Indiagames COO Samir Bangara On Games On Demand, Off-Deck Billing, MGs And More

From http://www.medianama.com/2009/08/223-indiagames-coo-samir-bangara-on-games-on-demand-off-deck-billing-mgs-and-more/ on Aug 25, 2009

By Nikhil Pahwa

Indian Mobile gaming company Indiagames, a subsidiary of BSE listed UTV Software, reported a turnover of Rs. 46.4 crores and a profit-after-tax of Rs. 22.4 lakhs for the year ending 31st March 2009. MediaNama spoke to Samir Bangara, COO, Indiagames on a number of issues: on whether the company is primarily an IP Creation business, or a syndication business, drivers of the growth in the mobile gaming business in India, billing (and margins) for games on-deck and off-deck, and on games for the low-ARPU market:

How was the last year for Indiagames?

We experienced good growth, mainly in the Indian market. It has become a bigger and bigger chunk of what we do. The International business, lately, has been about the iPhone and also expanding our market. We had few launches last year, so International wasn’t as strong as it has been in the past, but our biggest title Bioshock is going live in the US market over the next month or so.

Is a majority of your revenue coming in from Syndication business?

A big chunk of it does come from the aggregation business. The international business is an IP driven business – comprising of our own games and branded games. In case of the domestic business, we are working with everybody except Gameloft. The new additions (for syndication) are Disney, which is a 30-33 percent grandparent of Indiagames through UTV. We will work increasingly with Disney in the US and European market. For example, they will publish Bioshock for us in the US market.

Bioshock was the game of the year on the XBox in 2007, it’s a big IP. We’ve licensed it for the mobile. We’re doing development in 2D, 3D, Java, Brew…the works. It’s been one of our longest development cycles, and one of the most expensive products. The game development would have taken over 10-11 months, then with fine-tuning, and receiving approvals, it took around 14-15 months.

Do you see yourself more as an IP creation company, or a syndication company?

Different geographies have different objectives. We have a blend of the games on demand business also coming into play in India. So, in the Indian market, it is a syndication driven business, and in months when we have massive big hits of our own…for example, 20:20 Cricket was a massive hit, embedded on a few million Nokia devices. If you include revenues from those items also, syndication will look slightly smaller in percentage.

Cricket is a big genre and we are doing multiple products. Our Cricket game for England vs Australia which was featured on the UK App store as a new and upcoming featured app. Last year, in December, our T20 Cricket Championship was the number one game on the Telstra deck in Australia. And then we do games like Ghajini which reduce our Syndication percentage. We don’t start the year saying Syndication should be X percentage. It could be as little as 45-50% and as high as 75-80%, depending on the original IP we’re launching and its success. For the last year, the Indian revenues contributed significantly.

The business leaders for development and syndication internally are different. We have a studio that is International focused and a studio that is Indian focused. The studios create a product, delivers it to the India publishing team for distribution in India and IG Fun for international publishing.

Which games are you releasing?

On the International side, the upcoming releases are Bioshock, Pentago, Mercury Meltdown (from sister company Ignition). We’re also doing an interesting version of our old faithful Bruce Lee in Q1 next year. This is around four generations ahead of what we’ve had so far. On the Indian side, we have the entire UTV portfolio, like Aage Se Right, What’s Your Raashi. We’ve launched Kaminey, which doing quite well, and will be doing Wake Up Sid, basically the entire portfolio from UTV.

How do you book revenues from your IP?

We book them as and when we get the information on downloads. The Indian market has become better in terms of data sharing and download reports – it is still not optimum, but significantly better than the past. We have live data for our off-deck business.

How do you explain Rs. 46 crores in revenues and a PAT of just Rs. 22 lakhs?

There are business that are in triple digit crores and not profitable. Mobile makes money, but the Games on Demand business is clearly in investment mode, it is loss making. We were running a 250-300 man call center at peak last year. We’ve been working at pretty fragmented levels with large operators like BSNL. The model that Hungama has launched is a nice compliment to us. Some big things have happened with GoD: Airtel is now bundling the GoD offering with their other services. Those kinds of things obviously give a boost to GoD, but they also come with certain costs.

You’re probably distributing the largest number of games in India, and we’ve heard the mobile games business in India has grown in the last year. What changed?

