India’s telecom sector earnings to cross $30 bn by 2013: Gartner Inc

From www.economictimes.com 18 Jun 2009, 1454 hrs IST, IANS

NEW DELHI: India will continue its robust telecom story with the sector’s revenue to be more than $30 bn by 2013, according to a global information technology research and advisory firm.

“Total mobile services revenue in India is projected to grow at a compound annual growth rate (CAGR) of 12.5 percent during 2009-2013 to exceed $30 billion,” the US-based Gartner Inc said in a statement Thursday.

According to Gartner, the telecom subscriber base is expected to cross 770 million connections by 2013, growing at a CAGR of 14.3 percent from 452 million in 2009.

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

“Growth will also be triggered by increased adoption of value-added services, which are relevant to both rural and urban markets,” Gupta added.

Mobile market penetration is projected to increase from 38.7 percent in 2009 to 63.5 percent in 2013, Gartner said, and attributed it to three factors: increased focus on the rural market, entry of consumer durable and electronic companies into the mobile handset segment, and cheaper handsets.

The number of people with prepaid connections, who accounted for 93 percent of the subscriber base in 2008, will continue to swell to exceed 96 percent by 2013, surpassing 740 million.

The postpaid subscriber base will exceed 29 million subscribers by 2013, growing 2.5 percent from 2008, Gartner said.

It also predicted the churn rate – the rate at which a subscriber switches from one operator to another – to cross 59 percent in 2013 from 53 percent currently.

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

DoT seeks Rs 3000 cr support for BSNL- Telecom-News By Industry-News-The Economic Times

17 Jun 2009, 0302 hrs IST, Joji Thomas Philip, ET Bureau

NEW DELHI: The communications ministry has sought an allotment of Rs 3,000 crore from the finance ministry for supporting BSNL’s wireline networks that were set up before April 2002. The DoT wants the amount to be sanctioned in the budget.

This is to compensate the state-owned telco for losses during the last fiscal after telecom regulator Trai had done away with access deficit charge regime from April 1, 2008. Prior to that, all telcos were paying 0.75% of total revenues towards ADC, which was used to support BSNL’s unviable fixedline operations in rural India. In 2007-08, BSNL got Rs 2,000 crore as ADC.

But, when hanging up on ADC, the regulator in a bid to address the concerns of BSNL , which had warned that it would be forced to discontinue all its rural fixed-line operations if the levy were to go, recommended that the government give it a subsidy of Rs 2,000 crore per annum for the next three years from the Universal Obligation Fund (USOF).

All telcos pay 5% of total revenues towards the USOF, which is dedicated to improving communication facilities in rural India. Unutilised amount in the USOF is at over Rs 20,000 crore. In March 2009, BSNL and DoT had signed an MoU to provide the state-owned operator a subsidy of Rs 6,000 core over the next three years from this fund to sustain its rural operations.

In fact, BSNL had even dragged the regulator to the telecom tribunal, but the latter refused to issue a stay on the matter. Trai had however, justified its move to do away with the ADC regime on the grounds that the total support provided to BSNL over the last couple of years under various initiatives which includes reimbursement of licence fee and spectrum charges, moratorium on payment of interest, support from Universal Service Obligation Fund(USOF), ADC funding and exemption on entry fee was about $8 billion (Rs 31,500 crore), while adding that the PSU cannot be supported in perpetuity.

In a bid to give further relief to BSNL, last year, DoT also exempted telcos from paying licence fee on fixedline telephony from licence fee enabling the state-owned operator to save Rs 1,200 crore annually.

via DoT seeks Rs 3000 cr support for BSNL- Telecom-News By Industry-News-The Economic Times.

The Hindu Business Line : Seminar on rural telecom

via The Hindu Business Line : Seminar on rural telecom, Chennai, June 17

The first big revolution in rural telephony happened when STD booths were set up across the country, including in remote villages. Mobile telephones have taken rural India by storm. This mobile revolution is changing the way marketers can connect with their rural audience, according to the Rural Marketing Association of India. It says that a bulk of the anticipated growth in the telecom subscriber base will come from rural India because of the infrastructure support from the Government and aggressive marketing strategies of service providers and handset manufacturers. It is in this context that the association is organising a seminar on `Rural telecom’ in Delhi on July 3.

