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.

Deutsche Telekom Eyes Indian ISP Space; Devas Multimedia Looks To Raise Funds

From http://www.medianama.com/2009/08/223-deutsche-telekom-eyes-indian-isp-space-devas-multimedia-looks-to-raise-funds/ on August 24, 2009

By Preethi J

German telecom conglomerate Deutsche Telekom, which owns T-Mobile in USA, is planning to join the Internet Service Provider arena in India. According to a MarketWatch report, the telco is planning to set up a high-capacity radio network for quick Internet connections in metropolitan areas of India come next year.

I wonder if we need yet another ISP in India, with already a number of incumbent players – Reliance, Tata Indicom, MTNL, BSNL, Hathaway, Tikona, Sify and Bharti Airtel, and France Telecom, Vodafone and DEN Networks also planning ISPs. With the last mile still closed, wireless is being seen as the way to go; which is where Devas Multimedia comes in.

Devas MultiMedia:Looking To Raise Funds

Deutsche Telekom received permission from India’s Foreign Investment Promotion Board (FIPB) last year to invest Rs. 317.85 crore into Devas Multimedia, a little known Bangalore-based wireless services company, which was working on a long term Mobile TV (DMB) project with Indian Space Research Organisation (ISRO). DT has acquired 17% stake in Devas.

Interestingly enough, Devas is looking to raise funds. The company, which already has Telecom Ventures and Columbia Capital as investors, apart from Deutsche Telekom, has a proposal pending with the FIPB for permission to “induct fresh foreign equity participation with the induction of a new foreign collaborator.”

Devas is a curious case: little is known about it, and it still appears to be in stealth mode:  there’s no website and there is little information on it except of it’s work with ISRO and its backers.

India desperately needs a catalyst to boost Internet penetration: Internet growth in July 2009 in India has actually fallen to 2.7% from 3.4% in June and 6.3% in May 2009. Besides the well known issues of delinking last mile access and ISP licensing which are throttling growth, other issues Deutsche Telekom will need to grapple with are low PC adoption and lack of Indic language content.

Companies Eying ISP Space In India

Earlier this year, France Telecom also entered India through Equant Network Services, its joint venture with Emery Technologies with the intention of launching Internet services;  Vodafone too announced its entry. The latest to announce plans of becoming an Internet service provider is DEN Networks, a cable TV company which is planning to go public to raise funds.

The Wireline Alternative: Broadband Over Power

Research and experiments on Broadband over Power Lines have been on for years – news about it pops up every few months. Indian Express has the latest: about Bengal Engineering and Science University professors and CESC have implemented Broadband over Power in two housing estates in Kolkata. The copper wires that supply electricity to double as broadband connections and installing a customer premise equipment that decodes the signals and brings them to your computer. But if it’s that simple, why is it taking so long to materialise? The government recently deferred an application by Powermax Communications, a provider of power transmission  and distribution management systems and broadband over power services, to increase foreign equity participation.

Vodafone approaches FIPB for NLD, ISP licences

From http://www.economictimes.com on June 16, 2009

NEW DELHI: Mobile services company Vodafone Essar has applied for Internet Service Provider

and national long distance licence and has approached the Foreign Investment Promotion Board (FIPB) for approval.

The company officials confirmed that the operator has applied for these two licences and aims to become a full-fledged communication service provider

in the country.

FIPB, on June 19, may take up the proposal, sources said. If Vodafone Essar, in which the UK-based mobile firm Vodafone holds majority stake, gets the national long distance licence (NLD) it will help the company save operating expenses for carrying STD traffic, instead of hiring other mobile company’s network for the purpose.

All the top mobile operators like Reliance Communications, Bharti, BSNL and MTNL have their own NLD infrastructure.

The company is also planning to enter the internet service segment in which all other major mobile operators like BSNL, Reliance Communications and MTNL has a presence.

BIG TV to kick start advertising campaign

From www.ciol.com on June 15, 2009

MUMBAI, INDIA: Big TV, Reliance Communication’s DTH service, is all set to kick start a two month long advertising 360 degree integrated campaign. The new campaign will deliver the value benefits a customer can derive through Reliance BIG TV and its entertainment niche, focusing on the brand’s larger than life canvas.

For the campaign, Big TV has engaged Corcoise Production which is headed by Prasoon Pandey while TVCs will be directed by Prashant Issar. A team from Leo Burnett led by Nilesh Tivary and KV Shridhar will lead the multi-crore campaign, which will be launched across the country covering electronic media, print, over 30 FM radio channels, OOH media, over 800 online portals and a host of social media. The advertising campaign will cover all the genres on a pan-India level with 1500 GRPs and over 10,000 radio spots.

RComm, Kribhco JV eyes rural cell market

From Hindustan Times on June 9, 2009

Kribhco and Reliance Communications Ltd (RComm) on Tuesday formed a joint venture — KRIBHCO Reliance Kisan Limited (KRKL) — to distribute RComm’s services through its network of more than 25,000 cooperatives throughout the country.