A big thrust has been the fact that the nuts and bolts are different. There are cheaper and more GPRS handsets, and no GPRS subscription charges with a pay as you go data download model. Operators make as much money through data traffic as they do through downloads – at least the top operators. They’ve opened up the walled garden, and mobile Internet is really taking off. The leading operators have 30-33 percent data capable handset penetration; of those, 25 percent go to the operator decks. Of that a fairly healthy number have played a game – sometimes 12-15 percent, or in some cases 25 percent.

Of the capable and live, we have a high gamer penetration number, but of the total instance, that is below 1-1.5 percent. What we see going forward is that the data capable handsets will increase. Also with operator decks opening up and we’re not only dependent on on-deck business.

But the billing is still through the operator even in case of off-deck?

You can use other options, but there’s nothing else of scale as of today.

Do you have better margins off-deck than on-deck, since you’re only using telecom operator billing, and not marketing?

Some operators do offer deltas for off deck, but not all. It varies from operator to operator. Logically speaking, you should have better margins, because that’s traffic you’re originating. Some of the operators have been more reasonable about it, and shared a slightly higher margin. It’s still not in the range that allows people to make that business blossom. In other cases, we’ll just take what we can. We have a fair amount of organic traffic on mobile, and remember that not everything that Indiagames does is not around gaming. A significant chuck of our business – around 30 percent odd – has nothing to do with gaming. We do wallpapers, tones, music, RBT. Effectively as a company, we have people in charge of different product lines. When we do movies, we do game rights and imagery rights.

In case of Ghajini, Imagery rights were a big contributor to our revenues. There’s a lot of music, as well as rights across all platforms.

Are Minimum Guarantee businesses viable?

We don’t have the money to throw around in senseless deals: when the MG is ridiculous, In the game business, we’re a lot more risk savvy, and we know how we can leverage that. The ARPUs are better, and we can use marketing to sell a game. Ghajini was an excellent deal for us, and we’ve since done deals at a rational MGs, and turned down those that weren’t rational. In Ghajini, we made around 3 times the MG in recoupment. If we’d done a traditional deal, paying them a packaged MG and then scrounging for recovering our money, we walk away feeling screwed, no one wins because the producers dont get the visibility. In our  syndication deals the money that the partners are making is on the top-ups, not on the MG.

What’s the outlook for this year with operator ARPUs declining and new users having lower balance on pre-paid?

This year we see ARPUs being a bit challenged because because the bulk of the subscriber growth is really coming from the lower end segments. We’re finding a challenge to find people with even Rs. 10 balance in their handsets. In FY10, we’ll see that that challenge is far more serious.

What about subscription based models like Airtel’s GamesClub and Reliance’s pay-per-play model?

There will have to be other such offerings with different tactics to be able to mine this segment of the user game. We’ve to figure out a way that they can afford the game. Subscription is the obvious one. As far as language barriers are concerned, games are close to being language agnostic.What we create in India, we can make multilingual.

Indian mobile users to hit 771 mn by 2013: Gartner – The Financial Express

via Indian mobile users to hit 771 mn by 2013: Gartner – The Financial Express on June 18, 2009

Bangalore: Indian mobile users will jump more than 90 per cent to 771 million by 2013 as companies expand networks to rural areas in the world’s fastest growing wireless market, research firm Gartner said.

India had 403.66 million wireless users at the end of April, Telecom Regulatory Authority of India figures showed earlier this month, second only to China that has more than 600 million wireless subscribers.

Cheap call tariffs and handsets are driving demand in India, where operators such as Bharti Airtel and Reliance Communications are now building telecom towers and networks to cover smaller towns and villages to hook new users.

Gartner, the world’s biggest technology research firm, sees mobile subscriber base growing at a compound annual growth rate of 14.3 per cent in the four years to 2013, up from an estimated 452 million by the end of 2009.

Revenues of Indian mobile phone companies will exceed $30 billion in 2013, rising at a compound annual growth rate of 12.5 per cent over the same period, it said.

“The Indian mobile industry has now moved out of its hyper growth mode, but it will continue to grow at double-digit rates … as operators focus on rural parts of the country, said Madhusudan Gupta, senior research analyst at Gartner.

Gartner, however, predicted a “significant drop” in average revenue per user (ARPU) — a key gauge of performance — as the bulk of new subscribers from the hinterland usually talk less on phones and some use mobiles just to answer calls.

