Thank you! Sanjoy, and a very good morning to all of you. I am delighted that the India Today Conclave this morning is starting with not political speeches but a very strong leadership speech by Mukesh and the second session being on technology trends and what does it mean hold for globalization.
Very clearly, this is a space in which I have been personally working in for some years now. But I can say with a great deal of certainty and authority that there has been nothing more profound as communications on the face of this earth. In particular, the last six or seven years have completely transformed the way the world works and I like to share with you from an entrepreneurial point of view, how one is managing to stay ahead and in some cases in step with the changes in technology that are taking place and changing the face of this earth and truly contributing towards globalization.
And to my mind, before I begin, I must also say that what we are seeing today is just the basic platform on what a very new world order is going to emerge in the coming ten or fifteen years. Whatever was the wow factor of today is fast and very fast turning into a “given” of tomorrow. This is a very familiar picture that you see - multitasking and especially if you look at our children holding several devices in their hands, doing multiple things all the time. Telecommunications – be it basic voice or data services or everybody engaged with the media in terms of entertainment and more importantly now the video on demand type of services and IT and internet which is becoming so pervasive that there is no life without it today.
In fact, I must share with you; where the future generations are moving on to, we all recall with great fondness our first telephone, our early tele-printers or telex machines, the fax machine and coming on to see the basics computers and evolving them in to wonderful hand held devices to a “sign-off” that leads no communication today.
I was in New York with my daughter, she met Arun Sarin and his daughter and they met the first time and they truly liked meeting each other and wanted to stay in touch. When they left, all they did was handshake and they left. And when I asked a question to my daughter, you haven't even exchanged email ID or a phone number. She said, dad we don't need to, I will meet with her on the Facebook and that is the new world order.
I sent a mail to my son the other day it bounced back. I called him, I said, “What is going on here”. He said “Dad, I have changed my email ID”. I said then how are you going to communicate with all your friends; he said I will find them on Facebook.
And that is the reality of today that the communication is changing so fast, then even people like us who are deep in to the technology world are finding, every morning we wake up, the world has moved. In fact, based on that, I have decided, of course without giving my identity, to be on the Facebook myself. Because I really need to know that what is going on in the mind of the youngsters. Because it’s really a new world out there.
Let me briefly also touch upon some of the trends in our industry. Mobile telecom is really all pervasive - three and half billion around the globe today. That means one out of more than two is now having a mobile phone. And the way it is rising we will get to the five billion and eventually other than the infirm or very young, everybody will have a mobile phone in their hand. International voice minutes are now at 220 billion. And these are only international global minutes. I have only captured the global minutes because there is no date point to pick up the other minutes. But to give you an idea at airtel alone we clock a billion minutes a day, that's 365 billion minutes just with one company and growing.
SMSes are now pushing the envelope, must have by now having crossed two trillion marks. That is the power of SMS. in fact, SMSes have now far exceeded in terms of traffic, the general voice traffic. And as I have said earlier the center of gravity here is shifting to Asia. Most of this coming out of Asia, Philippines, India and many other parts of Asia. US is only waking up to SMS or these short data services only now.
Email users from half a billion - now touching 1.2 billion. Social networking users I spoke about Facebook and there are many other social networking sites mushrooming all the time. Internet users are moving all the time. And I think more interesting is also now the cable TV, the IPTV and the satellite TV. This is where the boundaries are blurring now. The cable television companies are now providing telephony. Most of the cable network operators in the US are now providing high quality telephony including broadband, but more importantly the telecom companies are striking back as well. The standard old poor man's telephone, the switched copper pair is now carrying IPTV. India will be soon waking up to IPTV in the coming week itself. Where we can actually do a massive amount of interactive TV viewing and then of course the DTH which is coming up in shape now even in India - The satellite television. There are many players in the industries I have just held out only some of those who are playing in the industry but the fact is these are three different buckets in which the communication needs of the world are being met. Both for transactional issues, viewing pleasure more importantly self actualization of blogging or sharing your photos, transactions, mobile banking all of them are being done now in these three buckets and that is really reduced the distance of the world. This has truly made the world flat. Yes there are disparities as Mukesh mentioned but this is truly now leveling out the world.