According to the association, the seminar will help learn from approaches adopted by different stakeholders and debate on how best to design and implement telecom solutions. Dr J.S. Sharma, Chairman, Telecom Regulatory Authority of India, is expected to deliver the keynote address at the seminar, which will see the participation of representatives of service providers and handset manufacturers. – Our Bureau

Nokia intros phones for farmers

From www.ciol.com on June 15, 2009, source PTI

MUMBAI, INDIA: Leading mobile phone maker Nokia has launched cellphones, which will help farmers get instant information on farm prices in ‘mandis’.The company claimed that the new phone could display information in two languages and offer graphically rich user interface.

The company will be selling the devices first in Maharashtra and later to other states as also to select countries in Asia and Africa, officials said today.

The new devices costing about Rs 2,000 will also help users access education and entertainment services. Agriculture service will contain information on seeds, fertilisers, pesticides, market prices and weather.

The content will be available for Rs 30 to Rs 60 per month depending upon the information availed.

Nokia India Managing Director D Shivakumar said the company has tied up with Idea Cellular to offer the service and is talking to other mobile operators as well.

(Please see also story on Nokia Life Tools)

Nokia Life Tools Launched In India!

From www.efytimes.com on June 12, 2009

Friday, June 12, 2009:  After a successful pilot in Maharashtra, Nokia has commercially launched Nokia Life Tools service in India. The service will be rolled out first in Maharashtra in association with the Maharashtra State Agricultural Marketing Board (MSAMB). Designed specifically for the emerging markets, Nokia Life Tools is a range of agriculture, education and entertainment services addressing the information gaps of target consumers.

The Nokia Life Tools Agriculture service offers consumers a choice of 2 plans. The basic plan, available across India at Rs 30/month, provides daily weather updates and relevant agriculture-related news, advice and tips. The premium plan, at Rs 60/month, will be available in 10 states, including Maharashtra, and provides the closest market prices for three crops chosen by the subscriber, as well as weather, news, advice and tips.

Nokia is collaborating with Reuters Market Light (RML), which was the exclusive provider for agriculture services in the successful pilot.http://www.thehindubusinessline.com/2009/06/16/stories/2009061651990400.htm

The Nokia Life Tools Education service, available throughout India, offers three components: Learn English, with basic, intermediate and advanced levels; Exam preparation, which offers students tips and advice for ICSE, CBSE and state board-level exams mapped to the relevant curriculum; and general knowledge. Each of the education services will be offered at Rs 30/month.

The Nokia Life Tools Entertainment service at launch will include astrology, news, jokes, cricket and ringtones, offered at existing market prices.

Nokia signed an MOU with the MSAMB, under which MSAMB will provide expertise in the areas of commodity prices from their network of 291 local mandis (marketyards). MSAMB will also have the opportunity to deliver news, alerts on schemes and other information directly to grassroots consumers.

Speaking at the occasion, Ashok Chavan, chief minister, Maharashtra, said, “We are happy that Maharashtra is the first state in India to go live with the Nokia Life Tools services in association with the state marketing board. Empowering our people with the right tools and facilities is a top priority for the state government. I would like to congratulate Nokia for developing a unique and innovative service that has tremendous potential to improve lives and the livelihood of farmers and sub-urban consumers in Maharashtra.”

Harshavardhan Patil, minister, co-operation, marketing, cultural affairs and parliamentary affairs, commented, “It has been the Maharashtra state government’s endeavour to provide vital agri information tools for a progressive and an empowered farmer community. Nokia Life Tools is tailormade to positively impact farmers across the state. This MOU further strengthens MSAMB’s mandate to get the information directly to the farmers.”

“Nokia Life Tools was a result of the entire ecosystem coming together and is ideally placed to usher in an information revolution impacting the daily lives of people,” added D Shivakumar, managing director, Nokia India.

The complete Nokia Life Tools solution will be available on the newly launched Nokia 2323 classic and Nokia 2330 classic devices, and will be later expanded to other Nokia devices.

Nokia Life Tools service will be expanded to select countries across Asia and Africa later in 2009 and beyond.