Bharti, which is in talks with South Africa’s telecoms firm MTN Group to create the world’s No.3 wireless group, saw a drop of 15 per cent in its March quarter ARPU as it won more new users in rural areas. The research firm said voice tariffs would fall substantially in 2009 as new operators join the market.

The telecoms unit of Indian developer Unitech Ltd will launch mobile services with Norway’s Telenor in the December quarter this year, a top company official said on Tuesday.

Bharti’s rivals such as Reliance Communications, Vodafone Essar and Idea Cellular are also rapidly expanding their services across the country.

Related stories at

• http://www.ciol.com/technology/mobility/news-reports/indian-mobile-users-to-hit-771-mln-by-2013-gartner/18609121197/0/
• http://efytimes.com/efytimes/fullnewsxml.asp?edid=35243
• http://economictimes.indiatimes.com/Indian-mobile-users-to-hit-771-mln-by-2013-Gartner-/articleshow/4671022.cms

Bharti rules out foreign investment in DTH biz

18 Jun 2009, 0124 hrs IST, Rashmi Pratap, ET Bureau

MUMBAI: Bharti Airtel, India’s largest telecom operator, said that its direct-to-home (DTH) venture, Bharti Telemedia does not require the approval of the Foreign Investment Board (FIPB), as the investment has come from Bharti Airtel’s internal accruals.

Responding to questions raised by FIPB regarding foreign investments in Bharti Telemedia, the company said there is no cash flow or investment from any foreign entity into Telemedia either directly or through Airtel.

In a letter to FIPB, Telemedia said FDI investment into Airtel has been in accordance with the norms and cap in the telecom sector and duly approved by FIPB. “Further, there is no FDI investor who has invested in Airtel specifically for downstream investment in the DTH sector. Accordingly, Bharti Telemedia did not apply for FIPB approval as it was not seeking fresh FDI or overseas investment,” it added.

This communication has come in response to a query from FIPB, which said approval for Bharti’s DTH services was “subject to compounding” (confirmation) by the Reserve Bank of India. Bharti said that “compounding” was not applicable in this case as only Indian money has been invested in Telemedia and no foreign money was routed to the company.

The government had earlier said the shareholding structure provided by Bharti Telemedia did not have FIPB approval and this was not in accordance with existing FDI policy. Last year, the Information & Broadcasting Ministry had also raised questions about Bharti Telemedia not having FIPB approval for foreign investments coming into it on a pro-rata basis through investing firms, including Airtel.

According to the FDI guidelines for DTH, total foreign equity holding in a company should not exceed 49% and the FDI component within the foreign equity should not exceed 20%. Airtel has 40% stake in Bharti Telemedia, while the remaining is held by an “Indian company of the Bharti group”, a Bharti spokesperson said.

Bharti also pointed out to FIPB that under the revised FDI policy, as per Press Notes 2 and 4, announced in February this year, Airtel qualifies as a company “owned and controlled” by resident Indians and there is no indirect FDI into Telemedia through Airtel.

Under the revised Press Notes, a company is considered Indian if Indian promoters have a stake of at least 51%. Moreover, the investments made by such companies in any joint venture or downstream venture will be treated as Indian. Since a major part of SingTel’s 31% stake and Vodafone’s over 4% share in Airtel is routed through majority-owned Indian companies, Airtel is owned and controlled by Indians.

Airtel launched its DTH services in October last year. It competes with Tata Sky, Reliance Communications’ Big TV, Zee’s Dish TV and Sun Direct in this segment. The company hasn’t yet started disclosing revenues from DTH services separately. “We will start disclosing the operational and financial performance of DTH operations next year, once they become material,” Airtel CEO and joint MD Manoj Kohli said recently.

RComm in exclusive talks with Alcatel-Lucent for Rs 2,500 cr outsourcing deal- Telecom-News By Industry-News-The Economic Times

17 Jun 2009, 1128 hrs IST, ET Bureau & Agencies

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NEW DELHI: Reliance Communications (RCom) is in exclusive talks with French telecom infrastructure provider Alactel-Lucent to award a $500million (Rs 2,500 crore) operations and maintenance contract.

Last year, Reliance and Alcatel formed a joint venture for network management services, with the Indian company holding 33 percent and the French company owning the rest.