KRIBHCO will hold 60 per cent equity in the joint venture company with the balance 40 per cent held by Reliance ADAG group.

“The JV will market telecom products of RComm — both GSM and CDMA,” said SP Shukla, president, wireless, Reliance Communications.

“Later, KRKL will also distribute products and services of other business enterprises of Reliance ADAG including Reliance Capital, Reliance Entertainment and BIG TV DTH,” he said.

This is the second such marketing tie up to reach out to the rural area. Earlier, Bharti airtel did a similar tie up with IFFCO.

Related stories at

• http://www.business-standard.com/india/news/rcom-kribhco-to-form-jv/360632/
• http://www.thehindubusinessline.com/2009/06/11/stories/2009061150960400.htm
• http://economictimes.indiatimes.com/RCOM-ties-up-with-Krishak-Bharati-to-capture-rural-India/articleshow/4640234.cms

Videocon eyes 1.5 mn subscribers for DTH: Official

Source Reuters on Hindustan Times on June 8, 2009

Videocon Industries Ltd is targetting 1.5 million subscribers for its direct-to-home (DTH) service, riding on its large network of consumer appliance dealers, its top official said.

The company has developed new liquid crystalline design televisions that can directly receive DTH signals and is aiming for a June 20 launch, Chairman Venugopal Dhoot told television channel NDTV Profit on Monday.

“No set-top box is required,” Dhoot said. “We are also giving this (technology) through different models.”

“We have already invested around 500-600 crores (5-6 billion rupees) and further investments will be made as required,” he added.

The electronics and appliance maker also plans to rope in foreign investors once the service acquires a sizeable customer base, he said.

Videocon will be entering a market that already has large competitors including Sun Direct, Tata Sky, Dish TV, majority owned by Zee Entertainment Enterprises, and Reliance Communications Ltd’s BIG TV.

At 2.57 pm, shares of the company were down 3.89 per cent at 176.5 rupees in a weak Mumbai market.

(Reporting by Nandita Bose; Editing by Sunil Nair)

Telcos dial Africa for new pastures

Manoj Gairola, Hindustan Times on June 7, 2009

After tasting success in domestic markets, it’s ‘Dial Africa’ for Indian telecommunication companies. And it’s not the high-profile, twice-rejected MTN alone that’s attracting Indian firms.

While the government-owned Mahanagar Telephone Nigam Ltd (MTNL) is in advanced discussions for telecom licences in four countries, Bharat Sanchar Nigam Ltd (BSNL) is formulating its strategy to enter the continent.

Adding their bit are the Essar group, Tata Communications and Reliance Communications, all of which have licences for telecom services in African countries and are looking to expand their operations.

Bharti Airtel is negotiating with South Africa-based MTN for a “two way deal” that would allow it to own 49 per cent equity in South African giant MTN.

“We are evaluating a proposal to acquire a company that has licences in four to five countries,” said R.S.P. Sinha, chairman and managing director (CMD), MTNL. “Africa is a lucrative market and we would like to acquire a licence through auction if there is an opportunity.” However, in most countries, licences have been auctioned.

“Funding is not an issue for our Africa expansions,” Sinha said. “We have done all the ground work.” MTNL is presently a service provider in partnership with Tata Communications (formerly VSNL) and Telecommunications Consultants India Ltd (TCIL). “We will enter into Africa on our own,” said Sinha.

MTNL not the only government-owned company eyeing the African market. “We are looking at an expansion in Africa,” said Kuldeep Goyal, CMD, BSNL. “Whenever we find right opportunity we will grab it.”

Essar group has acquired a telecom licence in Uganda. “Africa is an important market for Essar’s telecom business and we are working towards building a strong brand in this market,” said Srinivas iyengar, CEO, Essar Telecom Kenya. “We would be looking at opportunities to establish a pan Africa footprint in future.”

The company plans to offer services in a joint venture with a local company, Kenya Telecom Uganda Ltd. It already has a licence in Kenya and plans to expand in other countries.

“We find African markets promising and have recently hiked our stake in Neotel (of South Africa) to 56 per cent from 26 per cent,” a senior Tata Communications official said. “We view this as a beach head to the rest of the African markets as and when right opportunities arise.”

Why Africa?

“African countries have just started moving on the development path,” said RK Upadhyay, CMD, TCIL. The company has been executing telecom infrastructure projects in Africa for past 20 years and is present in 30 countries. “There is expected to be enormous growth in telecommunications in next five years. Whenever, development takes place in a developing economy, the need for telecom services increases,” Upadhyay said.

“Africa has a low teledensity and high average revenue per user,” said Goyal. This explains why Indian providers want to go to. India has a teledensity (number of telephones for a population of 100) of about 40 per cent. In many African countries the teledensity is below 20 per cent (See table).

Besides, the continent’s average revenue per user is high. Against Rs 250 per month in India, the number in some African countries including is about three times as much.

Reliance has a licence in Uganda for offering mobile, fixed line, Internet, national and international long distance services, in addition to WiMax and Wifi services. It plans to acquire licences in other countries, a senior official said.

