Market Research Report : LBS Market in India 2012

Location Based Services in IndiaLocation Based Services in India

August 2012

Executive Summary

Market

Location based service market in India is yet to reach maturity but it is expected to break the INR x1 bn mark by 20‐‐

Although type1 companies are utilizing LBS in India, type2 has been the key source of revenue for the same

Drivers:

Drivers &

for the same

Challenges:

Low Awareness and Lack of InterestDearth of Accurate and Updated

Colossal Wireless Subscriber Base Introduction and Availability of NextDrivers &

ChallengesDearth of Accurate and Updated Geographic Information System (GIS) Privacy Concern

Introduction and Availability of Next Generation Cellular NetworksHigh Availability and Soaring Adoption of Mobile Device

Market Trends

LBS for x2 Indian Cities Soon by Localbeat

Bharti SoftBank Acquires x3% Stake in Y2CF Digital Media

Free Location Based POI App Launched by MapmyIndia

Ericsson Enhances Aircel’s Location Based Solution

Location Based Services

csso a ces ce s oca o ased So u o

Major Players

Tata Teleservice Ltd. CanvasM Technologies Ltd. CE Info Systems Pvt. Ltd.

2LOCATION BASED SERVICES IN INDIA 2012.PPT

Player Profile ONZE Technologies Pvt. Ltd. Polaris Wireless Inc. Y2CF Digital Media Pvt. Ltd.

• Introduction

•Market Overview

•Drivers & Challenges

•Market Opportunities•Market Opportunities

•Market Trends

d l• Location Based Services Players

•Consumer Insights

• Strategic Recommendations

•Appendix

3LOCATION BASED SERVICES IN INDIA 2012.PPTLOCATION BASED SERVICES IN INDIA 2012.PPT

pp

Introduction

•Location based services or LBS is an information service that uses the ability of the global positioning capability using IP addresses of mobile devices and computers to deliver area specific information Location based services is more relevant to mobile devices such as smartphones and Tablet PCs

Location Based Service (LBS) – Overview

Location based services is more relevant to mobile devices such as smartphones and Tablet PCs

• Such services can be query‐based and provide the user with requested information along with similar information which are related with the requested data and associated with the specific location

• LBS requires the following basic components, Software application or LBS solution by the service provider Content provider to supply the end user with geo‐specific informationMobile device with positioning component and mobile network to transmit data and requests for service

•Marketing evolution exhibit growing need for more targeted and personal outreach to the consumers, with the ability to define the relationships they have with brands and their products

Progression in Consumer EngagementProgression in Consumer Engagement

x1 x2 x3

• B1• B2

• C1• C2

• A1• A2


B2• B3

C2• C3

A2• A3

Although type1 companies are utilizing LBS in India, type2 has been the key source of revenue for the same

Market Overview – India

• Location based service market in India is yet to reach maturity but it is expected to break the INR x1 bn mark

Location Based Services ‐Market Size

INR bnZ%

Ymaturity but it is expected to break the INR x1 bn mark by 20‐‐

• Location1 in the country have some early adopters in the country while almost no LBS usage could be seen in location2 and location3

YX

WV

U

Low adoption in the country has been largely caused by cause1 and cause2, and cause3 of LBS

• Type3 is the major source of revenue for location based

20‐‐20‐‐20‐‐20‐‐20‐‐

Major Location Based Services ‐ India

• A1

• A2

services in India

• Type4 companies are also taking advantage of LBS with product1 and product2

• In the GPS oriented locational services segment, • A3

• A4

• A5

• A6

navigation and tracking held around x2% and x3% of the market share respectively

• Although LBS can be delivered via any electronic media, mobile remains the most potent and effective


• A7, p

medium of delivery LBS is served in India as a component of MVAS

Location Based Service Ecosystem

B1

BA

A1

Element1

Monetization Monetization

Element6 Element7

• G1 • H1•B1•B2

• A1• A2

Element2

Monetization MonetizationG1• G2• G3

H1• H2• H3

Element2• C1• C2• C3

Element3Location Based Services

• D1• D2• D3

Element4 Element9• E1• E2• E3

Element5

• I1• I2• I3


• F1• F2 Consumer

Drivers & Challenges – Summary

Challenges

Drivers

Colossal Wireless Subscriber Base

Introduction and Availability of Next

Low Awareness and Lack of Interest

Dearth of Accurate and Updated Geographic Information System (GIS)