Last week, Reliance Communications entered into a marketing JV with Krishak Bharati Cooperative Limited (KRIBHCO) for selling its products in rural India.

The JV company known as KRIBHCO Reliance Kisan Ltd is aimed at synergising the strengths of both companies to create a rural distribution model for sales of telecom and non-telecom products.

KRIBCO will hold 60% equity in the JV company with the balance 40% held by Reliance ADAG.

RCOM’s tie-up aims to be a counter to that of Bharti Airtel, which has a similar JV with Indian Farmers Fertiliser Cooperative (IFFCO), the country’s largest fertiliser PSU unit.

In May, Bharti and IFFO had formed IFFCO Kisan Sanchar Ltd (IKSL) and said that the JV would harness the power of telecom to add value to the farm sector. Here IFFCO has a 50% stake while Airtel and Star Global have 25% each.

via RComm in exclusive talks with Alcatel-Lucent for Rs 2,500 cr outsourcing deal- Telecom-News By Industry-News-The Economic Times.

Related stories at

• http://economictimes.indiatimes.com/Reliance-Communications-in-talks-with-Alcatel-Lucent-for-a-500-mn-outsourcing-deal/articleshow/4667231.cms

Revenue, not user base, to set telecom pecking order

17 Jun 2009, 0305 hrs IST, Rashmi Pratap, ET Bureau

MUMBAI: Subscriber numbers in India’s wireless story are losing their relevance today as far as determining the industry position of a service provider is concerned. t will be revenues and not subscriber numbers that could decide the pecking order in the world’s fastest-growing telecom market.

This is reflected in the latest revenue figures released by the industry regulator, Trai. Going by this, the top three operators in India are Bharti Airtel, Vodafone Essar and Bharat Sanchar Nigam (BSNL).

Airtel’s adjusted gross revenue (AGR) from wireless and wireline operations was Rs 7,998 crore for the March quarter. Vodafone Essar, which offers only mobile services, had revenues of Rs 4,456 crore during January-March 2009 on a subscriber base of 68.7 million. Reliance Communications (RCOM), which has the second largest customer base, reported an AGR of only Rs 2,998 crore on 72.6 million users during the quarter, making it the fourth largest in terms of revenues.

The revenues for the state-owned BSNL stood at Rs 3,943 crore making it the third largest. BSNL offers mobile services on GSM apart from fixed line services. Besides showing the revenue capabilities of an operator, AGR is significant, as it is the basis on which service providers pay licence fee and spectrum charges. Operators pay a revenue share licence fee to the government ranging from 6% to 10% of their AGR. Increasingly, operators are targeting revenue growth instead of a larger user base.

According to Bharti Airtel’s vision statement, the company’s aim is 20% increase in revenue margin per subscriber in the next few years.

Analysts contend that with more and more low-end users signing up for services, it is becoming difficult for operators to maintain margins and improve ARPUs (average revenue per user per month). In such a scenario, those who continue to grow revenues along with subscriber base will be the clear winners.

“As the new subscriber base is primarily drawn from tier III towns and rural markets, the incremental subscriber addition is not leading to a commensurate revenue upside for telcos. The catchphrase to evaluate a telco’s performance will be quality of subscribers rather than the number of new subscribers,” Acsendia Consulting principal analyst, Alok Shende told ET.

A smaller player like Idea Cellular, which operates in 13 circles, had AGR of Rs 2,389 crore on a subscriber base of 39 million. This is just about Rs 600 crore less than RCOM on a base which is almost half of that company.

KPMG director (telecom) Romal Shetty said, “Initially, everyone was going after subscriber numbers. Now, they are looking at quality of subscribers. This explains the emphasis on value added services (VAS), which bring in higher revenues.” He pointed out that low-end pre-paid users are now bringing in monthly revenues of as low as Rs 70 per month.

Tata Teleservices reported revenues of Rs 1,889 crore during the quarter placing it at sixth followed by state-owned Mahanagar Telephone Nigam (MTNL). Aircel, a relatively new entrant, is at the eight position, which had AGR of Rs 721 crore during the quarter.

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.

Nokia Tops List of India’s Most Trusted Brands – BusinessWeek

From Economic Times of India June 17, 2009, 9:50AM EST

via Nokia Tops List of India’s Most Trusted Brands – BusinessWeek.