No criminal cases against telcos: DoT; Foreign telcos get clean chit in licence fee, service tax case

3 Jun 2009, 0143 hrs IST, Joji Thomas Philip, ET Bureau

NEW DELHI: Department of telecom (DoT) will not file any criminal case against Indian and international long-distance operators including AT&T, British Telecom, France Telecom, Verizon, Bharti Airtel, Reliance Communications

and Tata Communications after investigations by both the CBI and an internal committee of the communications ministry proved that collaborations between these players did not result in revenue losses to the exchequer.

The DoT had earlier alleged that the international operators were providing long distance services to customers in India by tying up with Indian counterparts rather than taking separate licences leading to huge losses in levies to the exchequer.

The DoT had said that these foreign operators had not paid a one-time entry fee of Rs 25 crore (prior to January 1, 2006) plus 15% of their annual revenues as levies for offering long distance services in India. All these international long distance operators have now taken licences for their Indian operations.

After the CBI had completed preliminary investigation on behalf of DoT, the central agency had suggested that the government file a case against these companies for a thorough probe into probable financial loss.

But, following the CBI report, the DoT committee gave an opportunity to all these companies to explain their viewpoints on the alleged violations. On studying the presentation by these telcos, DoT committee concluded that there was no loss to the exchequer.

Story on The Hindu Business Line dated 03 June 2009

Foreign telcos get clean chit in licence fee, service tax case

Thomas K Thomasin

New Delhi, June 2 In a move that removes all hurdles to global telecom firms to bid for third generation mobile (3G) spectrum, an internal panel of the Department of Telecom has decided to close a six-year-old case against international majors including AT&T, BT (formerly British Telecom), Equant and MCI Worldcom for alleged evasion of licence fee and service tax.

While it is not clear on who will actually bid for 3G spectrum, a clean chit from the DoT panel on the issue has removed possibilities of any legal complications later on for these multinational majors.

The issue dates back to 2003 when it was alleged that the foreign telecom players including AT&T Communications Services India, Equant and MCI Worldcom India were selling managed data network services to corporates in India without taking any licence from DoT.

It was alleged that these companies had got into a partnership with Indian operators, including Videsh Sanchar Nigam Ltd (now Tata Communications), Reliance Communications and Bharti, to bypass paying local taxes and levies. The companies were hauled up by the Parliamentary Standing Committee on IT for allegedly violating foreign direct investment norms and also for depriving the national exchequer.

The matter was referred to the Central Bureau of Investigation which, in turn, put the ball back in DoT’s court on the ground that the telecom department should carry out its own assessment based on the licence conditions. The CBI had concluded that in case the DoT found irregularities then it could lodge an FIR for further investigation.

But now, in a relief to the multinational operators, a DoT committee has concluded that the alliance with Indian players was not illegal. For example, in the case of AT&T, the DoT panel stated, “there is no loss of revenue to the Government as the service tax have been properly accounted for and the licence fee has been paid by VSNL. Further, as per terms and conditions of the international long-distance licence, the licensee can always employ or appoint agents for provision of service.” The panel said that AT&T has produced invoices and tax details to prove that it had met with local laws in India.

“The committee feels that in the case of AT&T, being the service support organisation of VSNL and interfacing with customers in India on behalf of VSNL, there is no violation of Indian Telegraph Act 1885 and loss to exchequer. On the part of VSNL also there is no violation. Therefore, there is no merit in the complaint and the case can be closed,” it added.

In the case of BT, the DoT panel observed that the company had got into an arrangement with Bharti to service its global customers in India. BT, however, had also serviced clients directly through its subsidiary in Singapore.

The UK-based company claimed that the revenues earned by the Singapore unit relate to services provided by BT outside India and, therefore, it was not liable to pay service tax and licence fee to the DoT.

Similar story on http://www.ciol.com at http://www.ciol.com/technology/mobility/news-reports/dot-clears-3g-spectrum-hurdles/3609120497/0/

India’s Mobile Market Is Growing Despite Economic Slowdown

From http://www.pcworld.com on 02 June 2009

By John Ribeiro, IDG News Service/Haarlem Bureau Tuesday, June 02, 2009 2:00 AM PDT

India’s mobile phone market continues to be unaffected by the economic slowdown, with 11.9 million new mobile subscribers in April. That’s a 45 percent greater increase than in the same month last year, according to data released Monday by India’s Telecom Regulatory Authority of India (TRAI).

The mobile market has not been affected so far by the economic slowdown, as Indian consumers see communications as a necessity, said Kapil Dev Singh, country manager at analyst IDC India.

The mobile subscriber additions in April were however lower than the 15.64 million new connections in March, something the telecom regulator regards as a seasonal drop. In India, the monthly data is closely watched for signs of an impact of the economic slowdown on India’s booming mobile market.

The slowdown between March and April is seasonal, and does not reflect an overall slowdown in the mobile business in the country, a TRAI official said Tuesday.

As the Indian fiscal year ends in March, mobile service operators offer deep discounts and are more aggressive in their marketing in March, the official said.