I must also share with you what's happening in the area of technology trends. The four fundamental blocks of technology the bandwidth providers that is principally telecom companies that is the Guilder’s law that you are seeing here. We are doubling the bandwidth provision every 18 months. The massive amount of doses that are coming up on to the networks in terms of bandwidth are doubling every 18 months without which all these applications and the community of developers would not be able to go to the next level. Equally the processing which is very-very important the Moore’s law, is doubling the processing capacity of 18 months and that is keeping in tandem, in touch with both the sides. Therefore the more processing capacity needs more capacity to be delivered across the globe. Thankfully the capacity of the bandwidth is also moving up in tandem but what is even more brilliant is the storage space which is becoming extremely important now, is doubling every 13 month. The devices are becoming very savvy, very smart to a point where they will start worrying a lot of telecom and technology companies because they will start losing control over the services because the speeds are high, the bandwidth is available. You can now put in a small little chip which will carry Giga-Hertz of capacity into them which will enable the third parties to come and deliver content and services.
I think more importantly what you are going to now see is massive amount of Machine to Machine interface. A mobile phones, new ones most of them are now carrying a tiny little chip which is a GPS and that is talking to a satellite, doing a lot of functions now. Fleet Management, track-movement is already happening across the globe and these devices are going to be invisible to human eye and this is where the next wave of technological development will take place. Whether it is going and reading electricity meters (physically to remote now), doing processing off-shore and more importantly now having the possibilities of doing online transmission of languages. A lot of stuff is going on across the world. What is this doing to affordability, which is extremely important if the whole globe is going to be connected? We have already seen some dramatic shifts here in India. Take the network sites when the capacity doubles and possibly the cost halves or more, you can generate affordability levels that world has never seen before.
The voice call rates in India and thanks to some measures to my friend when he came with first flush of tariffs which shocked the nation including us. But the fact is when a shock therapy comes in, yeah, the smart entrepreneurs re-engineer and find a way to live and today India is delivering telecom services at less than two cents. Actually, it's getting very very close to one and half cents now and this is not just voice. Take in the entire revenue of airtel divide by the number of minutes that's what you get. 63 paisa net realization per rate, this throws in roaming, music, transactions, monthly rental everything that you do on the network gets to 63 paise a minute, incoming calls of course give only 30 paisa a minute. So to that extent I would say this is done what nobody could have imagined in the world based on technological evolutions.
Today technology allows you to go deeper and deeper into the country to those customers who we could have never imagined would be on the telecom network ever in their life time. Today people who are coming on to the networks are people who earn daily wages of 60, 80, 100 rupees a day and they are making the lives and getting connected to the globe through those services. Storage, processing devices all coming down, one important point here would be if you look at the camera, the images(pixels) from a dollar to two thousand, you getting to 25,000 and where we will this go in the next 5 years you can imagine you can just add a few more digits to this and that is what is going to do. And when it comes to that level then obviously your mobile phone becomes your video camera, your camera and a full scale computer. Just a couple of data points, the world is now producing more transistors than grains of rice and more importantly at a fraction of a price, of a grain of rice. The average cost of Central Processing Unit (CPU) is about 50 cents per hour now. Those of the levels we are achieving and again, if you project this out in 10 years you know where the industry trends are moving.
These are mind boggling shifts in the world technological trends. Let us look at some of the applications I mentioned some of these social networking sites, I spoke about the blogs and the voice services but I think some of the stuff that is coming into man-machine interfaces is very interesting. Speech recognition is becoming very-very good. Today the American troops in Iraq are constantly conversing with their local Iraqi counterparts. Online real time he speaks in Iraqi, he speaks back in English, this is happening now.
