DoT proposes tax breaks for 3G winners

26 Aug 2009, 0044 hrs IST, Kalyan Parbat & Joji Thomas Philip, ET Bureau at http://economictimes.indiatimes.com/DoT-proposes-tax-breaks-for-3G-winners/articleshow/4934677.cms.

KOLKATA: The Department of Telecommunications (DoT) will ask the empowered group of ministers (EGoM) on 3G-spectrum auction, headed by Finance minister Pranab Mukherjee, to consider a proposal under which successful bidders of pan-India 3G spectrum can enjoy tax benefits applicable under section 80-1A of the Income Tax Act.

The DoT’s rationale is that the 3G mobile broadband should be treated as a distinct infrastructure service and not continuity of telecom operations, especially in case of 2G service providers pitching for a pan-India 3G licence. The DoT will place the proposal during the second meeting of the EGoM scheduled for Thursday.

The proposal for tax benefits applicable under section 80-1A of the Income Tax Act is part of an internal note prepared by DoT that will be circulated to EGoM members, a senior DoT official told ET.

Currently, only telecom companies that kicked off operations between April 1, 1995 and March 31, 2000 enjoy income tax breaks under section 80-1A. If the EGoM were to accept the DoT proposal, it would imply that 3G operations of telecom companies will enjoy income tax breaks on 100% of their profits for initial five years. In the next five years, these telcos will enjoy a 30% tax break on their profits.

The DoT note to the EGoM also adds that Indian Space Research Organisation (ISRO) is of the view that it cannot spare any further airwaves for WiMax services. As reported by ET earlier this month, ISRO chief G Madhavan Nair had said that the Department of Space (DoS) has already parted with 40 MHz of airwaves for WiMax services in the 2.5 GHz band.

He said any interference from the WiMax services offered in this band in the future could “severely affect the very sensitive satellite services in the adjacent band”. Mr Nair had also added the DoS is now left with only 150 MHz of airwaves in the 2.5 GHz band, the bare minimum requirement for satellite services.

The DoT note to the EGoM was prepared by its joint secretary (T) and consists of demands from the industry, especially those of CDMA-based operators, and includes the views of the DoS on WiMax spectrum.

The EGoM is slated to settle all outstanding issues associated with the auction of 3G airwaves, vital for high-end services such as high-speed internet and video conferencing on mobiles.

It will take a final call on the reserve price for 3G and WiMAX spectrums and decide on the number of players to be allowed to offer these high-end services in each circle.

It is also learnt that the EGoM may also debate whether the government at all has the right to urge successful bidders of 3G spectrum to shell out an extra Rs 1,600 crore-plus for a separate pan-India UAS licence, especially when DoT knows only too well that there is no extra 4.4 MHz 2G spectrum available to bundle with new licences.

“At a time when the DoT’s wireless planning cell is well aware that it won’t be able to meet future 2G spectrum obligation for new UASL licencees, why should they be asked to shell out an extra Rs 1,600 crore plus full complement of the licence fees. While nothing has been finalised yet, a successful bidder of 3G spectrum, alternately, may also be asked to shell out a lower sum for a pure vanilla UASL without the bundled spectrum,” said a government official familiar with the matter.

Indications are that a section of E-GoM members are loathe to the idea of fixing the number of slots for 3G services to a maximum five (including BSNL) per service area. “Considering that, there are as many 11 to 9 slots available in some circles like Orissa and Madhya Pradesh, the E-GoM is likely to debate the rationale of uniformly restricting the number of slots (per circle) for delivery of 3G services. There is a feeling in the finance ministry that such restriction can tantamount to a loss of potential revenue for the government,” said a DoT official close to the developments.

Telcos’ wait for airwaves gets longer

17 Jun 2009, 0702 hrs IST, Joji Thomas Philip & Sandeep Gurumurthi, ET Now

The wait for additional airwaves, key for mobile operators to expand their customer base, has just got longer, with the telecom ministry deciding to make any decision on this only after the upcoming auction of third-generation spectrum, according to a top official in the department of telecom (DoT).

Communications minister A Raja and Finance Minister Pranab Mukherjee met twice on Tuesday, but were unable to reach a consensus on key issues related to 3G auctions such as the base price for these radio frequencies as well as the number of players to be allowed to offer these high-end services.

“No consensus as of now on the base price. We discussed various suggestions — whether we should go for uniform base price or opt for differential pricing, according to circle, depending upon commercial viability of that area,” Mr Raja told reporters after his second meeting with Mr Mukherjee.