“There have been drops from month-to-month previously, so the drop in April is more likely to be seasonal,” IDC’s Singh said.

The new additions in April this year helped take the total number of mobile subscribers in India to 404 million.

India’s largest mobile operator Bharti Airtel added 2.8 million new mobile subscribers in April, taking its total subscribers to 96.74 million, while state-run Bharat Sanchar Nigam Limited (BSNL) added about 1 million new subscribers to have a subscriber base of 53.17 million at the end of the year.

Reliance Communications, India’s second largest mobile operator, added 2 million new customers in April, compared to 3 million additions in March. The company saw high additions in the first quarter as it rolled out its new GSM (Global System for Mobile Communications) network in addition to its existing service using CDMA (Code Division Multiple Access).

The number of mobile subscribers in the country is expected to increase as mobile operators target rural towns and villages. The auction of 3G licenses, now rescheduled for the end of this year after a number of postponements, is also expected to give this market a fillip.

COAI Gets New Executive Council For 2009-10

From http://www.efytimes.com on June 02, 2009

Tuesday, June 02, 2009: The Cellular Operators Association of India (COAI), the main telecom industry lobby group of India, has announced a new executive council which has taken over the reins of the industry association. Suneeta Reddy, chairperson, Aircel Ltd and vice chairperson, COAI has been appointed as chairperson of COAI. Also Sanjay Kapoor, deputy CEO, Bharti Airtel has now become the vice chairperson of COAI for 2009-10.

During the COAI Annual General Meeting held on 29 May 2009 at New Delhi, outgoing chairman Asim Ghosh thanked the members for their unwavering support during his tenure as chairman. He reminisced fondly about his long association with the industry and the several challenges that the industry had faced and overcome in the last decade.

Ghosh noted that 2008 was a landmark year for the Indian industry as it had reached global scale. He pointed out that the job was never done and there would always be challenges ahead. He thanked Suneeta Ready for her support as vice chairperson, the executive council and the secretariat team for their efforts and contributions and wished them all the very best for the future.

Suneeta Ready, the chairperson elect, thanked the members for the trust and faith reposed in her. She emphasised that COAI had always stood for inclusive growth. She pointed out that the agenda for industry for the next 12 months included ensuring availability of adequate 2G spectrum, an early auction of 3G and BWA spectrum to facilitate the leap to the next generation of services, bridging of the digital divide, improving the financial viability of the industry and making it globally competitive.

Suneeta pointed out that with the imminent introduction of mobile number portability, the SIM card would become like a vote that could be exercised anytime by the consumers, and the industry should make all efforts to ensure that mobile is viewed as a service that adds value to the consumers lives.

The main members of COAI are: Aircel Ltd, Bharti Airtel Ltd, Datacom Solutions Pvt Ltd, Idea Cellular Ltd, Loop Mobile Ltd, Reliance Telecom Ltd, S Tel Pvt Ltd, Swan Telecom Pvt Ltd, Tata Teleservices Ltd, Unitech Wireless Pvt Ltd and Vodafone Essar Ltd.

Story at Financial Express on 30 May, 2009

New Delhi: The COAI Annual General Meeting held at New Delhi saw a smooth transition with the new Executive Council taking over the reins of the industry association.

The event saw the General Body ratify the nominations of Ms. Suneeta Reddy, Chairperson Aircel Ltd. and Vice Chairperson, COAI as Chairperson, COAI and Mr. Sanjay Kapoor, Deputy CEO, Bharti Airtel as Vice Chairperson of COAI for 2009-2010.

The nominations for the Executive Council were also ratified by the General Body.

Outgoing Chairman, Mr. Asim Ghosh thanked the members for their unwavering support during his tenure as Chairman. He reminisced fondly about his long association with the industry and the several challenges that the industry had faced and overcome in the last decade. He also noted how 2008 was a landmark year for the Indian industry as it had reached global scale. He pointed out that the job was never done and there would always be challenges ahead.

TTSL to launch services on GSM platform shortly

From http://www.topnews.in Submitted by Darpana Kutty on Tue, 06/02/2009 – 05:07

The telecommunication company of the Tata Group – Tata Teleservices Limited (TTSL) is all set to launch services on GSM platform shortly. The TTSL is compelled to provide services on the GSM platform, due to the lack of a “spectrum roadmap for code division multiple access (CDMA) operators and the limited allocation of airwaves”.

The Managing Director of TTSL, Anil Sardana says, “If one can’t grow, one will have to find alternative means to exist. It is the entire policy around allocation of spectrum that caused us to look at other means.”

Sardana explains that spectrum means the airwaves through which the communication signals travel. Spectrum is very important for telecom operators. Sardana reveals, “In the Indian situation, we need to keep the aspect of spectrum availability in mind. The spectrum allocation for CDMA operators is only 800 MHz and no extra spectrum is available beyond what is already allocated to us. Since there is no roadmap, it is from that compulsion that one has to look at alternatives to grow.”

