Posted by telcobizpedia on June 17, 2009
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.
Posted in Aircel, Bharti Airtel, BSNL, Idea Cellular, MTNL, Reliance Communication, Tariff, Tata Teleservices, TRAI, VAS Misc, Vodafone Essar | Tagged: "Fixed line", Aircel, Airtel, Alok Shende, ARPU, Bharti, BSNL, CDMA, GSM, Idea, KPMG, MTNL, Reliance Communications, revenue, Romal Shetty, subscriber, TRAI, TTSL, VAS, Vodafone | Leave a Comment »
Posted by telcobizpedia on June 14, 2009
14 Jun 2009, 1159 hrs IST, PTI on www.economictimes.com
NEW DELHI: BSNL has dropped its plans to bid for telecom licence in Tunisia as the PSU finds the returns not enough to enter that market through bidding of licence.
“We did not bid for Tunisia… we did not find returns on our investment,” a senior BSNL official said.
Earlier the PSU’s CMD Kuldeep Goyal had said BSNL was planning to bid for telecom licence in Tunisia and get a footprint in the African market, which has immense potential.
But not bidding for Tunisia does not mean BSNL has lost sight of the potential of the African region, which it says has growing mobile usage.
BSNL official said the minimum bid price was understood to be $10 million but the Tunisian market is well- penetrated with 80 per cent of the population owing mobile phones leaving not much scope for more penetration.
BSNL has shortlisted eight consultants, including Ernst & Young, McKinsey, KPMG and PriceWaterHouseCoopers, for its plans of mergers and acquisitions, strategic partnerships and overseas forays.
The state-run firm, which so far concentrated only on the Indian market (except Delhi and Mumbai), has decided to expand overseas. Sources said BSNL has a cash surplus of over $10 billion and would use part of these resources for its overseas foray.
After being denied entry to Delhi and Mumbai, BSNL was finally granted permission by the government to venture outside the country through acquisitions, JVs and licence buys to expand.
BSNL has already set up a separate international business division to explore telecom opportunities abroad.
Last year, Bharti Airtel and Reliance Communications entered into negotiations with the South Africa-based telecom giant MTN to expand in the African continent, but the talks failed. Bharti again has revived talks with MTN for a cash- cum-stock acquisition.
Earlier this year, Tata Communications announced plans to expand its operations in Africa through acquisitions, joint ventures, and new projects, and in January increased its stake in South African fixed-line operator Neotel to 56 per cent.
BSNL’s sister concern MTNL has already forayed into Nepal and Mauritius. Analysts said BSNL may be exploring the possibilities of bidding for mobile licences in Egypt, Rwanda, Malawi, Turkey and Iran. All these countries will open bids for licence auction within the next couple of months.
Posted in BSNL, Mergers | Tagged: BSNL, Ernst, Investment, KPMG, Kuldeep Goyal, license, McKinsey, PwC | Leave a Comment »
Posted by telcobizpedia on June 12, 2009
By Heena Jhingan on www.ciol.com on June 12, 2009
Who does not love freebies? Mobile users are now more willing to be disturbed if that brings along some free-gifts attached. Following a positive response to Virgin mobile’s strategy to offer free calls if customers view and respond to ads, operators in India are becoming receptive to the concept and intend to encash its popularity.
Free talk time offers in India have caused subscriber defection from one operator to the other. But mobile advertising which was once thought to be annoying, is now emerging as a mode to earn a little revenue for the operator, and the subscriber receiving advertisements on his phones can get free music downloads, free instant messaging and video games in exchange.
To make the most of this rage and be in the race, the state-owned BSNL launched an integrated Mobile Advertising Service which will help its mobile subscribers to earn talktime by simply registering for a service which will send advertisement to the registered users which in turn help users to earn talktime .The Mobile advertisement services is currently available in BSNL’s West zone circles in Maharashtra, Gujarat, Madhya Pradesh and Chhatishgarh.
Considering the trajectory Indian mobile industry is making with over 400 mn subscriber, UK-based company positioned as a free mobile service network for 16-24-year-olds, Blyk Ltd, is preparing to enter the Indian market and is in talks with one or more local telecom operators.
Blyk that has around 200 brands on board in the UK from leading advertisers such as Unilever Plc and Microsoft Corp, offers customers some free talktime or free texts in return for accepting targeted advertising on their phones every day. In India, the ad-funded company is seeking partners to gain access to their spectrum, or airwaves, and subscriber base. Last year, the company announced an additional Rs267.6 crore of investment to support its operations and international expansion.
If the talks materialize, Blyk will be the first network to open here positioned solely as a free service, although there will be a ceiling on free calls and messages permitted per subscriber.
The operators in India are looking at such models as win-win for all stakeholders, cellular operators, customers and advertisers. It is believed the youth will be very enthusiastic about the offer. Reliance Communications is rumored to be in talks with Blyk. However, some new and small operators are also being considered.