Related stories at

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

VAT hike on handsets may bring in less tax for state

8 Jun 2009, 0003 hrs IST, Rashmi Pratap, ET Bureau

MUMBAI: The decision of the Maharashtra government to hike VAT (value-added tax) on mobile handsets could actually result in a drop in the state’s VAT collections, says Indian Cellular Association, the industry body for handset manufacturers.

In the state budget, the government last week proposed to increase VAT to 12.5% from 4% on mobile handsets without making the revenue targets from the move public.

According to ICA, the proposed hike in VAT will result in handset sales falling in the organised retail sector in Maharashtra. It is currently at 1.25 crore units annually and could reduce to as low as 8 lakh units. With reduced sales, the estimated VAT collection will also be down from Rs 168 crore annually to Rs 33.5 crore, as per ICA estimates.

Over a three year period, the Maharashtra government will lose around Rs 475 crore in revenue, if it imposes the proposed hike in VAT on mobile phones. The move will trigger increased grey market sales and could expose customers to phones of dubious quality. “A common man, who buys a Rs 1,500 entry-level phone will now have to pay Rs 127 more.

Our experience shows that Rs 30 is the point at which the consumer turns away from the official market to the grey market. If the proposal is implemented, retail outlets will be under pressure,” ICA national president Pankaj Mohindroo told ET. ICA has also written a letter to Maharastra chief minister Ashok Chavan requesting the government to take a closer look at the issue. Importantly, Maharashtra is the only state in the country to have a 12.5% VAT on mobiles — it is 4% in other parts of India.

According to industry estimates, Maharashtra has about 20,000 retailers and over 450 distributors. Over 1.5 lakh people are employed. “If the grey market resurfaces, the employment in the industry will be hurt, Mr Mohindroo said.

Infiniti Retail CEO & MD Ajit Joshi said at a time when mobile phone penetration was increasing, even in rural areas, such a step would not be viewed as positive.

“The government’s aim of taking broadband to rural areas will not be met, if handset prices go up due to the increase in VAT because Indian consumers are extremely price sensitive,” he said. Infiniti, a 100% subsidiary of Tata Sons, owns and runs the Croma chain of consumer electronics and durables. “Also, the government has clubbed mobiles with liquor and cigarettes, which also attract a 12.5% VAT. However, mobile is a tool for connectivity and not a luxury item,” Mr Joshi said.

Rajiv Agarwal, CEO of Essar-owned The MobileStore, said telecom is an essential part of the India growth story and has a direct connection with development. “One state having a differential VAT will create an anomaly. People will buy from neighbouring states and sell here. It is not beneficial for customers, who want warranties,” he said. He added that the decision was not one that augured well for the industry.

See also: Handsets: Maharashtra Organised trade to feel the heat at http://telcobizpedia.wordpress.com/2009/06/15/handsets-mahar…-feel-the-heat/

 

BSNL and Novatium launch BSNL-NOVA netPC service

Source PTI From Hindustan Times on 06 June 2009

The Bharat Sanchar Nigam Limited (BSNL) on Saturday launched the BSNL-NOVA netPC service in association with Novatium Solutions Pvt Limited of Chennai to enable Internet browsing on BSNL Boradband without owning a PC.

Addressing media persons here TN Sudhindra Kumar, CGMT, said,” this unique facility will provide maintenance free computing experience to customers. BSNL subscribers now need not worry about hardware crashes, virus attacks, data loss and regular upgrades”, Kumar said.

He said now these would be taken care of by a remote server client-computing model maintained by Novatium.

The service would increase the broadband penetration and decrease the digital divide in India by making broadband and Internet available to rural customers also in large numbers, he said.

He said that it would cost both BSNL and NOVA net PC Rs 2999 plus taxes with a monitor and the monthly subscription including BSNL broadband charges starting from Rs 274 plus tax.

Rural telecom connectivity set to get a stronger line

5 Jun 2009, 0101 hrs IST, ET Bureau

NEW DELHI: The government plans to connect every panchayat to a broadband network in the next three years and increase phone usage in rural India four-fold in five years, so that two out of every five villagers own phones, President Pratibha Patil told Parliament on Thursday. The measures will be part the Bharat Nirman programme for improving infrastructure in villages.