One of the CDMA giants, TTSL, along with Reliance Communications (RCOM), took the first step towards the GSM by applying for dual technology licences in late 2007. The TTSL is set to start its GSM operations shortly, while RCom has already commenced GSM services in India.

The TTSL operates under the brand name “Tata Indicom” in several circles of India. The telephony services of the company include mobile, fixed wireless phones (FWP), public telephone booths and wireline services. The company also provides broadband data network and application services including leased lines, DSL, Wi-Fi, ethernet, managed gateway services and web conferencing services. The company has two unified access (basic + cellular) services licences (UASL) – one for Mumbai Metro and the other for the entire Maharashtra and Goa.

Airtel user base swells by 2.8 mn in April

2 Jun 2009, 0142 hrs IST, Durba Ghosh, ET Bureau

NEW DELHI: Leading GSM operators Bharti Airtel and Vodafone Essar have added 2.8 million and 2.7 million subscribers in April, continuing their respective growth momentum. The second-largest mobile operator Reliance Communication added just over 2-million subscribers last month, according to data released by telecom regulator Trai on Monday.

GSM operator Aircel added about 1.1 million new subscribers in April taking its total subscriber base to 19.5 million. Tata Teleservices, a CDMA operator, added about 0.6 million new users in the given month taking its subscriber base to 35.7 million. Idea Cellular and Spice Communications together added a notch over 1-million subscribers in April. State-owned telco MTNL added 47,045 new subscribers in April.

RCOM, the country’s largest telecom operator on CDMA technology platform

, had launched GSM-based services in January with schemes providing free talk time up to Rs 900 and this resulted in its subscriber numbers surging between January-March. The free scheme was taken away by March-end, which resulted in subscriber additions falling in April.

RCOM had outperformed the industry in these three months, it added 5-million new users in January and over 3-million new subscribers in February and March. In comparison, the largest mobile operator, Bharti, added 2.7 million new users

each in January and February 2009 and 2.8 million in March.

RCOM now has a mobile subscriber base of 74.8 million and Vodafone Essar’s total subscriber base stands at 71.5 million, while Bharti Airtel leads with 96.7 million total subscribers. Vodafone Essar also saw a drop of about 0.07 million users in its monthly additions in April and the telco added just over 2.7-million subscribers as against 2.84 million in March.

With this, Bharti Airtel regained the number one position in terms of subscriber additions by a few thousand users as it increased its customer base by 2.8-million users in April.

In March 2009, Vodafone Essar had beaten Bharti Airtel in monthly subscriber additions for the first time. Trai also said that India’s mobile base had crossed the 400-million mark in April, inching close to the target of 500-million users by 2010, set by the Department of Telecom (DoT).

The total wireless subscriber base now stands at 403.66 million, while the total telecom base, which includes that of landline is 441.47 million, Trai added. But, the number of new mobile connections added in April saw a 23% drop compared with 15.64 million new additions in the previous month.

Tata Tele to now enter GSM space

2 Jun 2009, 0151 hrs IST, Rashmi Pratap, ET Bureau

MUMBAI: For the Tatas, offering mobile services on the global system for mobile (GSM) platform is a “compulsion” and not a choice. The absence of spectrum roadmap for code division multiple access (CDMA) operators and the limited allocation of airwaves has forced Tata Teleservices (TTSL), the group’s flagship telecom company, to offer services on the GSM platform as well.

“If one can’t grow, one will have to find alternative means to exist. It is the entire policy around allocation of spectrum that caused us to look at other means,” TTSL MD Anil Sardana told ET.

Spectrum refers to airwaves on which the communications signals travel and it is the raw material for operators. “In the Indian situation, we need to keep the aspect of spectrum availability in mind. The spectrum allocation for CDMA operators is only 800 MHz and no extra spectrum is available beyond what is already allocated to us. Since there is no roadmap, it is from that compulsion that one has to look at alternatives to grow,” he added.

GSM and CDMA are rival technology platforms for offering voice and data services. CDMA heavyweights, Reliance Communications (RCOM) and TTSL, joined the GSM bandwagon by applying for dual technology licences in late 2007. While RCOM has already rolled out GSM services across India, Tatas are slated to start operations in a few weeks.

Incorporated in 1996, TTSL was the first to launch CDMA mobile services in India with a foray into the Andhra Pradesh circle.

“It was a conscious and deliberate decision and it was predicated largely on data capabilities of CDMA. We continue to be committed to CDMA,” said Mukund Govind Rajan, MD, TTSL (Maharashtra), the listed arm of TTSL offering services in Mumbai and rest of Maharashtra.

In March, TTML rolled out ‘Photon’, its high-speed Internet service offering speeds of up to 18mbps. Due to efficient data services, CDMA players witness higher contribution to reveunes from data. For TTSL, data brought in 10% of the revenues in FY08 and it grew to 14% in FY09. For GSM operators, the figure is an average of around 9%.

Dr Rajan said, “I do believe that India is getting ready for many of those data services and the choice of CDMA platform was right, but the other issue of availability of essential raw material — spectrum — has been a question mark.”