Introduction and Availability of Next Generation Cellular Networks

High Availability and Soaring Adoption of Mobile Device

Privacy Concern

Increase in Disposable Income and Changing Consumer Behaviour


SWOT Analysis of LBS Market in India

Strengths

•Strength1

Weaknesses

•Weakness1•Strength1

•Strength2

•Strength3

•Strength4

•Weakness1

•Weakness2

•Weakness3

•Weakness4

SWOTAnalysis

Opportunities

•Opportunity1

Threats

•Threat1•Opportunity1

•Opportunity2

•Opportunity3

•Opportunity4

•Threat1

•Threat2

•Threat3

•Threat4

8LOCATION BASED SERVICES IN INDIA 2012.PPTNANOTECHNOLOGY MARKET IN INDIA 2012.PPT

SAMPLE Market Trends (‐/‐)

• T1• T2• T3

M1T3

• T4• T4• T5M2

• T6• T7• T8

M3

• T9• T10

T11M4


• T11

Porter’s Five Forces Analysis

Threat of New Entrants• A1• A2A3

Impact

• A3• A4

Impact

ImpactImpact

Competitive Rivalry• E1• E2• E3

Bargaining Power of Buyers• B1• B2• B3

Bargaining Power of Suppliers• D1• D2• D3

• E4 • B4• D4

Impact

SAMPLEThreat of Substitutes

• C1• C2• C3• C4


SAMPLE • C4

SAMPLE Public: Foreign Company – Company 1 (1/3)

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Products and Services

Ticker Symbol

Stock ExchangeIndia Head Office

Place

Key People


Category Products/Services

N D i tiC1 • S1

Name Designation

Person 1 D1

Person 2 D2

Person 3 D3



i i l S h K iFinancial Snapshot Key Ratios

Net Profit/LossTotal IncomeRevenueINR mn

ProfitINR bn

s

Particulars y‐o‐y change (2012‐11)

2011 2010 2009 2008

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

020‐‐

0

r

20‐‐20‐‐

q

20‐‐

p

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%

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

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%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‐‐

(% )

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

Key Financial Performance Indicators

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

Total Enterprise Value (INR mn) B EPS (INR)

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


EPS (INR) C PE Ratio (Absolute) D

Improved Decline

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


Key Business Segments Key Geographic Segments

k5k1 k4k3k2 k8k7k6

Key Information

20‐‐20‐‐20‐‐20‐‐ 20‐‐20‐‐20‐‐

Description Details

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

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

• C3 operates in India via its subsidiary, C4


SAMPLE Private: Domestic Company – Company 2 (1/3)

Company Information Offices and Centres – India

India Head Office

Tel No.

Fax No.Place


Website

Year of IncorporationIndia Head Office

Key People


N D i ti

Category Products/Services

Name Designation

Person 1 D1

Person 2 D2

Person 3 D3

C1 •S1


SAMPLE i i l S h K i

Private: Domestic Company – Company 2 (2/3)

Financial Snapshot Key Ratios

Profit / Loss

Total Income

W

Total IncomeINR mn

ProfitINR mn

Particulars y‐o‐y change (2012‐11)

2011 2010 2009 2008

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

V

U

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%

Financial Summary

020‐‐20‐‐20‐‐

U

20‐‐

T

0Return 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%

• 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‐‐

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

• 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‐‐

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



Improved Decline


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

SAMPLE Private: Domestic Company – Company 2 (3/3)

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

• 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, Partners and Investors 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,


Consumer Insights on Location Based Services in India (1/3)

Survey on Location Based Service Usage and Preference – Introduction and Methodology

Sample Size x1• Survey on LBS usage & preference was conducted on social media sites and technology forums

Sample SourcesSocial Media Websites and

Technology Forums

Survey Duration & Period

3 Weeks – July 2012

social media sites and technology forums

• Overall survey has been kept close‐ended to capture specific information according to requirements

• The survey has been conducted amongst a group of general consumers heading from major Indian cities

LBS A LBS A (P t )

Quantitative Representation Used

Percentage

general consumers heading from major Indian cities including New Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Kolkata, amongst others

R2

R1

LBS Awareness LBS Awareness (Percentage)

Q: Are you aware what Location based services are?

R3Response Option:

1) R1

2) R2


3) R3

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