As of April end, rural India, which houses more than two-thirds of India’s population, had less than one-third of the country’s 430 million telephone connections.

The plans to improve rural connectivity will most certainly result in increased allocation from the Universal Service Obligation Fund (USOF) for setting up telecom infrastructure in interior India.

Since 2002, all telecom operators have been paying 5% of their annual revenues towards this fund and so far, the unutilised amount in this fund has crossed the Rs 25,000 crore. The communications ministry will soon invite bids for setting up over 7,000 telecom towers in rural areas with support from the USOF.

The new government also plans to use a part of this fund for augmentation of the optic fibre cable network across the country to enhance broadband connectivity. Interestingly, India’s booming mobile phone industry is attracting more new users in rural areas.

India will get next 400 million mobile users five times faster

From The Hindu Business Line by Thomas K Thomas on 04 June 2009

Thomas K Thomas

New Delhi, June 3 It took 15 years for India to get 400 million mobile users, but under three years it will add the next 400 million.

According to the revised estimates by the Cellular Operators Association of India, the mobile subscriber base is expected to zoom to 893 million by 2012. That is 150 million more subscribers than what was projected earlier. The COAI’s earlier estimates had put the mobile user base at 743 million by 2012.

The reason for the new optimism is derived from the huge uptake of mobile services in rural areas.

Explains Mr T. V. Ramachandran, Director-General, COAI: “We have revised the projections because the rate at which infrastructure is growing is faster than what we had expected. Operators are moving into the hinterland and uncovered areas. Secondly, we are getting almost 50 per cent of our new additions from the rural areas. The third factor is that the level of competition has increased with new players in the sector which again leads to faster deployment of networks.”

According to Mr Atul Bindal, President, Mobility, Bharti Airtel, three out of five new subscribers are now coming from non-urban areas. “Indian growth story is here to stay. I will push back against any view that says to the contrary. There is still a huge untapped market in both rural and urban areas,” says Mr Bindal, who expects Airtel to get its next 100 million users in another two-three years.

India, with 400 million mobile users, is now the second largest market in the world after China which has over 650 million subscribers. According to COAI’s projection, there will be 1.24 billion mobile users in 2015 – which means one phone for every Indian.

GSM broadband users

Our Mumbai Bureau reports: India could have 100 million mobile broadband users on the GSM platform by 2014, if the 3G auctions happen during the current fiscal, according to the GSM Association. Overall broadband penetration in India is 4.7 per cent now.

3G investments would lead to economic benefit worth around $70 billion, Mr Jaikishan Rajaraman, senior director, GSMA, said at a press meet here on Wednesday.

The delay in the auction of 3G spectrum in the past two years has led to a huge loss of around $16 billion, according to a study by global consulting firm LECG Corp.

The losses include direct investments as well as those arising from missed opportunities.

“Cost of capital increases whenever you choose to defer investments,” said Mr Rajaraman.

Interview — CDMA is better than GSM: Sistema Shyam

From http://www.ciol.com on 01 June 2009

BANGALORE, INDIA: Indian telecom sphere is all set to witness a tug of war with six new international telecom players set to enter the scenario.

Sistema Shyam Teleservices, a joint venture between Russia’s Sistema and India’s Shyam group, the only CDMA (code division multiple access) player of the lot, recently launched its services in West Bengal.

During an interview given to CIOL, Vsevolod Rozanov, president and CEO, Sistema Shyam TeleServices, said that CDMA is a better technology than GSM because it enables better utilisation of the frequencies available, and thus helps in bringing down the costs. Excerpts:

CIOL: The Indian metros and urban areas have attained saturation in terms of telecom density. So where do you see the demand coming from and for what?

Vsevolod Rozanov: If we have to grow fast, apart from expanding our footprint in new circles and getting new customers (first-time users), we have to wean away customers from the incumbents.

We believe there is a huge market for us to grow. While there are players who have the first mover’s advantage, there is still a vast chunk of existing individual users who will find higher value for money in our tariff and billing plans.

CIOL: What are your investment plans for India? What will be the focus?

VR: We plan to invest $5.5 billion in India over a period of five years. We will utilize most of this projected investment over the next two years for setting up infrastructure that will enable accessibility and better connectivity for mobile phone users.