Nokia’s tagline of ‘connecting people’ certainly seems to have struck a chord with the Indian consumer. For a second year running, the handset maker has topped the prestigious, ‘Brand Equity Most Trusted Brands (MTB) Survey’. In second and third places are the two venerable consumer brands, Colgate, a four-time winner, and Lux, respectively.

The survey was unveiled last night at a glittering ceremony, which saw the who’s who of India’s brandsphere making their way to Mumbai from all parts of the country to be in attendance. The marque names included HUL MD Nitin Paranjpe, Nokia MD D Shivakumar, P&G MD Shantanu Khosla, Britannia MD Vinita Bali, BCG India MD Janmejaya Sinha, JWT CEO Colvyn Harris, Madison chairman Sam Balsara, Ogilvy India executive chairman & NCD Piyush Pandey and McCann Erickson India executive chairman Prasoon Joshi.

A clear indication that today the Brand Equity MTB Survey is the one study that marketers put their faith in. In this, the sixth year of the MTB survey, there are two new entrants into the top 10. Coming in at No. 6 is one of the oldest brands in India, Horlicks.

The brand, which has perennially been in the top 20, has finally managed to leapfrog into the coveted top 10. However, it is Reliance Mobile which is the star of this year’s edition, considering that it had failed to crack the top 20 in 2008. Telecom, as a category, is clearly on the ascendant. Airtel, BSNL and Vodafone have all surged up the charts to finish in the top 30, ranking 12, 19 and 30, respectively.

Hindustan Unilever, as has always been the case, continues to dominate the overall rankings with three brands (Lifebuoy, Lux and Pepsodent) in the top 10 and seven in the top 20. However, Pond’s, a brand from the HUL stable, also happens to be the biggest loser in the top 10, falling from No. 5 last year to No. 16 this year.

In the listing of the top 50 service brands, three out of the five brands are public sector brands namely SBI (13), LIC (17) and BSNL (19), perhaps an indication that public sector brands are perfectly capable of holding their own against their private counterparts.

The Brand Equity MTB survey is the largest, most diverse and most prestigious survey of its kind, with over 8,000 respondents nation-wide and is conducted by The Nielsen Company on behalf of Brand Equity. The detailed survey findings are available in today’s 12-page special edition of Brand Equity.

Also, watch out for all the action from the launch party and interviews with winners and India’s premier marketers on ET NOW, the soon-to-be launched cutting-edge channel for business news.

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/

Airtel crosses 5-m user mark in Delhi

From The Hindu Business Line, June 15, 2009

New Delhi, June 15

Bharti Airtel announced that it has crossed the significant milestone of five million customers in the Delhi and National Capital Region circle. Airtel is the first mobile operator to achieve this landmark in a metro circle and added the last million subscribers in only 13 months in a circle that already boasts of a mobile penetration of almost 100 per cent. “The milestone of five million customers amply demonstrates the customers’ faith and reinforces Airtel&# 8217;s leadership position in the Delhi and NCR circle, backed by its seamless network and excellent customer service,” said a press release.

MTN may take GDR route for 25% stake in Bharti Airtel

15 Jun 2009, 0014 hrs IST, Joji Thomas Philip, ET Bureau

NEW DELHI: South African telecom major MTN’s proposed 25% stake in Bharti Airtel will be through global depository receipts (GDRs), if the plans by the two companies to mutually acquire equity to form a global cellular alliance stretching from the Cape of Good Hope to the Indian Ocean goes through.

A top Airtel executive involved in talks with MTN told ET that the GDRs will be listed on the Johannesburg Stock Exchange, shedding more light into the complex nature of the deal, which is set to test the new foreign direct investment (FDI) norms earlier this year.

This puts to rest all speculation regarding the deal and implies that the entire equity expansion of Bharti Airtel will be in the form of GDRs issued to MTN and its shareholders. According to the existing plan, MTN will buy a 25% stake in Bharti, while another 11% will be held directly by MTN shareholders.

Bharti, in turn, will acquire a 49% stake in MTN through a complex stock-and-cash deal. The size of the deal is estimated to be worth over $23 billion and both companies had agreed to hold exclusive talks with each other till July 31, 2009. The new company will have revenues of about $20 billion and over 200 million subscribers.