According to Mr Sardana, it is often argued that CDMA is more efficient and requires half the spectrum compared to GSM. “But seeing from a shareholders perspective, one has to build double the networks to sustain and that is a cost both in terms of capex and opex. Therefore, efficiency is no arguement; it’s a perpetual pain that is experienced,” he said.

“We spend twice in terms of rollout and its hurts shareholders’ interest. We have discussed it with every government committee that was set up to look into spectrum,” Mr Sardana added.

BSNL scouts for pvt partners for Internet Data Centres

The Hindu Business Line on 31 May 2009

Thomas K. Thomas

New Delhi, May 30 Bharat Sanchar Nigam Ltd has invited bids from private players to set up Internet Data Centres (IDCs) in various parts of the country on a revenue sharing basis.

The centres are expected to be set up over the next six months after which the PSU will go for outsourcing contracts for services such as Web hosting, co-location, data warehousing and Internet managed services.

A data centre is a facility where customer can outsource the management and day-to-day operations of their Web sites or other IP connected applications. Customers can purchase the server hardware, rack space, bandwidth and network equipment. In addition, customers get a secure place to physically house their equipment with regulated power, dedicated Internet connection, security, and fire detection equipment.

Although some companies have chosen to address their requirements in-house and to maintain complete control over their Internet Infrastructure, the pressures of provisioning IT Infrastructure are increasingly leading a lot of corporate houses to consider outsourcing their e-business infrastructure requirements.

Private telecom players such as Reliance Communications and Tata Communications are already offering such services. Then there are Internet Service Providers such as Sify which are also in this segment. These private players may bid for the BSNL project.

According to the expression of interest floated by BSNL, the private partner will have to invest the entire amount required to set up the IDCs. BSNL will provide its national communication infrastructure as the backbone for the proposed centres.

As part of the shared hosting services, BSNL plans to bundle in free email accounts, depending on the package customer subscribes to.

“Outsourcing the management and monitoring of mission-critical Internet operations is crucial for stability in an increasingly complex networking environment. Beyond the sheer complexity of infrastructure itself, the uncertainties of ever-changing relationships with telcos, Internet Service Providers (ISPs), and rapidly changing technologies often render it difficult for businesses to make the best choices. BSNL’s managed services will provide cutting-edge industry expertise to speed up the time-to-market, in the most cost-effective manner,” said a BSNL official.

The PSU is also planning to offer messaging solutions which will enable customers to outsource their entire e-mail operations.

BSNL has been increasingly adopting the public-private partnership model for its new services. It has, for example, partnered with Soma Networks for offering WiMax based broadband services in three States. Similarly, the PSU has roped in HFCL to roll out its IPTV services.

Analysts said that the franchisee model lowers the risk and cost for the PSU since the private partner invests all the money required for the project.

RCOM joins the QIP queue

30 May 2009, 0136 hrs IST, ET Bureau

MUMBAI: Reliance Communications (RCOM) has joined the list of companies planning to raise funds through the Qualified Institutional Placement (QIP) route.

The country’s second-largest mobile service provider said on Friday that it will seek shareholder approval to garner funds from qualified institutional investors.either through a share sale or an issue of a variety of instruments including fully convertible, partly convertible or non-convertible debentures with warrants or any other security, it said in a statement to the stock exchanges. Although the company did not say how much it planned to raise sources close to the development said it may be around $500 million.

RCOM said the funds will be raised in one or more tranches. The proposed exercise shall not result in increase in the company’s paid-up capital by more than 25%, it said. RCOM said the funds may be utilised to finance the company’s plans to participate in the upcoming auction of frequency spectrum for 3G and Wi-Max services. A banking source said Reliance Infrastructure, another firm which is part of the Anil Dhirubhai Ambani Group (ADAG), may also opt for a similar exercise. A spokesperson for the group, however, denied any QIPs by RCOM and R-Infra when ET had sent him a query on last Friday.

FRC 101: RCom’s New Scheme For GSM Subscribers

On www.efytimes.com on 29 May 2009

Friday, May 29, 2009: Reliance Mobile GSM Service has launched a new FRC priced at Rs 101 for all new GSM subscribers in Karnataka. The Rs 101 FRC is bundled with a core talktime of Rs 75 along with additional 100 local SMS with a validity of 30 days.

The launch of Rs 101 FRC is part of Reliance Mobile’s ongoing Customer Experience Programme. This offer provides special tariff to its subscribers offering calls to any Reliance Mobile GSM and CDMA at 30 paise/min, calls to other network at 60 paise/min and STD calling at Re 1.

The new Rs 101 FRC also offers Reliance Mobile GSM subscribers night calling to Reliance GSM or CDMA network at 5 paise/min applicable between 11pm and 6am. This FRC 101 is available until the end of June.

RCom may rope in Hrithik as brand ambassador

From Financial Express on May 29, 2009 at 1734 hrs IST

New Delhi: Anil Ambani-led Reliance Communications is planning to launch a Rs 150-crore advertising campaign for its nation-wide GSM services and is believed to be on the verge of signing Bollywood star Hrithik Roshan as its brand ambassador.