As a fallout, the telecom ministry has decided that it will take a call on all issues related with second-generation spectrum, the airwaves on which all mobile services are offered at present, including the methodology for future allocations, the pricing for this scarce resource and the usage charges for utilising these airwaves only after the upcoming auctions of third generation spectrum, the official said on condition of anonymity.

The ministries are divided over the base price for the 3G auctions with DoT proposing a reserve price of Rs 2,020 crore for pan-India 3G spectrum and the finance ministry wanting it to be doubled. DoT has said it is open to hiking the reserve price to Rs 3,540 crore as a compromise.

The two ministers said for the first time that they were willing to look at a differential pricing formula to arrive at a base price for 3G auctions, vital for high-end services such as video conferencing and high-speed internet on the mobiles.

Industry analysts, however, say using a new formula to arrive at differential pricing for each circle will be a time-consuming process that will further delay the 3G auctions.

The development implies that existing telcos will not get 2G spectrum till the issue is settled. Now, they will have to invest heavily on infrastructure to ensure that the quality of services do not deteriorate.

At present, all telecom services are offered on 2G spectrum and these airwaves have been given to telcos based on their subscriber numbers. Put simply, additional radio frequencies are dished out as telcos as they add more subscribers. Currently, India follows a controversial practice of allocating spectrum based on companies’ subscriber base, and is the only country in the world that follows this method.

There are two key factors that have led to the communications ministry deciding to stop all 2G allocations until the completion of 3G auctions.

First, the spectrum panel in its report submitted last month had said the country should adopt the internationally-accepted auction system for issuing additional 2G airwaves to telcos. This committee, consisting of academicians, industry representatives, government officers and industry representatives, had suggested that the 2G pricing be market-linked and be related to the auction price of 3G spectrum.

Second, the committee had also suggested that all telcos who hold radio frequencies beyond the 6.2 MHz mark be charged a one-time fee for all the extra radio frequencies they hold, while adding that this one-time fee be calculated based on the 3G auction price.

The communications ministry can act on these recommendations only after the 3G auctions take place.

The larger implication is that all telcos will have to shell out huge amounts, both for the excess 2G radio frequencies they hold as well as for all additional allocations in the future.

Additionally, DoT’s move to freeze all 2G allocations is also set to impact all telcos. For instance, India’s largest telco, Bharti Airtel, is awaiting additional spectrum allotment of 1 MHz each in five circles.

Reliance Communications, which has start-up spectrum in all 22 circles in the country, is now eligible for the next tranche in six circles as it has reached the prescribed subscriber numbers in these areas. Other telcos such as Vodafone Essar and Idea Cellular too are awaiting additional spectrum in several circles.

With no airwaves allotments over the next couple of months, these operators will have to spend significant amounts in setting up new cellsites. Analysts say for most operators, it is, therefore, a tradeoff between increased capex and allowing the quality of services to deteriorate on account of the spectrum crunch.

This is because it is technically possible to have increased number of subscribers using the same amount of radio frequencies, provided operators spend significant amounts in building more base stations and subscribing to the latest technological innovations.

It is not just the large players that are impacted by the latest policy logjam. The government’s move to put all allocations on hold will also pinch small players and new entrants like Datacom, Unitech Wireless

and Swan Telecom, who are awaiting start-up spectrum in many regions.

GSMA welcomes MoD decision on spectrum release

By Sharath Kumar on http://www.ciol.com on June 16, 2009

BANGALORE, INDIA: The GSM Association, a global trade group for mobile industry consisting of about 750 mobile operators,  has welcomed the Indian Defence Ministry’s move to release 45 MHz of wireless radio spectrum. The move will serve to accelerate the development of the Indian telecom market, and speed up India’s march towards mobile broadband for all its consumers, the trade group said.

The association has been demanding that the government must allocate the 2.1 GHz spectrum to drive the deployment of mobile broadband across India. The GSMA is of the view that the planning phase for the allocation of 2.6 GHz spectrum must also start now if HSPA is to evolve for the benefit of the Indian population.

In an email reply to CIOL, the association senior director Jaikishan Rajaraman stated that it is a well-known fact that congestion on 2G networks has been the bane of Indian operators for quite some time now, especially in the urban centres.

Quoting Bharti numbers, which serves 100 million customers with 11 MHz, Rajaraman said the availability of more 2G spectrum goes a long way towards addressing that critical need.

Also, it is significant that the majority of the newly available spectrum will be for 3G, especially in the immediate term.