The GDR route scotches the speculation about Bharti Telecom, the unlisted holding company of Bharti Airtel, issuing fresh equity to MTN to give the South African telco a 25% economic interest in India’s largest mobile company. Bharti Telecom holds 45.3% stake in Bharti Airtel, and it was assumed that the deal would see MTN taking about 10% stake at Bharti Telecom with the issue of new shares to MTN.

Additionally, along with a stake in Bharti Airtel’s holding company, it was assumed that MTN and its shareholders would also be offered a combination of equity shares, convertible instruments, warrants at Bharti Airtel under a Scheme of Arrangement. Another model that was speculated about involved Bharti and its promoters including SingTel floating a special purpose vehicle (76:24 or 51:49) for the deal.

The new foreign holding norms give enough headroom for Bharti to route MTN’s entire holdings in it through GDRs on an expanded equity base. This is because, new FDI norms, notified under Press Notes 2, 3 and 4 by the previous UPA government, considers a company Indian-owned if Indian promoters hold a majority stake in it, and the investments made by such companies in any JV or downstream venture are also treated as Indian.

Hence Bharti Airtel, which had close to 70% foreign equity stake as per the old guidelines — where ‘beneficial ownership’ is interpreted to include indirect holding — has only close to 43% FDI under the new norms. This is because a significant part of SingTel’s 31% holding in Bharti Airtel as well as Vodafone’s entire stake are routed through majority-owned Indian companies.

Related stories at

• http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=RSSFeed-Business&id=a45dfe22-9c89-4875-90fd-8b05cd3cbde8&Headline=MTN+may+take+Bharti+stake+through+GDRs

Win Free Talk Time With Airtel’s Talk Time Jackpot

From www.efytimes.com on June 13, 2009

Saturday, June 13, 2009:  Airtel is providing its pre-paid customers a chance to win a Talk time jackpot. This new offer guarantees the customer free talk time; the only thing that a customer has to do to avail this offer is to type ‘BEST’ and SMS it to 222 for knowing the Jackpot Recharge.

“We are delighted to launch this offer to all our pre-paid customers,” said Venkatesh V, CEO, mobile services, Bharti Airtel Ltd, Karnataka. “After pioneering affordable mobile services, Airtel is taking another step forward to connect deeper with its pre-paid customer base and delight them. This full talk time offer helps Airtel customers communicate more with their loved ones and stay more connected, sans cost barriers. We hope all our pre-paid customers utilise this ‘full value for money’ offer and benefit immensely from it”.

Every customer will get his full talk time option by means of a return SMS. On recharging for the Jackpot amount in the SMS received, the customer will get the default talk time online. The remaining talk time will be credited to the customer’s mobile account within the next 48 hours.

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.

Bring home the world on a single line

Thomas K. Thomas on The Hindu Business Line on June 12, 2009

New Delhi, June 11 Mrs Vinita Gupta, a housewife living in a residential complex in Greater Noida, does not know that she is among the first in the country to experience the latest in broadband technology — Gigabit-capable Passive Optical Network (GPON).

What it offers

Thanks to this technology, she, along with others who recently moved to this 3,000-unit complex, has access to services such as movie-on-demand, high definition television, surveillance systems, fire alarm system, or can even switch off lights and fans at home while sitting elsewhere.

GPON is an optical fibre cable access technology for delivering high-capacity broadband services that allows carriers to deploy a whole range of telecom and entertainment services on a single line.

While Mrs Gupta has taken only the IPTV and high-speed Internet services, she can even keep a watch on her house via her mobile when she is away on a holiday through the elaborate surveillance system being set up in the housing complex.

The solution is being offered by Swedish major Ericsson, which has partnered with Delhi-based property management services provider Radius Infratel Pvt Ltd to take this technology to other parts of the country.

The two are now set to bag a major contract for wiring up the Commonwealth Games Village and another for rolling out GPON throughout Dwarka in South-West Delhi.

This technology offers 100 times more capacity and is at least six times faster than the existing wire line broadband systems.

Operators, including BSNL and Bharti Airtel, are toying with the technology and the Ericsson-backed projects could just signal the beginning of high speed broadband finally coming to India.

150 start-ups dial Bharti innovation fund

Thomas K Thomas on The Hindu Business Line on June 12, 2009

New Delhi, June 11 As many as 150 start-ups have sought seed capital from the Rs 200-crore Bharti Airtel Innovation Fund. The telecom major will shortlist entities with interesting ideas and probably pick up equity stake in these ventures.