Virgin became one of the first providers to offer such a service in 2006,its customers could get upto 75 minutes of free calls per month if they spent an equal amount of time looking at ads and replying to these ads via text messages. The MVNO made an entry in the market with a unique concept of paying the subscriber 10 pasie per minute for incoming calls.
BSNL who launched the services last month believes it is important to keep with market trends. As of now the operator is offering Rs 5 free talk time for every 10 ads, which is not a big amount. The company says it is still experimenting how more revenue be earned through such schemes.
Interest in such services is reflected in global audit and advisory firm KPMG’s recent study which says Mobile phone users in India are more willing than their global counterparts to receive advertisements on their phones in return of ad-funded content. The survey finds globally 49 per cent of respondents would be willing to watch ads on their mobiles in return for free music. About 44 per cent would be prepared to do the same in return for free access to Instant Messaging. It would not be surprising if more global mobile service network like Blyk show interest in Indian market.
Companies are realizing that the need for engagement with the consumer is increasingly going through cellphone, and quantifiable ROI is alluring for brands. The Mobile advertising is expected to reach $5.7 billion by 2014, though that will still be 1.5% of total global adspend. Creative teams are working on interesting ad content and their presentation. Some companies plan to run ads in the middle of the call.
A major apprehension that operators in India have about mobile advertising is that certain groups may find it intrusive in spite of the freebies. But, no worry as these services are availed by choice and if one needs to be ultra cautious there is an option of DND (Do Not Disturb) registration.
Posted in Advertisement, Reliance Communication, Virgin Mobile | Tagged: "Virgin Mobile", advertisement, Blyk Ltd, BSNL, integrated mobile advertising, KPMG, messaging, MVNO, Reliance Communications | 1 Comment »
Posted by telcobizpedia on June 11, 2009
11 Jun 2009, 1931 hrs IST, PTI on www.economictimes.com
NEW DELHI: State-run BSNL has shortlisted eight consultants, including Ernst & Young, McKinsey, KPMG and PriceWaterHouseCoopers, for its plans of mergers and acquisition, strategic partnerships and overseas forays.
A BSNL official told PTI it has also empaneled British Tele Consults, Value Partners, PRPM Consults and Diamond Management and Technology Consultants.
The official said PwC has furnished a certificate to BSNL saying it has not been barred to deal with any PSU and BSNL, if found later so, it can terminate the services of PwC.
These consultants will have to enter into an agreement with BSNL by tomorrow. Each time BSNL undertakes an overseas initiative, these eight firms will be asked to quote their commission price and the the lowest bider will be selected for that particular job, the official said.
The official said the PSU is looking at Africa as an area of focus as it is an emerging region and also culturally, financially, African countries suits more to India firms.
The state-run firm, which so far concentrated only on the Indian market (except Delhi and Mumbai), has decided to expand overseas. Sources said BSNL has a cash surplus of over 10 billion dollars and would use part of these resources for its overseas foray.
Posted in BSNL, Government, Joint Venture, Mergers, Statutory And Regulatory | Tagged: BSNL, Ernst, KPMG, McKinsey, Merger, PwC | Leave a Comment »
Posted by telcobizpedia on June 4, 2009
4 Jun 2009, 1434 hrs IST, PTI on www.economictimes.com
NEW DELHI: Indians are more willing to experiment with value-added services, including chatting, video gaming and watching live TV on mobile phones, as compared to their global counterparts, KPMG says.
Asian consumers, including those in India, seem the most willing to use their mobile phones for purchasing music, video games, and watching live TV, followed by the Middle East and Africa and Latin America, global consulting firm KPMG’s ‘Consumers and Convergence III’ global survey found.
However, the developed-market consumers of Europe and North America are apparently less willing.
The survey revealed that there exists a huge potential for mobile chat services, video gaming on mobile and watching live TV on mobile in India.
Globally, 18 per cent of respondents were very likely to use a mobile chat service in the next 6-12 months as against 34 per cent in India, showing growing demand for such services.
The survey revealed as much as 95 per cent Indian consumers were satisfied with their music-download experience on mobile phones as against 66 per cent respondents globally.
“While mobile additions exceed 10 million a month, average revenue per user’s (ARPU) continue to drop. Telecom players recognize rise in VAS revenues will be a key aspect of future growth and profitability,” KPMG India Head of information, communication & entertainment Rajesh Jain said.
About 86 per cent respondents in the country and in China indicated likelihood of watching live TV on mobile phones in the next 12 months, the survey added.
Players in value chain are innovating and focusing on the increasing market size for their products and services, Jain added.
KPMG surveyed over 4,000 consumers in 19 countries world wide, in order to understand the future for the market, revealing global trends and some regional differences.