We have already invested more than $1 billion in setting up our network. We have launched the brand in Rajasthan, Tamil Nadu, Chennai, Kerala and Kolkata. We are planning to launch services in Delhi by Q3 this year, and looking to foray into one circle every month.

We will eventually cover UP, Haryana and Maharashtra circles by the end of this calendar year. Thus, in the next nine months, the MTS brand will be seen in half of the 22 telecom circles across the country, achieving a pan-India footprint by mid-2010.

CIOL: Do you see a possibility of M&A going forward to meet the increased challenge? What is your take on infrastructure sharing among service providers to combat frequent network disruptions owing to issues like natural disasters?

VR: We are not aware of any significant player in the CDMA segment in India who is planning to hive off its telecom business.

We will have a combination of self-owned and shared infrastructure to ensure that we provide the best connectivity across the country. We already have tie-ups and agreements with various infrastructure companies across the country to ensure superior quality of service.

CIOL: How different will be your ‘go-to-market’ strategy?

VR: In Rajasthan, the key message of our campaign is to create a churn in the market through the slogan, “Badlo life ka plan” (change your life’s plan).

Today over 50 per cent of our subscribers in Rajasthan are not new customers, but those who have switched over from other mobile service operators. They are doing so because they are frustrated with the quality of the old incumbent networks, and are willing to try our non-congested network.

We do not see much difference between GSM (global system for mobile communications) and CDMA. Customers using CDMA technology are approximately one quarter of all. Given the size of the Indian market, this is not small at all.

We have been looking at whether we should wait until we are fully ready with CDMA data offerings or we should start building our customer base and deliver our data offers a bit later. We decided to go in for the second option. We will be coming out with the data offering soon.

CIOL: With several service providers in the frame, will the cost of service be brought down further?

VR: India is a highly price sensitive market. Our pan-Indian strategy will focus on simplicity in all our marketing strategy. We will offer simple, very clear and understandable tariff plans for our customers. Our tariffs will be the lowest, with no hidden charges.

We have dropped the price of entry-level colour phones to Rs 999, and they come with six months of free calls and lifetime validity. The subsidy that we incur on every phone is going down as the price of phones is going down faster than the fall in new offers.

We will offer SMS at 50 paise unlike most other operators who charge one rupee. The tariffs can fall further, if the regulator makes the termination charge cost-based, which would be less than 10 paise a minute from the current 30 paise, the same can be passed on to customers.

CIOL: How do you see advanced mobile technologies – such as 3G, CDMA – gaining currency in rural areas as well, especially when India has very less wireless penetration?

VR: The advanced mobile technologies such as 3G have the potential to meet the digital divide between rural and urban India by penetrating into far-fetched areas, where fixed-line connectivity is sparse due to high deployment cost of infrastructure. 3G will not only alleviate the existing level of voice-based services, but also make Internet broadband access a reality for larger population.

3G will also fit well into the urban user’s plan. It will enable quality voice and address the pent-up demand for high-bandwidth data exchange on mobile phones and support high-speed Internet access on other portable devices.

The government has recognized 3G as the cornerstone for growth of the telecom sector and is expected to allocate the third generation on priority.

CIOL: What is being done to take the brand into the market?

VR: MTS is the eighth-largest telecom company in the world with over 100 million customers. In India, we are the sixth or seventh operator. We are using faces of models talking on the mobile phone to relate to the consumers and give our service the human touch. We have also decided to concentrate most of our advertising and marketing spend on local media, via regional language instead of English.

We have also recently rebranded our existing operations in Rajasthan, under the ‘Rainbow’ brand, to MTS. Rainbow was a regional brand limited to Rajasthan and what we needed was a pan-India brand name. Accordingly we painted the Pink City Jaipur to red – the colour of our brand.

The most important factor is the time-to-market – how quickly we could launch the brand across India in the next nine months. With MTS, the brand material, logo and specifications are all readymade and already available

CIOL: How do you look at the slowdown?

VR: Global economic slowdown is a business challenge for enterprises across the globe. However, Sistema is one of the largest public diversified corporations in Russia. We have sufficient funds to expand our operations, and launch our services on a pan-India basis.