According to sources, Reliance Communications is planning a Rs 150-crore media campaign for its GSM services featuring its new brand ambassador, Hrithik Roshan.

Sources said the company is in the final stages of signing an endorsement deal with Hrithik, who would be the official face for the company’s mobile, data and DTH businesses.

When contacted, the company spokesperson declined to comment.

The three-year deal with Hrithik is believed to be worth over Rs five crore annually and excludes the fees payable for appearances and events, sources said adding the overall deal could touch Rs 10 crore annually. The new campaign is expected to be on air in the first week of June.

This is Reliance Communications’ first advertising campaign for its GSM service, which was launched on commercial basis in January 2009 and has since then added over 13 million subscribers.

India is 2nd-largest CDMA market

29 May 2009, 0004 hrs IST, ET Bureau

MUMBAI: India has become only the second country in the world to have more than 100 million CDMA-based (code division multiple access) mobile phone subscribers after the US, which has 157 million CDMA users, according to an industry body.

While India overtook China to become the second-largest CDMA market, the country’s leading service provider Reliance Communications (RCOM) has become the second-largest CDMA service provider behind the USA’s Verizon Wireless, the CDMA Development Group (CDG) said here on Thursday. Tata Teleservices is ranked fourth in the list of top global players, behind China Telecom.

It took CDMA, which competes with the GSM (global system of mobile communication) platform globally, six-and-a-half years to reach the 100 million mark in India after being introduced in December 2002. GSM is much more popular, accounting for 80% of the global market, according to its promoter GSM Association. While there are 475 million CDMA users in the world, GSM standard is being used by over three billion people. In India, the GSM user base is close to 300 million.

CDG executive director Perry LaForge attributed the rapid growth of CDMA users in India to a wide selection of affordable devices and technologies offering CDMA voice and data services in urban and rural areas. “CDMA allows a rich telecom experience, especially on the data side, and we are confident that experience will only get better, especially as 3G arrives and we are able to unleash the full potential of applications and services,” Tata Tele MD Anil Sardana said.

In March 2009, both RCOM and Tata Teleservices launched high-speed mobile broadband services. “As we look to the next 100 million subscribers, CDMA mobile broadband is already satisfying the demand for affordable high-speed wireless data services while CDG initiatives will further increase the selection of CDMA voice and data devices,” Mr LaForge said.

Qualcomm, the makers of the CDMA standard, will bring the benefits of advanced CDMA technologies to India, its senior vice-president (India and South Asia) Kanwalinder Singh said.

BSNL readies $10-b war chest for overseas buys

From The Hindu Business Line on 29 May 2009

Our Bureau
New Delhi, May 28 Following moves by private telecom players to acquire international operators, State-owned Bharat Sanchar Nigam Ltd is readying a $10-billion corpus for its own global ambitions.

The company is scouting for a consultant to advise the PSU on the international plan. The PSU has also set up a separate business unit under a General Manager ranked officer to look aggressively for opportunities in foreign markets. While the other telecom PSU, Mahanagar Telephone Nigam Ltd, has invested in a few international markets such as Nepal and Mauritius, this is BSNL’s first real move to go beyond India. Though the company had expressed interest to bid for licences in Tunisia and Oman earlier it did not go through with the plan.

According to BSNL officials, the company is open to all forms of investments including merger, acquisition, strategic partnership, or buying new telecom licences for starting greenfield operations. While the company is looking for opportunities across all geographies, it is more interested in the African and Middle East markets.

BSNL sources said the acquisitions will be funded from the company’s cash reserves. The money raised through a possible IPO could also be used for the international move.

The biggest fixed line player in India with 35 million subscribers. BSNL is the fourth largest mobile operator after Bharti Airtel, Reliance Communications and Vodafone Essar. Most of the other big players in the country already have some investments in the international market.
BSNL’s revenues have been dipping the past few years owing to high competition and low margins.

BSNL would be among the few government-owned companies worldwide looking to go beyond their domestic turf. Chinese telecom operators are also targeting operators in the African continent.

According to analysts, BSNL has the advantage of operating in a low-cost market such as India. It could replicate the low-margin, high-volume business model in other emerging markets such as Africa.

BSNL has the experience of operating millions of rural telephone lines. Most African countries are similar to India in terms of the large rural population. BSNL also has about three lakh employees who can be deputed to manage networks of international operators post a successful foray.

Pointer to the future (Bharti-MTN deal)

On The Hindu Business Line on 29 May 2009

Thomas K. Thomas
The merger talks between Bharti Airtel and South African telecom company, MTN, is a pointer to an emerging trend in the Indian telecom growth story. Saturated urban markets, declining average revenue per user, tighter domestic acquisition laws and the desire to achieve global scale are driving Indian telecom operators to other emerging markets.

That the largest and most profitable mobile operator in the country is looking for markets elsewhere in the world is a clear indication that there is not much juice left in the Indian telecom market. This is similar to what Vodafone went through in the earlier part of this decade, when it decided to move out of its traditional, but saturated, European market to other emerging markets.

