Consumer behavior…more demanding Social Values -- changing life-style owing to reducing average age & increasing literacy levels

Convergence TECHNOLOGY APPLICATIONS …Device Driven …Operator Driven Multiplay Workstations & TV Sets Mobile Ph with FM/ MP3/ GPRS and now TV Mobile Operators providing video services DTH/Cable Operators providing Voice/data and interactive services

TECHNOLOGY SUPPORT Efficient Compression algorithm H.264(MPEG4/AVC) Efficient Modulation techniques Advanced Connectivity Modes like Wimax High speed & reliable Network design tools Strong Internet Protocol (IP) formats Low cost and reliable Storage Sensitive and user friendly receivers Return path techniques –DVB(RCS),Internet,VSATs

Networked Life Source of Products & Services VIEWS E-SHOPPING NETWORK NEWS INFORMATION TELE-EDUCATION MARKET TELE-MEDICINE NETWORK ONLINE BOOKING SURVEILLANCE MOBILE DELIVERY

Functional Scene Regulation/ Policies Technology OPERATIONS MODEL Market/ Competitors

REGULATORY Content Distribution Platforms Operating License Copy Rights Issue View Tariff Format standardisation Content Code adherence Technical standards Performance and Quality parameters Distribution Rights Tariff Spectrum allocation and discipline REGULATORY End-user device( STB) specifications & interoperability Quality of service – efficient SMS Consumer Rights protection Content Distribution Platforms CONSUMER

Market Demands Customised and processed content Synergised revenue return streams Increased competitiveness calls for the operator to be innovative Co-existence of competitive platforms Strategic tie-ups and consolidations

Technology Aspects Technology identification and standardisation Integration with the existing services Cost of the hardware and software applications Coping with the technology dynamics scene Return Path techniques Maximising product values

Challenges Regulatory guidelines Content protection and customisation Technology would make the Convergence scenario possible and inescapable ….. But challenges stand on the face !! Regulatory guidelines Content protection and customisation Commercial practices and innovations

Regulatory Issues Need for an Umbrella Regulator Cross-Media ownership Licensing process..both forward and return path Content Monitoring Spectrum planning Level Playing Fields – Telecom Service Providers & Broadcast Operators Customs Duities parity between IT & Broadcast sectors Service tax anamoly on subscription for cable/DTH and Telecom service FDI limit is different for IT/Telecom and Broadcast sector

Commercial Concerns Fragmentation of advertising revenue No service provider has pure domain Content Piracy and copyright issues Low ad-spend at 0.34%of GDP – much lower than global average Ad-avoidance phenomenon

Initiative BBC World study of advertising avoidance Ad Avoidance Phenomenon Initiative BBC World study of advertising avoidance

Intense Competition Multiple options, Consumer is King Broadcasting The User Perspective -- Broadcasting Intense Competition Multiple options, Consumer is King Telecom Internet/Data

Consumer Centric Business …Immediate Implication Consumer controlled content --- Interactive Broadcasting Content– Anywhere, Anytime End product is Value Rich Better service at lower cost Expansion of Market size

A WIN-WIN SITUATION FOR ALL OF US CONVERGENCE A WIN-WIN SITUATION FOR ALL OF US

This is just the Beginning…!! THANK YOU ALL