India is one of the fastest growing markets for telecom, and has been relatively un-impacted by recession. As of now, the situation is under control, because the financial meltdown has not impacted Indian banks in a major way.

However, if the situation worsens, then we could be in a spot as we are not allowed to bring in foreign funds in the form of debt. We are allowed to bring money in the form of equity, but our promoters would like to have the flexibility to decide on what form they would like to pump in money into the company.

The Indian Government should consider relaxing the foreign investment norms, which will allow international players to bring in funds in the form of loan.

CIOL: What would be the newer trends in the Indian mobility sector?

VR: The year 2009 is expected to be an exciting year for the Indian mobile telephony market. With the Congress-led UPA (United Progressive Alliance) voted back to power, the sector can look forward to speedy auction of the long-awaited 3G spectrum.

A significant portion of the rural population will witness phased growth in first-time Internet access and welfare programs covering telemedicine, e-governance and distance learning – propelled by 3G mobile broadband and WiMax.

While the 3G network would infuse better services for subscribers and enhance revenues from VAS (value-added services) for operators, the introduction of MNP will offer users the convenience of retaining their mobile phone number even after switching between networks and operators.

Mobile payment and commerce for micro-transactions is also expected to attract greater user-orientation.

Interview — Bharti Airtel hopeful of 200-m user mark in 3 years

On The Hindu Business Line dated 03 June 2009

Thomas K. Thomas

New Delhi, June 2 To keep its leadership position in the fastest growing mobile market, Bharti Airtel is embarking on a multi-pronged strategy, including a comprehensive customer retention programme, partnerships with companies that offer mobile entertainment and commerce services, domestic acquisitions and a thrust on driving growth in the rural areas.

In his first interview after taking over as the President of Bharti’s mobile business, Mr Atul Bindal, told Business Line, “I do not agree with those who say Indian mobile growth story is on the verge of getting over. We will reach the next hundred million subscribers by a combination of reaching out to the huge potential that exists in the rural areas, taking advantage of the untapped opportunity in large urban areas and possibly through the organic route which we will evaluate as when opportunities come by.”

Bharti crossed the 100-million mark in May and is hoping to reach the 200-million mark in another two-three years.

Number portability

Asked on the impact on Bharti of new players and introduction of mobile number portability (MNP), Mr Bindal said the company has put in place a customer life-cycle management system which will enable it to take customer services to the next level.

“At present most operators are looking at a few broad consumer segments to create offering and services around them. We are going to take this to the next level wherein Bharti will target micro segments of subscribers to offer customised services. For example, a subscriber who travels a lot to a particular country would like to get a special international roaming tariff. The system will allow us to target products based on the user’s behaviour rather than launch broad mass offerings,” Mr Bindal said.

He added that MNP is an opportunity for Bharti to acquire customers from other operators.

Mr Bindal reckons that mobile commerce and mobile entertainment are going to be big applications.

“Value added service the way we know today is going to change drastically. We are giving a huge thrust to music, games, movies and sports under mobile entertainment wherein we plan to be an end-to-end service provider. We will also enable application providers to use Bharti’s network as a conduit to reach our subscribers. In m-commerce, we are looking at the unbanked segment and micro-finance in a big way,” he said.

Asked if Bharti was open to tie-ups with companies such as Nokia, which also is launching an entertainment platform, Mr Bindal said that such partnerships were possible.

Acquisition plan

He also did not rule out the possibility of Bharti acquiring small companies offering value-added services or a technology that will add to its business model.

“Bharti has always been in favour of strategic partnerships and alliances as long as it offers a compelling value proposition to our customers,” Mr Bindal said.

3G-WIMAX : Simplifying the future

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

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

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

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

3G Billing Process

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

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

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

Easier Manageability

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

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

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

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

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

Data Matters

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

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

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

Looking Ahead

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

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

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

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

Interview — ‘Number portability will benefit Idea in new markets’

By Ashok Kumar in Financial Express on 02 June 2009

New Delhi: Speaking on the sidelines of a press conference to promote the upcoming IIFA awards, Pradeep Shrivastava, Chief Marketing Officer, Idea Cellular in a short conversation with IndianExpress.com tells, how Mobile number portability (MNP) on mobile phones will be both a challenge as well an opportunity for the service providers including Idea.