Early days - it is being used in more defence application give it two to three years a Chinese will converse with anybody in India and he will blabber in Hindi you will get a response from him back in Hindi although he will be speaking in Chinese. That is going to happen no more than two to three years.
What will this do to the world? Will this not make the globe as one? My God! look at the power of what is happening with this technology. That application in Iraq which is a military application today will become a commercial application in the next three years. And yes it poses its own challenges. Suddenly a country like China will have less difficulty dealing with the globe because they don't know English. They don't need to. And of course, I must mention about the Western Union initiative that the mobile industry is doing now. It is not only Western Union it is linking with the entire financial community. Today a 50 pound transfer from Southall into a village in Punjab costs you about 8 to 10 pounds if you wanted on the same day. Though an SMS you can do it for less than one pence. It has happened, it’s happening we are just waiting for the RBI approvals. Migrant labourers from across the country, let us talk about my own experiences. Bihar sends hundreds of thousands of people into Punjab during the cropping session. It is going to happen in three weeks from now. There will be train loads, actually more than train loads because people sit on the roof tops on the trains during these times, will all be moving towards Punjab and Haryana to harvest the wheat.
Every day they send runners back home with envelopes, everybody pools in envelopes 50 rupees, 200 rupees, 500 rupees somebody 6, somebody is dying, somebody is getting married, and somebody has celebrations these moneys need to go back into their homes. With one SMS at 60 paisa you can transfer 50 rupees, 20 rupees, 100 rupees and instant access of cash on the other side. My company alone airtel has 550,000 outlets, can any bank branch even imagine to come too even 55 thousand, will be almost an impossibility. You can't even put ATMs of that order of magnitude but you don't need to. All of these 555,000 shops collect cash everyday to top up pre-paid vouchers and this money is moving into these shops and then they have to move that money into the banks.
All they need to do is, start giving it out to those people who are receiving the transfers and this is not into the future. This is happening, Philippines has kicked off, South Africa has kicked off in fact I am the global sponsor on the GSM board but India we have had some difficulties because we don't know we will be transgressing into some financial areas and we don't want to have another regulator on top of telecom to have RBI looking at us and governing us. So we are trying to figure this out, I would say we will miss this season but before the next season of cropping comes up this technology will be alive and kicking. This is also doing something magical to countries like India; it is truly flattening and leveling out a society. Of course, needs are very different. But the fact is the affordability piece on telecommunication is now allowing everybody to be connected and once somebody holds a phone in a village he feels part of the society, he feels connected to the society and that reduces the chances of him going across the line into doing things which are not beneficial to the society.
I started as a telecom company but I am certainly, it appears not going to end up being a telecom company. We are no more telcos, we are actually becoming lifestyle providers. One telephone number or one telephone device is going to do everything for you. Some people think it is scary, it puts in too much controls into the hands of one set of a service providers, my view is no because as speeds increase in the telecom networks as bandwidth goes up telecom companies actually start to lose control because you can access services and service providers can start accessing you with whatever they need. From simple voice and data services we have now moved to providing music, images, and transactions as I mentioned financial transactions this will be doing everything that a person needs.
I cannot imagine that you will ever need to have credit cards, cash in the future. I don't imagine you will have a separate camera or a separate computer. It will all be rolled into one. And of course the final piece would be biometrics - Mukesh spoke about biometrics, this will be your biometrics tool. This will be your identification because the level of encryption that we can put into this is again one of the highest you can ever imagine. At this stage let me also share with you, a little clip because it will show you what the customers are expecting out of convergence how these three pieces are going to come into one form and make it simple for a customer so that when he is at home, on the big screen or on his laptop or his mobile he is seeing the seamless benefits of technology and does not have to struggle to move between five or ten remotes or five or ten devices. So, if you can have this short little presentation played up, please.
