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Mobile data (2G+3G) continues to grow in India in high double digit figures.

where broadband data (3G & LTE) is growing at an

average of 100%. (Source : 100+ NSN network deployments)

It grew by 59% in 2013 compared to 66% in 2012.

The

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.

Totalmobile data increased by 87% from Jan 2013 to Dec 2013. 3G continues to be theprime 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 thatseen in other parts of the world

The active 3Gsubscriber base grew by 50% y-o-y in 2013.

2G continues to stabilize in India.increase in 2G prices in the beginning of 2013 has greatly reduced the premium charged on 3G services,

Source: Nokia Solutions and Networks

An average

By the end of 2013, an average 3G

user consumed 532MB/month compared to a 2G user who

consumed 146MB/ month.

In certain metros and CAT A circles average

3G user is consuming 3.6 X more data thanan average 2G user.

dataconsumption per user is as high as 1GB/month,indicating huge demand and sustained interest in 3Gservices.

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

22014 ISSUE

Pan India Level Mobile Broadband

3G growth

in Indiasurpassesworldsaverage

532

146

434

115

Dec 12 Dec 130

600

400

300

200

100

MBpermonth 2G

3G


2G and 3G Mobile Data Usage PerActive User (MB per month)

1 All India 2G and 3G Data Payload (PB )

PBpermonth

50023%

27%

Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13

Growth rate fromJan'12 to Dec'12


0

10

20

30

40

50

60

196%

66%

92%

146%

59%

87%

2G 3G Total

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Metros3G now

accounts for half of mobile data in the metros,

Category A3G data grew by a record 185% y-o-y in these circles

CAT A now drives half of all 3G mobile data in the country.

Category B3G data payload in these circles surpassed that of metros in 2013.

Category C 3G payload increased by over

165% in 2013

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

data. 3G data payload doubled y-o-y in metros in 2013.

a direct result of

higher penetration of smartphones, reduced 2G-3G price differential

and good network coverage of 3G.

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

mobile data. -

a phenomenal increase, considering these circles had the highest 3G payload in 2012 among all other categories of

circles.

(39% of covered population) accounts for 28% of total mobile data. Despite a lower penetration of 3G

enabled devices vis--vis metros, 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.

(14% of covered population) accounts for 8% of total mobile data.

with 3G now accounting for 47% of the total data.

3

Mobile data trend by circle category

12G & 3G Data Payload (PB ) in Metro Circles


Half of countrys3G mobile data

from CAT A circles

PBpermonth

Dec 11 Dec 12

14

12

10

8

6

4

2

0

2G

3G

236%

40%20%

100%



12G & 3G Data Payload (PB ) in Category A Circles


PBpermonth

Dec 11 Dec 12

14

12

10

8

6

4

2

0

2G

3G

86%

234%

80%

185%

12G & 3G Data Payload (PB ) in CirclesCategory B


12G & 3G Data Payload (PB ) in CirclesCategory C


PBpermonth

Dec 11 Dec 12 Dec 12

14

12

10

8

6

4

2

0

2G 3G

123%

60%

58%

115%

PBpermonth

Dec 11

14

12

10

8

6

4

2

0

2G 3G

54%

2014 ISSUE

84%

165%224%

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

Dec 13 Dec 13

Dec 13 Dec 13

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42014 ISSUE

3G coverage by circle category

1An analysis of 3G coverage in India shows huge coverage gaps across categories of circle. Even in 'Top 50' cities 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

Existing 3G vs 2G gapExisting 3G sites

Additional small

cell deployments

15-20%

X


Metros

On an average, additional 15-20% 3G sites are requiredto provide same coverage as 2G.

- Of all the telecom circles, metro circles are best covered

geographically. Still, there are patches where 3G is handed over

to 2G.

Besides, due to huge indoors

data demand in these circles, small cells deployment can further

elevate 3G user experience.

1CAT A circles - Of the 'Top 50' cities in CAT A circles where3G is launched, additional 10-15% 3G sites are required toprovide the same coverage as 2G.

20-25% of existing 3G sites are required to1

cover the non-covered cities in 'Top 50' cities .

Moreover, there are still1

some cities in the 'Top 50' cities , which do not have 3G coverage.

On an average,

This gap is less(5-10%) in circles where an operator has a leadership position

(high subscriber base / ARPU circles).

1CAT B circles - Of the 'Top 50' cities where 3G is launched,additional 15-20% 3G sites are required to provide the same

1coverage as 2G. 'Top 50' cities20-25% of

existing 3G sites are required to cover the non-covered1cities in 'Top 50' cities .

These circles also have cities in

which do not have 3G coverage. On an average,

This gap is less (5-10%) in circles where

an operator has a leadership position (high subscriber base /

ARPU circles).

3G Coverage Gap in top 50 cities for aSample Category A Circle

3G vs 2G gap incurrent 3G covered

Top 50 citiesExisting 3G sites

X10-15% 20-25%

3G coverage gap innon-coveredTop 50 cities


3G Coverage Gap in top 50 cities for aSample Category B Circle



X15-20%

20-25%



3G Coverage Gap in top 50 cities for aSample Category C Circle



X25-30% 15%



CAT C Circles

(2G growth rate of 56% y-o-y and 3G growth rate of165% y-o-y) indicate a big demand forhigh quality mobile networks.

Of the 'Top 50'1cities where 3G is launched, additional 25-30% 3G sites are

required to provide the same coverage as 2G.

- 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

are encouraging and

Operators, therefore, need to

build both 2G and 3G networks in these circles.

Also, beyondthe 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

1Considering the trends of 2G data uptake in India, there is a need to expand 3G coverage beyond the 'Top 50' cities . While few

1circles in India have 3G beyond 'Top 50' cities , most circles are still limited to top 50 or less.

1: Top 50 cities are the ones that generate most 2G traff ic in each circle and therefore need most number of 2G sites. From network planning perspective, these

citiesare also the prime candidtes for building 3G coverage

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5

2

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 in itself. Over

he past two years, operators in India have also successfully bridged the gap between 2G and 3G bringing it to aevel that is suitable for mass-adoption.

t is now time to adjust the other two levers of & for mass scale adoption of 3G in India.

'

'product'

'prices'

'place' 'promotion'

Place

0%

30%

60%

90%

120%

0% 20% 40% 60% 80% 100%

3GP

enetration

International Benchmarks on Coverage and Penetration of 3G Services

Thailand

Indonesia

Malaysia Singapore

Hong Kong

Taiwan Australia 2 1

R = .887


3G Coverage

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

echnology 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

- Access to certain sites atUS$0.45/day

RESULT

- Increase in mobile datasubscribers from 0%to

20%in 2 years- Data revenue at 13% of

total

Packs:

Facebook + Twitter + Multiply

Facebook + Yahoo Mail + Gmail + Jobstreet

Facebook + YouTube

WHAT

- Free trials of

Facebook 0 -- Facebookwithout pictures

RESULT- 40%increase in data usage

WHAT

- Free Facebook 0&Twitter0campaigns for1 year

RESULT

- 30,000social mediapackages sold in 1

month post promotion- 600,000pcakages 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 ofUS$2

2014 ISSUE

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62014 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

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

aggregated data from multiple sources and does not use any personal data pertaining to specific subscribers.

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.

NSN is the market leader of wireless equipment and services in India

NSN is a global leader of Mobile Broadband

- 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

- 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

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