Talking about the impact of Number Portability on Idea Cellular, Shrivastava said, like any other company, the new regulatory provision of ‘number portability’ will be a challenge in the existing markets for all the service providers including Idea.

But, Shrivastava sounded positive about the impact of the measure on the new markets as he asserted, “In the new markets Idea will benefit from the number portability.”

Talking about the growth prospects for the company, in the already saturated telecom market, Shrivastava stated that the penetration in the rural markets is way behind the national penetration which stands in the range of 35 percent. “In the rural markets, the penetration of the mobile phones, industry wise, is still in single digits, which leaves us with enough scope for an impressive growth in future,” Shrivastava opined.

“Even in markets like Chennai where we (cellular operators) have a hundred percent penetration, the introduction of value added services spreads an impressive canvass for our company to grow,” Shrivastava clarifies.

Terming the Network and the pricing competitiveness as the hallmarks of Idea Cellular, Shrivastava feels it is the emotional connection of the brand with its millions of customers which separates it from the rest of the service providers.

Govt to step up rural wireless connectivity

29 May 2009, 0050 hrs IST, Joji Thomas Philip, ET Bureau

NEW DELHI: The communications ministry has drawn up detailed plans to spend part of the Rs 25,000 crore in the Universal Service Obligation Fund (USOF).

The plans include setting up over 5,500 telecom towers in far flung areas, providing wireline broadband connectivity to all rural kiosks, rolling out WiMAX services in rural India, augmenting the optic fibre cable connectivity of the country and funding technology innovations.

From 2002, all telecom operators have been paying 5% of their annual revenues towards this fund, and so far, the unutilised amount in the USOF has crossed the Rs 25,000 crore.

Every consumer, who makes a phone call (mobile and landline) contributes towards the USOF. It has been a long pending demand of the industry to reduce or do away with the levy especially since studies by sector regulator Trai has shown that it would not cost more than Rs 12,000 crore to connect the whole of rural India.

The department of telecom (DoT) will soon invite bids from companies who run long distance networks where the government will fund up to 40% of the optic fibre expansion plans of successful bidders.

All telcos have long distance arms that carry STD traffic on optic fibre. An STD call on the mobile is first carried to the nearest telecoms tower and transferred along the optic fibre to the tower that is closest to the person who receives the call. But, telcos who receive support from the USOF for setting up towers and laying fibre must compulsorily share their infrastructure with other operators.

The DoT has also decided to fund the commercial rollout of products linked to improving quality of services or making telecom operations more economical. It has shortlised about 10 companies who have been asked to demonstrate their products on a pilot basis in rural India, following which it will fund the commercial rollout of successful pilots.

These companies include Telsima Communication for WiMAX services, Artheon Electronics, STM Softech, Radio Innovation Sweden, Vanu, Tulip IT services, Param Hasna System and software, Vedekon from Ukraine and Measurement & Controls India Ltd. Radio Innovation Sweden has been shortlised for its solutions that enable super economical coverage of GSM, Vanu for its multi-operator shared telecom towers concept, Vedekon for its WiMAX solutions.

The communications ministry is of the view that these new avenues to disburse this fund will help increase the country’s tele-density, especially in rural India. While the overall tele-density of the country is just under 40%, rural tele-density is still under the 10% mark.

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.

Govt to use mobile telephony to collect data of beneficiaries under NREGS

From The Hindu Business Line on 28 May 2009
Our Bureau

Kolkata, May 27 The Panchayat and Rural Development Ministry Department, West Bengal, in association with Pixel Informatics, plans to use mobile telephony to collect data of beneficiaries under the National Rural Employment Guarantee scheme.

As a part of the pilot project, the Government has handed over 1,100 mobile handsets to members of Gram Panchayats and Panchayat Samity in a number of districts for collecting all available data on the rural beneficiaries, according to a press statement issued by Pixel.

Ever since the NREGS was introduced to ensure minimum 100 days employment to rural workers, its monitoring has come under strain largely due to inadequate data on daily attendance and wage disbursals given the hierarchical reporting structure filtering up from Gram Panchayats to the state headquarters.