“This creates a lot of investor confidence that the government is serious about its promise to allocate 3G spectrum via auction this year, and that 3G services will become the centerpiece of Indian telecoms in the coming years,” he opined.

“There is much to be optimistic about, and if the newly available spectrum bands are managed carefully according to international standards, it sets in place a system of continuity which will be welcome news to the Indian operators.”

Phased allocation

In Rajaraman’s view the phased approach is understandable given the complexities of the Indian military having to vacate a sizable chunk of spectrum. “However, we don’t believe this will slow down 3G service roll out to consumers in the short term.”

He added that this is because the simultaneous availability of 2G spectrum has allayed the concerns of operators and consumers alike that precious 3G spectrum will be used to offload congested 2G voice instead of being used for data services and mobile broadband.

As a long-term strategy, the government must keep in mind that with increased data usage and ever more subscribers using mobile broadband, there is a need to identify and set aside additional spectrum in advance for 3G services.

Delay losses

The GSM Association has recently demanded speeding up of the 3G auction. According to the recently published McKinsey report the delay has resulted in a $16 billion loss to the economy.

Quoting the recent McKinsey report the association has stated that once the licenses are issued and $20 billion invested over a period of five years, it can deliver $70 billion economic benefit in the same period.

See also: Indian defence loosens hold on spectrum at

http://telcobizpedia.wordpress.com/2009/06/08/india-defence-…ld-on-spectrum/

Airtel allowed to ‘unlock’ Apple’s iPhone

From www.ciol.com on June 16, 2009

MUMBAI, INDIA: According to Apple’s global support site, Bharti Airtel has been authorised to legally unlock the iconic 3G iPhone handsets in the country.

Thus enabling the Indian company to sell it to any user, not necessarily only an Airtel subscriber. The companys may also charge an additional fee for the unlocking, the website said.

This is in contrast to the existing practice of Apple in offering the iPhones — launched in two versions, 8 GB and 16 GB — bundled with the services of only two operators, Bharti Airtel and Vodafone-Essar.

In India, the 8 GB model costs around Rs 31,000, while the 16 GB is priced at Rs 36,000. Apple is also set to launch the latest version, iPhone 3GS, billed as the “fastest, most powerful iPhone yet”, on August 9.

Related stories at

• http://www.business-standard.com/india/news/airtel-allowed-to-%5Cunlock%5C-apple%5Cs-iphone/361195/

BSNL’s GSM project faces further delay

Thomas K Thomas on The Hindu Business Line on June 15, 2009

New Delhi, June 15 Finnish telecom equipment-maker Nokia Siemens Networks (NSN) has shot off a fresh letter to Bharat Sanchar Nigam Ltd’s two-member integrity panel alleging that it has been unfairly singled out of the bidding process for the Rs 30,000- crore GSM project.

NSN has alleged some of the other bidders had also not produced certificates required to be eligible for the tender.

The panel is investigating whether the tendering process was transparent or not. BSNL will not award the contracts till the investigations are complete.

Experience certificate

The Punjab and Haryana High Court had directed BSNL to give the reasons in writing. According to BSNL sources, NSN had not submitted an experience certificate for the North zone. However, NSN countered it on the ground that the certificate submitted for other zones was relevant for the North zone as well. NSN said in its letter that if BSNL had to disqualify its bid, then the PSU should have also rejected Ericsson’s bid since the latter had allegedly not given a separate certificate for 2G equipment, though BSNL had floated different tenders for 2G and 3G equipment.

BSNL had referred the dispute to an integrity panel approved by the Central Vigilance Commissioner after NSN took its case to the CVC seeking intervention. Two former Chief Election Commissioners — Mr T.S. Krishnamurthy and Mr B.B. Tandon — are the members on this panel. Ericsson and Huawei were short-listed by BSNL, which had rejected offers from NSN, Alcatel Lucent and ZTE.

2G allocation: DoT to seek more time

Thomas K Thomas in The Hindu Business Line on June 13, 2009

New Delhi, June 12 The Department of Telecom will seek more time from the telecom tribunal to decide on the policy for allocating 2G spectrum for mobile operators.

The deadline to decide on the policy is today, according to a judgment given by the Telecom Dispute Settlement Appellate Tribunal in its order of March 31, 2008.

The tribunal had asked the DoT to finalise the policy one month after the spectrum committee submits its report. Since the spectrum panel submitted its proposals on May 13, the DoT would have to take its final decision by June 13, according to the directions of the TDSAT. The DoT had, therefore, put on hold fresh allocation of spectrum till the policy was finalised.