Growth rate
A recent report from the Department of Telecommunications leaves no ambiguity on what the policy-makers think about the future growth prospects of the Indian cellular market. The report states that though the mobile subscriber base is increasing at a scorching pace, the growth rate will taper off by the end of next year.

Using the S curve model of growth, the DoT has projected that the telecom sector will reach an inflexion point (the point at which maximum growth rate will occur) when the mobile density reaches 44 per cent. Considering that the current tele-density is close to 35 per cent, it is expected that the inflexion point will be reached by the end of 2010, after which growth rate of mobile subscription is expected to decline.

In addition, Indian operators have been struggling with falling monthly billings because the new additions are coming from semi-urban and rural areas where subscribers are not willing to spend more than Rs 100-Rs 200 a month on mobile usage. Therefore, even though the mobile user base is expected to increase from 400 million at present to 900 million by 2013, operators are not betting on a proportionate increase in revenue generation.

Mouth-watering proposition
In comparison, other emerging markets such as Africa, Latin America and West Asia offer a mouth-watering proposition. These markets are at the point where India was in 2003. The telephone penetration levels there are low which means huge potential in terms of higher subscriber addition. The African telecommunication market, for example, is estimated to grow at roughly 40 per cent and is expected to continue to show higher growth for much longer period after the Indian market stagnates.

Also, the average revenue per user is much higher at Rs 600 in these emerging markets compared to Rs 250 in India. By foraying into such territories, Indian companies can hope to cash in on higher margins.

The domestic merger and acquisition norms have also made it impossible for existing telecom companies such as Bharti and Reliance Communication to acquire other large operators within India. On the other hand, a deal with South Africa’s MTN will give Bharti access to nearly 100 million subscribers across 21 countries.

However, Indian companies also have to deal with challenges related to higher cost of acquisitions, different regulatory environments and competition from European and Chinese telecom majors which are also eyeing these emerging markets.

Mixed success
So far, Indian players have had mixed success in their attempts to go global. While Bharti Airtel, Tata Communications and Reliance Communications have had a fair share of success in the long-distance segment through acquisition of cable networks, including Tyco Global and FLAG, they have failed to acquire telecom licences in countries such as Qatar, Kenya and Saudi Arabia. The reason for the partial success has primarily been the pricing of the acquisitions. Most of the successes for Indian telecom players have come in cases where the deal came cheap.

For instance, both Tata Group and RCom acquired Tyco Global and FLAG respectively when the global undersea cable market was facing a bandwidth glut. In 2004, Tata paid just $130 million to acquire Tyco Global Network, which had 60,000 km of cable spread across three continents. Similarly, Bharti bagged licences for Seychelles in 1998 when mobile services were just beginning to reach consumers.

Competitive bidding
However, Indian telcos have lost out whenever competitive bidding has taken place. For example, Bharti and Reliance lost out in the race to acquire a licence in Saudi Arabia after Kuwait Mobile Telecom Company bid a whopping $6 billion. Indian operators also lost out to France Telecom when 51 per cent of Telkom Kenya was up for grabs. France Telecom coughed up nearly $400 million for 2.8 lakh fixed-line telephone subscribers.

Since Indian operators are already working on thin margins, given the low tariffs in the country, they cannot afford an expensive buy to maintain profitability. The other reason is that home-grown operators are still small in scale compared to global giants such as Vodafone, giving them a lesser chance of winning a competitive bid.

One advantage that Indian operators have is that they have mastered the game of working on high volumes, building economies of scale, and cost management through innovative outsourcing deals and infrastructure-sharing agreements.

Bharti’s talks with South African major MTN, if successful, will take the low-cost business strategy to a new level. Markets such as Africa are also similar to that of India — predominantly agriculture-based with a large rural population — which again works to the advantage of Indian operators. The Bharti-MTN deal, therefore, could show the way to other Indian players.

Companies such as Reliance Communications, MTNL and BSNL have been eyeing countries such as Tunisia, Egypt, CIS and the Gulf region to expand their footprint.

For a company such as MTNL, foreign markets offer an opportunity to go beyond Delhi and Mumbai. The PSUs profits have been dipping over the past few years and the company is, therefore, betting big on the foreign telecom forays.

Showing the way
But the window of opportunity is closing fast. Most of the emerging markets in the African continent, for instance, are already controlled by European players such as Vodafone and France Telecom. The Bharti-MTN deal would create a most formidable rival there. Other Indian operators looking for a similar deal still have options such as Kuwaiti-based Zain, which is in 24 markets across Africa and West Asia and may be a bid target. The Egypt-based Orascom, which has operations in 11 countries, could be another possible partner. Then there are regional players such as Telekom SA, which may be open to a possible alliance. Partnering with an Indian company will also give these foreign operators a foothold into the fastest growing market in the world.

Bharti Airtel’s $23-billion deal with MTN, if successful, may spark the consolidation of mobile phone markets across Africa and West Asia. But Indian operators may have to move fast if they want to continue the telecom growth story.