Bharti Airtel told Business Line that the ideas received by the company include applications for mobile TV, M-commerce, wireless security, m-advertising, healthcare and social networking.

The fund was started by Bharti in September 2008 to encourage developers to come up with innovative applications for mobile users.

In response to an e-mail questionnaire, Mr Sarvjit Singh Dhillon, Group Director, Bharti Enterprises, said, “Yes, we will be open to picking up equity stakes in these companies with the primary objective of playing the role of a mentor to these potential start-ups while promoting innovation and entrepreneurship.

“We have received an encouraging response to the Airtel innovation Fund which is aimed at promoting innovation and entrepreneurship in the field of telecommunications. Till now, we have received over 150 applications from the potential start-ups.”

Evaluation on

While the company did not give the specifics of the applications, Mr Dhillon said the process to choose right candidates is on.

“We are happy with the response received by the fund as it meets our primary objective of promoting innovation and entrepreneurship in the telecom sector. However, we are still evaluating the suitability of individual submissions from an innovation and economic perspective. While we have short-listed several candidates for consideration, there is still further review/assessment and discussions to be undertaken.”

Analysts said this move could be important in the light of third generation mobile services scheduled to be launched early next year.

Mobile operators such Airtel will require a host of innovative applications if they have to make money by offering 3G services.

At present, the mobile market is driven by revenues from voice-based services. However, with the tariffs spiralling downwards, operators are on the lookout for the killer application.

Through this fund, Bharti may be hoping to have a nursery of ideas for driving up its revenues through value-added services.

Bharti’s approach is similar to the one being followed by IT major Intel, which is funding application development for WiMAX technology.

Bharti, Vodafone to bring iPhone 3GS to India in Aug

12 Jun 2009, 0740 hrs IST, Joji Thomas Philip, ET Bureau

NEW DELHI: India’s leading GSM telecom operators — Bharti Airtel and Vodafone Essar — are set to bring Apple’s latest iPhone, called iPhone 3G S, to India in August. The new iPhone 3G S, which offers faster data speeds, a new camera, video recording, compass and voice control, was unveiled in US earlier this week.

In India, Apple has exclusive tie-ups with Bharti and Vodafone and this is one of the few markets where the US-based technology firm has a tie-up with two operators. Bharti and Vodafone jointly account for over 170 million of the over 400 million cellphone users in the country.

Apple had issued a guidance, saying the iPhone 3G S would make its debut in India in August, but refused to specify the date and the pricing for the country. The guidance also added that the handset would be launched in 31 other countries in August. Additionally, as per information made public by Apple, the iPhone 3G S will go on sale in 10 countries, including the US on June 19, and another 32 countries in the month of July.

Both Bharti Airtel and Vodafone Essar did not offer comments to a detailed query sent by ET.

In India, the new iPhone from Apple is set to face competition from smartphones such as Nokia’s N97 and similar offerings from BlackBerry and Samsung. Another handset that can be a potential threat to Apple’s new product is the Palm’s Pre which has just hit the US market, but is currently not available in India.

But, unlike handsets such as Nokia’s N97, the new iPhone 3G S will have a unique advantage as it has over 100,000 applications and also enjoys the support of the most vibrant and innovative developer community in this space. This implies, Apple’s product is more than just a technically superior handset, but more of a software platform with thousands of custom-made applications.

However, the catch is that the earlier model of the iPhone’s India entry has been a huge failure both in terms of sales (due to an unviable distribution model) coupled with a steep price tag and poor advertising which resulted in the brand failing to connect with customers here.

Also, customers in India who had followed Apple’s pricing globally during in other countries and believed that the iPhone would sport a similar price tag of $199 here were put off by the fact that they would have to shell out more than three time the amount to buy the product. Worse still, market watchers say that neither Apple nor Bharti and Vodafone Essar put in the efforts to explain the difference in market dynamics in India which led to the higher pricing here which left customers confused.

Market watchers and analysts also say that Apple’s decision to go in with only Bharti and Vodafone Essar in India was flawed, especially considering that GSM operators here are not major players in the handset retail space. This is because, GSM players rarely bundle handsets and restrict such offering to the lower-end phones in non-urban and rural markets.