However, the DoT has taken a view that it needed more time to review the recommendations of the committee, which mooted sweeping changes in the way spectrum is allocated.

Differences over policy

There are differences between the spectrum panel and the Communications Ministry on the policy. While the panel suggested giving spectrum through an open auction, the Telecom Ministry is in favour of continuing with the existing subscriber-linked criteria. “Since it is not possible to take a final decision with one month in view of wide ranging implications and report being reformist in nature we may request TDSAT to grant more time for Government decision on the report,” said a top DoT source.

The DoT also plans to consult the telecom regulator before it takes a final view on the allocation procedure. Earlier, top Ministry sources had told Business Line that the panel’s report may not be acceptable since it will disturb the level playing field in the mobile segment between new and old players.

DoT sources said it will decide on spectrum allocation criteria within six weeks. This means that operators such as Bharti Airtel and Reliance Communications, which have sought additional spectrum in some of the circles, will have to wait till then.

Ministry may dump spectrum panel’s proposal on 2G auction

Thomas K. Thomas on The Hindu Business Line on June 11, 2009

 New Delhi, June 10 The Communications Ministry is likely to reject the recommendations made by the Spectrum Committee to auction spectrum for GSM-based cellular services and favour maintaining status quo on the existing subscriber-based allocation criteria.

The Ministry is also not for capping start-up spectrum for new players at 4.4 Mhz, as proposed by the panel set up by the Department of Telecommunications (DoT). The panel, headed by the Additional Secretary, Mr Subodh Kumar, had suggested sweeping changes in the spectrum allocation policy including scrapping the existing subscriber base criteria.

Highly placed officials in the Ministry of Communications told Business Line, “While we are in favour of auctioning 3G and WiMax spectrum as soon as possible, radio frequency for 2G mobile service cannot be auctioned as it is illegal. It is unfair to ask new players to take part in an auction when some of the existing players have got spectrum based on the subscriber criteria,” the official said.

Pay for addition

However, the Ministry is likely to price additional spectrum beyond 6.2 Mhz derived from the fee paid by operators during the fourth cellular bidding process. “We are considering a formula whereby operators with more than 6.2 Mhz will have to pay a one-time fee derived from the amount paid by the fourth cellular operator for the 4.4 Mhz,” the official said.

If this formula is accepted then existing players such as Bharti Airtel and Vodafone will have to pay at least Rs 375 crore for each unit of spectrum beyond 6.2 Mhz.

The Ministry will take a final view on these proposals after consulting the telecom regulator. The spectrum panel had suggested freezing all allocation of spectrum at current levels. It had suggested that spectrum should be auctioned and existing players should pay a one-time fee based on the amount collected during the auction for third generation mobile services.

Related story at

• http://www.ciol.com/technology/networking/news-reports/dot-puts-2g-allocation-on-hold/11609120851/0/
• http://economictimes.indiatimes.com/DoT-puts-2G-allocation-on-hold/articleshow/4642382.cms

3G-WIMAX : Simplifying the future

On http://www.ciol.com by Sunny Sen on 02 Jun 2009

INDIA: Amongst the innumerable potentials 3G has, network manageability is perhaps the most important one. In the coming years, with increasing Internet usage, a huge explosion of data will happen over networks. The other major area where 3G would make a difference is in the billing process.

For infrastructure providers 3G will be a value-add during slowdown, as they would get to put in a lot of new developments. Layout of next generation networks that are 3G compatible will help in better manageability of services over the networks. Even service providers believe that 3G would make the entire mobility space much more accessible. The government, though, has to look at 3G with a much broader perspective. The broadband connection, as they have not reached the set target, will also benefit with 3G coming to India.

Looking at the manageability front, 3G will not only help in managing new services, but also fall in line with 2G and 2.5G services. It will give a whole new experience of network management at the back end. “As a 3G network is downward compatible, SPs would prefer to upgrade their existing networks so that with increased bandwidth they can offer high-bandwidth applications and services to their 3G customers, as well as serve more 2G and 2.5G customers on the improved network,” says Vish Iyer, vice president, service provider, Cisco India & SAARC.

3G Billing Process

In India there is a larger base for pre-paid customers compared to post-paid and so there is a greater need to simplify processes for the same. With 3G services there is a new advent in the next-generation voice, data and content services. And 3G billing services will give operators the opportunity to handle and retain the loyalty of pre-paid subscribers.