In India, although the user-base of mobile gaming is smaller, a substantially higher proportion of 63 per cent was satisfied with the service, which reflects gaining acceptance and opportunity for mobile gaming companies as the segment moves beyond the early adopters.
Meanwhile, m-commerce applications continue to face challenges for gaining wider acceptance in the country.
KPMG’s survey revealed that there exists a huge potential for banks to grow their market with mobile phone users, as globally 53 per cent of consumers said they are comfortable with the idea of using a mobile phone for financial transactions.
About 64 per cent of Indian’s surveyed stated that they are “at least somewhat likely” to conduct banking through a mobile device in the next 12 months.
Further, 93 per cent respondents said clear pricing and 94 per cent felt download speed as an influencing factor for the purchase of video clips and mobile TV.
Posted in Advertisement, MCommerce, Mobile TV, VAS Misc | Tagged: banking, Gaming, KPMG, Mcommerce, messaging, Mobile TV, VAS | Leave a Comment »
Posted by telcobizpedia on May 25, 2009
25 May 2009, 1622 hrs IST, PTI on www.economictimes.com
NEW DELHI: With Bharti Airtel renewing its efforts for acquiring 49 per cent stake in South African MTN, industry experts feel it will be a good strategic deal in the long term but the domestic telecom major’s balance sheet may come under debt pressure in the short term.
“The deal seems fairly valued on the face of it and a good strategic deal from a long term point of view. In the immediate future, Bharti will have to fund the cash gap, meaning its balance sheet could be under debt pressure in the short term,” BMR Advisors M&A partner Vivek Gupta said.
Also, it would be imperative to be able to structure the deal right to minimise leakages or public offers, Gupta added. KPMG India head of telecom practice Romal Shetty believes that Bharti’s expansion into newer geographies would boost its plans to expand its reach and put an Indian mark on the global telecom industry.
Bharti Airtel stands to gain in the long term through the deal as it will give the company an access to tap the fast growing and under penetrated telecom market in Africa. “It could put a pressure on Bharti’s balance sheet in the short term but the deal will bring out synergies between the two companies and put an Indian stamp on the global telecom industry,” Shetty said.
Bharti Airtel today renewed its effort for 49 per cent stake in South African telecom giant MTN and will discuss the potential deal exclusively by July 31 this year.
If the deal materialises, the combined entity would have revenues of over 20 billion dollars and a subscriber base of over 200 million. IT research and advisory firm Gartner’s principal analyst Kamlesh Bhatia said that the deal will see creation of an emerging market giant in the global arena.
“Although the deal is not a transformational one it signals of various things to come including consolidation in the global industry and emerging markets coming into prominence,” Bhatia said.
He also agreed that the deal may put a pressure on the balance sheet of Bharti, but it would depend mainly on the way both companies leverage their synergies to offset the negative implications.
The potential transaction between Bharti and MTN would create a leading telecommunications service provider group aligning Bharti’s market leading Indian business with MTN’s market leading African and Middle Eastern operations.
Posted in Uncategorized | Tagged: Airtel, Bharti, Gartner, Kamlesh Bhatia, KPMG, MTN, revenue, Romal Shetty, Vivek gupta | Leave a Comment »
Posted by telcobizpedia on May 22, 2009
Adith Charlie on The Hindu Business Line, Mumbai, May 22
ICICI Bank-promoted software company 3i Infotech has ventured into providing IT services to the media and entertainment industry in India. The city-based firm will provide services related to consulting, systems integration and remote infrastructure management to companies in broadcasting media.
“When we did our research, we felt that it was prudent for us to extend our managed IT services offerings into the growing media and entertainment industry in India. We have been toying with this idea for some time now but entered this market only 4-5 months back,” Mr Amar Chintopanth, Chief Financial Officer and Executive Director, told Business Line.
However, 3i Infotech does not plan to develop specific software for the media industry, he added.
The company has already been signed up by a new television channel for providing end-to-end systems integration services. It has appointed a business head who will be in charge of developing new customer relationships.
According to Mr Chintopanth, the media and entertainment practice contributes around a million dollars in revenue to the company. “It is just a start-up as of now. Going forward, we expect this segment to be a fast growing one,” he said.
According to 3i Infotech’s Web site, its media and entertainment services would cut across television channels, FM Stations, Internet Protocol Television (IPTV), Teleport etc.
The media and entertainment industry in India is expected to grow at a compounded annual growth rate of 12.5 per cent to touch revenues of over Rs 1,05,200 crore by 2013 (from Rs 60,000 crore this calendar), according to the FICCI KPMG media and entertainment industry report.
3i Infotech has been a provider of IT products and transaction services for the financial services industry.
Posted in Uncategorized | Tagged: Amar Chintopanth, Broadcasting, Digital TV, FICCI, IPTV, KPMG, Radio, Teleport | Leave a Comment »