For consumers, some of the new features that come with the iPhone 3G S include its ability to remember text that has been entered once, thereby eliminating the need to retype e-mail addresses, postal addresses or usernames, the digital compass which aids in navigation and a host of features that make it friendly for the disabled. Besides, it also comes with Apple’s own earphones along with a multi-button remote, but with a single control key and a mic.

Related stories at

• http://economictimes.indiatimes.com/India-to-ring-in-new-iPhone-in-August/articleshow/4647452.cms
• http://economictimes.indiatimes.com/Apple-hopes-to-fare-well-with-iPhone-3G-S-this-time/articleshow/4651934.cms

Airtel adds 2.81 mn mobile users in May

From The Financial Express on June 11, 2009

New Delhi: Bharti Airtel, India’s top mobile operator added 2.81 million mobile users in May to have a total of 99.5 million, data from the Cellular Operators’ Association of India (COAI) showed on Thursday.

Third-ranked Vodafone Essar added 2.54 million mobile users in May to boost its total to 74.1 million, the data showed

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

GSM base growth slips again in May (adds 8.3 mil)

The Hindu Business Line Bureau on June 11, 2009

 New Delhi, June 11 GSM based mobile subscription growth rate has slipped for the second consecutive month.

GSM operators added 8.3 million users in May, taking the total user base to 306.45 million, according to the Cellular Operators’ Association of India. The operators had added 8.97 million in April and 10.8 million in March. The slump in growth has been attributed mainly to lower additions by state-owned Bharat Sanchar Nigam Ltd.

BSNL saw its subscribers additions slow to 4.5 lakh in May, less than half of April’s 1.04 million and less than one-fifth of record additions of 2.50 million in March. In comparison, Bharti Airtel added 2.8 million new subscribers in May while Vodafone got just over 2.5 million in the same month. “Private operators are maintaining the growth rate. If BSNL ramps up its network then the growth rate will be back on track,” said an industry representative. Both Idea Cellular and Aircel have added more than one million new subscribers each in May.

Related stories at

• http://economictimes.indiatimes.com/India-adds-over-8-mn-GSM-mobile-users-in-May/articleshow/4646220.cms
• http://www.ciol.com/technology/mobility/news-reports/india-adds-8.3mn-gsm-users-in-may/12609120881/0/
• http://www.ciol.com/technology/mobility/news-reports/8-mn-new-gsm-users-in-india/12609120917/0/

Excerpt from above:

Meanwhile, the Reliance Communications (RCom) has deactivated over 36,000 connections in Jammu & Kashmir even as the state police continued its probe into the violation of guidelines in issuing SIM (Subscriber Identification Module) cards.

 

“The company has deactivated 36,000 connections and begun an internal probe into issuance of mobile connections on the basis of fake documents,” senior superintendent of police, crime branch-Jammu, J P Singh said. Singh, who is heading the probe, said Reliance had conveyed to the crime branch the deactivation of these numbers and on the progress of its internal probe.

 

Airtel in pact with Comviva for managing VAS biz

From The Financial Express on June 10, 2009

New Delhi: Leading telecommunication player Bharti Airtel said it has entered into a managed services deal with Comviva, a provider of value added services for mobile operators.

As part of this three-year deal, Comviva (earlier known as Bharti Telesoft) would manage around over 2,000 of Airtel’s VAS nodes across the country from various partners, to meet defined service level agreements, a company statement said.

“With Comviva managing our full suite of value added services, we anticipate enhancements in the service experience we deliver to our customers,” Bharti Airtel President Mobile Services Atul Bindal said in the statement.

Comviva CEO Manoranjan Mohapatra said, in addition to managing Airtel’s 2000 VAS nodes from a range of partners – we will also manage the complexities associated with the emergence of multiple technologies, different standards and a myriad of content to help grow Airtel’s VAS business, Shares of the company today surged as much as 1.50 per cent in morning trade and witnessed an intra-day high of Rs 825. The stock was later trading at Rs 823.20, up 1.28 per cent on the BSE.

Related stories at

• http://www.ciol.com/technology/mobility/news-reports/airtel-signs-managed-services-deal-with-comviva/11609120839/0/
• http://www.thehindubusinessline.com/2009/06/12/stories/2009061251830400.htm
• http://economictimes.indiatimes.com/Bharti-Airtel-in-pact-with-Comviva-for-managing-VAS-biz/articleshow/4639263.cms