“Billing systems must cope with the dichotomy in business processes and the complexity in operations for accurately billing pre- and post-paid subscribers. This is a challenge that operators must address as it adds additional pressure to the bottom-line,” says Paresh Shah, vice president, information management, Convergys India. For post-paid customers it would help the operators to offer innovative services on demand like real time balance tracking and notifications. This will actually become the handiest tool to operators as they are working to limit credit exposure from post-paid subscribers and provide the necessary cross subscription discounts and invoice generation that subscribers demand.

“In 3G, services priced differently will be posted in one bill. Apart from that a number of new parameters for calculating charges can be used like number of packets, uploading and downloading data, QoS, location and content. This will give rise to complex methods of billing,” says Tamal Bardhan, marketing head, Usha Comm.

Easier Manageability

Not only on the billing side, but also on the network deployment side 3G is taking things forward. Solutions and services are getting simpler and handier. Enterprises and vendors have already started making futuristic deployments for the new business opportunities that 3G would bring in the network space. 3G’s most important attribute will definitely be better infrastructure management.

“3G will help service providers manage their existing infrastructure better and remain competitive in a mobile number portability (MNP) regime. It will also generate a more addressable market to the GSM service providers. They can go back to their existing customer base and provide them with enhanced data services” says Animesh Sahay, head, telecom business, India and SAARC, Juniper Networks.

GSM and VAS are two other areas where 3G would be having a great impact. We are seeing a growth of around 5 to 6 mn users per month in these areas. The bandwidth provided right now is nowhere close to what we would have once 3G services are started. This would essentially lead to easy trafficking of data over the networks.

3G will not only make its presence felt in cities and towns but also bring in better and faster networks to rural India. “Looking at the country’s broadband penetration through copper and coax; wireless technologies are becoming prominent. 3G and WiMax will ensure that remote and rural areas get networked. Thus 3G is a positive sign of the growth of the Indian telecom industry provided the government supports it equally,” says Jayesh H Kotak, vice president, product management, D-Link India.

In the years to come 3G would make a lot of difference in making business models more innovative. 3G and WiMax will help solve the problem of low broadband penetration in India to a great extent. It is high time the government realizes the need and use of 3G. In a fast growing economy these technologies have the power to change the development roadmap of the country.

Data Matters

The current 2G network limits the download speed to nothing more than 30 to 40 Kbps, though the ISPs claim to provide much more. Even after the use of Edge technology one gets 384 Kbps of uplink and 171 Kbps of downlink. 3G is expected to sort out these problems. For enterprises 3G would bring in a lot of scalability and performance based application cutting short time constraints. 3G networks will be 2G and 2.5G compatible as well. Consolidation would bring down the costs for the company.

Apart from the bandwidth, 3G would also enable compressed data over the network. This would in turn maximize and increase WAN link by reducing the frame size, thereby allowing more data to be transmitted over the link. Though at this point we do not need much data compressibility as the transmission will be through fiber.

3G allows for transferring voice in networks much more efficiently than 2G and enables efficient VoIP in the future. This leads to decreased cost per bit and voice minute for the operator, and eventually for consumers. “Today’s networks are many times more efficient than early 3G networks and will evolve to LTE which is again three times more efficient than current 3G networks,” says Randep Raina, head, 3G India, Nokia Siemens Networks.

Looking Ahead

Will things stop only with the infrastructure developments of networks in Delhi? BSNL and MTNL are very differently placed in comparison to other private players. It is not yet known when 3G auctions will happen and which companies will be in the spectrum run. With a huge amount of investment only to acquire license, a lot of other costs would be involved when it comes to network building and implementation.

But the high costs will lead to new services making its way into the market, especially the urban areas. “Unlike 2G, in 3G one has to come up with very innovative applications and tariff plans. If operators are able to come up with new services there surely is a lot of money to be made,” says Subhendu Mohanty, country head, home & networks, mobility business, Motorola.

It perhaps goes without saying that vendors are looking at 3G because it is one of the areas that would bring them enough revenues. For instance, in case of Motorola their deployments for MTNL in Delhi alone are close to Rs 300 crore.

Undoubtedly, 3G will definitely bring in manageability. With obsolete billing processes and difficult round ups it is an urgent need for the communications industry to head towards 3G. For quite some time, 3G has been a vision and a topic of discussion, but unfortunately, implementation is nowhere in sight.

DoT, Defence Ministry bury the hatchet on spectrum vacation

Thomas K. Thomas on The Hindu Business Line on 23 May, 2009

New Delhi, May 22
The Department of Telecom and the Ministry of Defence have finally signed the memorandum of understanding for vacating spectrum after both sides softened their stance on the various demands put up by the armed forces.