This is really going to be your future that you will seamlessly move from one screen to another as you move around the globe and it will not matter where you are whether you are in the US or you are in a village in India you will have all these services seamlessly provided to you from one device to another. Therefore, we are going to become from telecom companies to deep provision of services to the society. I wouldn't go through all this, but I would like to mention one thing ie the Google maps. Today, as you know Google has developed tremendous capabilities on maps, many of you may have used Google earth and Google maps. Now on your little device, the phone, you can download this I have one on my little machine here, which tells me where I am, which can direct me where I am, in the near future is going to tell me all my friends in a radius of one kilometer, more importantly tell me my commercial needs of buying a piece of textile or buying a pizza and it will guide me to that. This is all ready to go now.
Some people say this is going to impinge on privacy. Now, to some extent the answer is, yes, but you can chose who you want to be exposed to. So you can give a buddy list to this site and saying these 15 people I always, I am comfortable with for them to know where I am and they will be seeing each other on the screen which part of the city, country or world you are. It depends on how deep you want to go into this. The fact that is that on my machine today when I have this Google maps tracking me across the city and giving me almost a pinpoint. It is a pretty surprising element here because my phone does not carry a GPS. This is Google map on its own talking to my phone pulling cell ID and playing it back to me.
When I asked my switch managers are we open to Google on this, they say no. So the Google have actually bypassed the network. Now, we can scramble, we can scramble our sites and start changing IDs that can be done to block that this does not happen. But the fact is that it needs to happen. But of course at the consent of a customer. He must therefore choose we wants to be open to. But be prepared you are going to be living in a very different society because you will get exposed to these third party powerful community of developers who are riding on this massive investments of billions of dollars in networks which are making them faster and speedier. This is also going to be catering to all segments, it is not for elite, it is not for rural, it is consumers as I mentioned to you both metro, rural is going to serve homes, is going to serve small and medium enterprises.
In fact my view is, in India the small & medium enterprises would be the single largest beneficiary of the segment 0f what is happening in the technological world. They can't hire people, they can't have consultant, they can't have third party outsourcing for them everything. They will be the biggest beneficiary and I am very excited about this possibility and developing along with some third party like IBM and others, applications for SMB and of course large enterprises will be and I am sure we will be talking a lot more about that what is happening there again some magical things are developing in the enterprise space.
Challenges. I think, we saw Mukesh talking about inclusive growth in the country as the challenge remains you have to continue to reach out. I can put out my towers we do that on a daily basis, hundreds of them come across the country. No electricity, no power, no roads to reach. We have mules carrying our sites on to Leh. Those sites run on generators 24/7. It is hard to reach the energy or the petrol or kerosene for them during difficult months. But you have to have the mules running to keep the sites on. The infrastructure is a problem, telecom is not.
But the fact is we have 68% of the population cover in India today, this needs to get to 90% in next 12 months. Tough task but will be done. Will we get to 100% perhaps to 95%? Five per cent of the country's population may be difficult to cover who may be in Nicobar or who may be in some remote places where other than satellite communication you may not be able to serve them. We need to be relevant to the people. We do not need to do all that you have seen here this mumbo-jumbo for ordinary customers. Applications must be simple to use, applications must be simple to understand and the good news is that is where the technology is moving. It is going to make our Grandmoms press a button and get services. That is where the services is moving towards and of course the affordability factor will always be important.
Let me give you some of my insights in closing. In the technology area the network storage processing devices will get faster, deeper, and broader all the time. This is not going to stop. We will aggregate and simplify as I said. We will need to put everything together, we are developing an SDP which is ready to launched, actually one of the first ones in the world to provide all community of developers to come plug and provide services to all our 100 million customers. Because you can't manage them otherwise.
Business models will be different in tomorrow's world. You will cooperate and compete. Many of the people I today cooperate with, IBM and others actually compete with me in the market place and enterprise services. Customers will enjoy, continue to enjoy and can expect affordable and very-very rich services going into the futures. World will truly become flat. It has taken 70 years to come here. The telephony in 1876, the television in 1926, computers in late 40s, all this is going to be crushed in next ten years- into providing all of these through seamless single technology platforms. So, the customers can enjoy all the services at a click of a button. I believe that we are living in times which are truly exciting.