This initiative would speed up the process of information collection and dissemination as the supervisors of NREGS working at rural fields would be entrusted with the job of collecting status of daily attendance and payment disbursal to wage earners to speed up information reaching the state headquarters, the release said.

Bharati Airtel to target Northeast rural areas

23 May 2009, 2210 hrs IST, Bikash Singh, ET Bureau

GUWAHATI: Bharati Airtel will target rural areas of the Northeast to propel its growth in the region. The company has planned to roll out 2500 Airtel Service Centers (ASCs) in the two telecom circles of Assam and North East.

For rural customers, Airtel has already set up 14,000 ASCs, and going forward, the company is looking at having over 1 lakh such centres across the country by March, 2010.

In the last four years, the company invested around Rs 1000 crore in the Northeast. Airtel’s Northeast subscriber base is at 2.7 million. In last fiscal, the company added some 1.2 million subscribers.

Executive director Syed Safawi who was in Guwahati said, “Out of the 37,000 census villages in the region, Airtel is present in at least 22,000. In the remaining village we will expand.”

President mobile services, Atul Bindal added, From Northeast we are getting around Rs 75 crore revenue per month. Northeast and Assam circle (NESA) is a good business circle for us and is among the top 10 to 15 business circles. The company has 23 circles.

Last year Airtel has covered around 203 towns, 15,746 villages. Mr Bindal further said, The penetration of mobile telephony in the region is around 20 to 21 percent. This offers enough opportunity to tap the huge untapped areas.

Issue-full telecom directory

18 May 2009, 0111 hrs IST, Joji Thomas Philip & Rashmi Pratap, ET Bureau

NEW DELHI / MUMBAI: The Congress-led United Progressive Alliance’s return to power with a clear mandate will allow the combine usher in much-needed reforms in this sector, notably a new spectrum policy and listing of government-owned telco Bharat Sanchar Nigam (BSNL).

Finally, India’s mobile phone users can also look to enjoy high-end services such as high-speed internet and video conferencing, as the new government speeds up the auction process for third generation spectrum. The 3G auctions have been postponed many times since 2007 due to constant sparring among the ministries of finance, defence and communications.

But the thumping win by the Congress-led alliance may see the party get the telecom portfolio, which will enable it to push for the 3G auctions and double the floor price of these airwaves to over Rs 4,000 crore as demanded by the finance ministry. The DMK’s A Raja, who held the telecom portfolio in the earlier regime, was opposed to hiking the 3G auction base price.

The UPA is also set introduce more rural India-oriented policies—besides taking high-speed internet to villages, the new government is also expected to usher in mobile number portability before the year-end. BSNL’s listing is also on the cards, say industry observers. The previous government was forced to drop plans for the country’s largest listing yet as again, Mr Raja was reluctant to pursue it.

The sector can also expect to see the introduction a new spectrum allotment policy as the UPA would want to bury all ongoing controversies associated with the allotment of airwaves. Spectrum-related controversies have plagued the country’s telecoms sector for years, and the DMK ministers had failed to come up with a comprehensive solution.

“The telecom sector needs a stable spectrum allocation policy. Be it linked with the subscriber base or through auctions, we want more spectrum and a stable regime,” Bharti Airtel chairman and managing director Sunil Bharti Mittal told ET.

The clear verdict will enable the new government overcome opposition from vested interests who are opposed to massive policy changes aimed at giving a boost to the sector whose growth has a direct bearing on the country’s GDP. The government is also set to address a long pending demand by the industry to reduce and simplify the existing levy structure.

Indian consumers enjoy the world’s lowest tariffs despite its telcos being subject to the highest levies globally, where they have to share 25-30% of their annual revenues as different forms of taxes.

“The new government should simplify the existing levy structure. There different levies for mobile, domestic long distance, spectrum charges and so on. There is also different levies for different areas. Service tax, licence fee, microwave fees… there needs to be some uniformity in levy structure for all segments,” Mr Mittal said.

The UPA may also revive its plan to try and make available free-broadband facility for a sizeable section of the population.

Shortly after this grand plan was announced in 2007, the then communications and IT minister, Dayanidhi Maran, was forced to quit. The proposal could not be implemented as it was not on the agenda of Mr Raja, his successor.