The defence forces have given up their demand that DoT should provide a 10-year annual maintenance of the optical fibre cable (OFC) network being rolled out for the three divisions of the armed forces. They have also agreed not to include spectrum already allocated to new players as part of the radio waves, which the armed forces are supposed to vacate once the OFC is rolled out.

On its part, DoT has agreed to waive the spectrum usage charge for the armed forces. In addition, DoT has also agreed partially to the defence forces’ demands to set up a defence band for exclusive use by the armed forces. But instead of giving an exclusive band across the country DoT will create a defence band along 100 km of the international border.

The agreement paves the way for introduction of third generation mobile services as DoT will get more spectrum for auction. A high-level monitoring committee will be appointed jointly by the Ministries of Communications and Defence to put the agreement into operation.

According to the MoU signed by the two sides, the defence will release 25 Mhz of 3G spectrum and 20 Mhz of 2G spectrum. Of this it will immediately release 10 Mhz of spectrum for 3G spectrum and 5 Mhz for existing 2G cellular services. It will release another 5 Mhz for 3G services once DoT places the supply order for setting up an OFC-based network for the Air Force. DoT will get 5 Mhz more of 3G spectrum and 5 Mhz of 2G spectrum on supply of the equipment. Once the equipment is installed, the armed forces will give up 5 Mhz each in 3G and 2G bands. Another 5 Mhz of 2G spectrum will be given on commissioning of the OFC network.

In return, DoT has agreed to setting up an exclusive defence band and Defence Interest Zone where spectrum will be reserved only for use by the armed forces. DoT will lay 40,000 route kilometres of OFC connecting 219 army stations, 33 navy stations and 162 points for the air force.

The cost of the project is estimated to be Rs 10,000 crore for which the Communications Ministry will seek the approval of the Cabinet. DoT had earlier refused to sign the MoU on grounds that it could not accept the conditions set by the armed forces for releasing spectrum.

Qualcomm’s mantra: Always-on wireless access at low cost

On www.business-standard/india by Shyamal Majumdar / Mumbai May 21, 2009, 0:03 IST

Kanwalinder Singh, president, India and South Asia, of the world’s largest CDMA (Code division multiple access) chipset maker, Qualcomm, has reasons to feel happy. Despite late entry into Indian market, CDMA 2000 has over 92 million subscribers and enjoys a quarter of the market share. In recent months, CDMA 2000 has averaged subscriber net additions of over 2.7 million per month.

But Singh says the time has come to go beyond voice. “Indian mobile companies have been obsessed with the voice subscription game. It’s time to look at value-added services that can significantly transform society,” Singh says, adding 3G wireless broadband is an opportunity coming their way to make high-speed wireless internet access more widely available and affordable. According to the ITU (International Telecommunication Union), for every one per cent increase, internet connectivity has twice the impact of voice on GDP growth.

Singh says globally 2G (GSM) is rapidly transitioning to 3G and Qualcomm will drive a similar trend in India and bring in “affordable tiered solution” to stimulate mass market adoptions. Reasons: 3G feature phones will bring better voice clarity and multimedia experience to users, opening new services revenue streams for wireless operators; 3G USB modems, dongles and data cards will bring ‘always on’ wireless broadband connectivity to laptops and desktops that are already experiencing accelerated growth; and affordable 3G smart phones will bring in a new dimension to enterprise connectivity.

Affordability is the key word here. Singh says computing devices are getting smaller (last year, 2 million laptops were sold in India compared to 3 million smart phones) and the San Diego-based company is ready with technologies that can change people’s lives, particularly in emerging markets like India. For example, Qualcomm-powered wireless internet devices can remove the need to carry a mobile phone, if the computing device is small enough.

For example, the Kayak platform developed by the company Kayak, is essentially a portable computing device that leverages 3G chipsets and can also be connected to the internet even in small villages where connectivity is difficult to access or is unaffordable. Kayak fills the niche that exists between desktop PCs, which normally require landlines or separate accessories for connectivity, and internet-capable wireless devices.

Qualcomm will not make the Kayak PCs, but will offer the software specifications and reference design to device manufacturers. Devices based on the Kayak design will offer a full-featured Web 2.0-capable browser to perform at desktop resolutions; access via the browser to Web 2.0 productivity applications; support for both television sets and computer monitors to be used as displays and/or for a built-in display; compatibility with a standard keyboard and mouse for input; and music player and/or a 3D gaming console functionality. While a laptop usually measures 15 inches or more, that on Qualcomm’s snapdragon platform would be mostly in the range of nine to 12 inches. There will be pocket devices also.

One of the major advantages will be that these devices will be low-powered. The small computing devices when embedded with a snapdragon chipset platform can make them run even on mobile phone batteries. In a country like India where power supply in villages has been a problem, this can be a game-changer, says Singh.

A proud Singh says the Kayak platform was developed by over 1,000 engineers based in the company’s Research & Development (R &D) centres in Bangalore and Hyderabad. Web-based applications open up new possibilities for people in emerging markets for whom packaged software can be expensive, says Singh, adding that the prices of 3G entry-level handsets will come down sharply.

Of course, Qualcomm isn’t alone in looking at launching such low-cost internet-based devices in India. Intel, the world’s largest chip-maker, is also introducing net-enabled devices based on atom processors, starting from as low as Rs 5,000. But Qualcomm, which was established in July 1985, has an advantage because of its technology-richness. The company, which invests over a fifth of its global revenues in R&D efforts, holds 8,900 US patents and pending patent applications for CDMA and related technologies.

Plan to divest 10% in BSNL may be revived

From www.businesss-standard.com/India by Surajeet Das Gupta / New Delhi May 21, 2009, 0:28 IST

The department of telecommunications (DoT) plans to revive the issue of disinvesting government shares in Bharat Sanchar Nigam Ltd (BSNL) once a new minister takes charge.

The BSNL board had last year approved a plan under which the government would divest 10 per cent of its shares to the public. But opposition from the unions backed by the Left parties — which supported the United Progressive Alliance in the last Parliament — had stalled the process. That opposition has abated, now that the Left is no longer a factor in the current ruling alliance.

“We expect the new government to take up the issue in the next one or two months,” said a senior DoT official.

The government had estimated that a 10 per cent stake sale to the public would help it garner over Rs 10,000 crore, based on a Rs 1,00,000 crore valuation for the company. The original valuation, however, was made when the Bombay Stock Exchange’s Sensitive Index was near 20,000 level. Given that the Sensex is at now 14,000 levels, the government can expect to earn far less from a 10 per cent stake. (The ministry is also hoping to garner around Rs 30,000 crore from the auction of five licences for 3G, or third-generation, telecom services.)

In debates in Parliament, IT and Telecommunications Minister A Raja had made it clear that divestment was a high priority to allow BSNL navratna status, meaning it would acquire a greater degree of autonomy and establish the brand.

The proposal was strongly opposed by the Joint Forum of BSNL Unions and Associations, which threatened to go on strike. The unions also rejected overtures from the management in the form of an employee stock option (Esop) scheme, offering BSNL’s 350,000 employees 500 shares each at Rs 10 a share.

Later, Centre for Indian Trade Unions (CITU) President and CPI(M) Politburo Member M K Pandhe wrote to K Karunanidhi, Tamil Nadu chief minister and head of the UPA ally Dravida Munnettra Kazhagam (DMK), not to allow the divestment to go through. Telecom minister Raja was from the DMK.

The Left had also complained that the finance ministry, especially under P Chidambaram, was pushing the divestment to balance the fiscal deficit.

BSNL has around 60 million subscribers, and clocked revenues of over Rs 38,000 crore in 2007-08. It has, however, been facing tough competition and losing market share to private sector rivals, especially in the mobile space, which accounts for 75 per cent of telecom subscriptions in India. BSNL was recently overtaken as India’s largest telecom player by privately-owned Bharti, which recently crossed the 100-million subscriber mark.BSNL, meanwhile, is close to finalising a contract for over 93 million GSM lines across the country, which will include both 2G and 3G networks in what is the largest order of its kind in the world.

Alcatel-Lucent to deliver first IP-based NGN to MTNL

From www.ciol.com on 19 May 2009.
PARIS, FRANCE: Alcatel-Lucent, a next-generation network (NGN) solution provider, and Mahanagar Telephone Nigam Ltd. (MTNL) announced the commercial launch of the operator’s first IP based mobile next generation network (NGN) to offer enhanced services to residential and enterprise customers in Mumbai. The mobile NGN solution, provided by Alcatel-Lucent, is 3G and IMS ready and will provide MTNL with substantial operator benefits in network optimization, bandwidth savings and reduced space and power requirements.

The deployment of Alcatel-Lucent’s mobile NGN solution for MTNL supports the operator’s leadership in the competitive market of Mumbai. It leverages common network hardware and software assets to provide MTNL with the network scalability and agility to migrate from a 2G to a 3G network and to IMS as the market needs justify it. The mobile NGN solution will significantly decrease MTNL’s time-to-market for advanced mobile services.

R S P Sinha, chairman and managing director, MTNL, said: “MTNL’s endeavours are focused on offering the latest technology and services to its customers. MTNL has been instrumental in providing the most competitive quality services to its customers and also keeping the market prices at affordable levels even for the common man. 3G services are going to revolutionalize the way we communicate and entertain ourselves.”

Alcatel-Lucent’s mobile NGN solution is based on a secure, distributed architecture that enables MTNL to flexibly address traffic growth, reduce operation costs and simplify network maintenance.

Vivek Mohan, managing director, Alcatel-Lucent India, said: “This win demonstrates the value of the long-term customer relationship and commitment of Alcatel-Lucent in India. Our undisputed technology leadership, innovation, and global knowledge and experience in telecommunications allows us to deliver a solution that positions our customers well to meet the challenge of increasing competition both today and tomorrow.”

The mobile NGN solution deployment is a part of a multi year agreement under which Alcatel-Lucent is providing an end-to-end GSM/EDGE solution to MTNL. Services offered under the agreement include project management, consulting and design, installation and deployment, network operations, maintenance and integration and testing. Alcatel-Lucent has supplied more than 50 percent of MTNL’s TDM switches and more than 2 million GSM linesto MTNL previously.

Excerpt from interview with Neelam Dhawan, Managing Director, Hewlett-Packard India

On www.business-standard.com/india on 19 May 2009

What about telecom? It appears that IBM is a clear leader in this space…

When Indian telecom companies went for outsourcing services, the deals went to IBM. It has a model which we could never match but we have products in both hardware and software that are used internally for billing purposes. These are solutions that HP has continued to sell in the country and that’s helping us grow. Now that the government has announced licences for five new operators, we are very excited. They will need infrastructure. And we have developed new ways of designing data centres with cooling and power efficiency. Take, for instance, our dynamic smart cooling solutions. Data centres must have air-conditioning which costs a bomb. Dynamic cooling reduces costs by sensing hot spots and cooling them rather than cooling the entire data centre. This reduces air-conditioning costs by 40-45 per cent. Some telecom companies have already given us orders which we executed in December, March and April.

But you appear to have woken up late when it comes to low-cost netbooks and the mobile space which is booming…

To think that PCs will be the device that will be used to access information is erroneous. Mobile is surely the way to go. However, our focus is not to make a mobile device. Rather, our focus is on how the mobile device can become the centre of computing. Whether you want to access your bank or make a secure payment, security is a big issue. Consider a streaming video-on-demand or direct-to-home (DTH) broadcast or any Visa/Mastercard transaction — all these applications link back to storage or server applications. The question, however, is how do you enable all this in a secure environment? So our focus is on secure transactions using the phone.

Every time you see a reality show where you need to SMS a number, there is a server doing the backend work — and 90 per cent of those servers are from HP. I have 130 organisations that do value-added services for telecom service providers using our product.I must now come to netbooks.

Let me tell you that we launched netbooks in February. A little late though, we launched consumer and commercial netbooks. We also got the consumer netbooks designed and offered them in different colours. They also have a slot for a 3G simcard. Netbooks are doing well for us. February was a record month for us.

DoT panel limits quantum of spectrum to 25% in a circle

At www.thehindubusinessline.com on Monday, May 18, 2009

New Delhi, May 17: The committee set up by the Department of Telecom to review the spectrum allocation policy has suggested that no operator should be allowed to own more than 25 per cent of the total available radio frequency in a circle.

“A Unified Access Service licence holder cannot have spectrum holding of more than 25 per cent of the total assigned spectrum in the 2G spectrum bands in each licences service area, irrespective of mix technologies deployed.”

“Spectrum may be transferred/merged in any quantity any time after assignment subject to the condition that the merged entity cannot have spectrum holding of more than 25 per cent of the total assigned spectrum in the 2G bands in each circle,” the committee said in its report submitted to the Government last week.

Prevent hoarding
This will make merger and acquisition in the telecom sector even tougher. DoT officials said the move is aimed at preventing hoarding of spectrum by a single operator. The committee has also proposed to impose a spectrum transfer fee of Rs 550 crore for pan-India licence.

Initial cap
The committee has also capped the initial start-up spectrum to new players at 4.4 Mhz for GSM operators and at 2.5 Mhz for the CDMA operators. All fresh allocation after that will be done through auction. This will have an impact on the new players that got their licences in 2008. Operators, including Reliance Communication, Swan and Shyam Sistema, may not get any additional spectrum based on subscriber-linked criteria.