Global players find MTNL’s WiMax project terms unattractive

Disincentives

Operator will have to partner a company that has no expertise in the area

MTNL asking for too much of revenue share and branding

——————————————————————————————————————————————

Thomas K. Thomas on August 15, 2009 in The Hindu Business Line at
http://www.thehindubusinessline.com/2009/08/15/stories/2009081551020400.htm

 New Delhi, Aug. 14 International WiMax operators eyeing MTNL’s franchisee contract are unhappy with the conditions specified by the state-owned company in the tender document.

Some of the operators have told MTNL that the terms were restrictive as they permit only system integrators (SIs) or original equipment manufacturers (OEMs) to bid.

“We met senior MTNL officials and have told them the disadvantages of allowing only SIs and OEMs to bid. This will mean that an international operator, who has all the experience to take forward MTNL’s WiMax services, will have to necessarily partner with a company that has no idea of rolling out broadband services,” said a foreign operator looking to bid for the WiMax project.

Another operator said that while an SI did not have any idea of rolling out a WiMax network, OEMs would not like to partner with MTNL and become competition to the private players, who could be their clients. “An equipment vendor can never become an operator. It will lead to a clash of interest with its other customers,” said the operator.

Foreign players have also pointed out that MTNL was asking for too much in terms of revenue share and branding conditions whereby it has been made mandatory to use the PSU’s name to sell service.

“Why would a foreign player invest in setting up a network if it has to offer services in MTNL’s brand and also offer a large part of the revenue to the PSU?” asked a foreign player. However, MTNL officials said several system integrators and original equipment manufacturers have expressed interest.

“We are not forcing anyone to bid. These are the terms and conditions that we have put out for the benefit of MTNL. We are not responsible for another operator’s business case. Having said that, there are a number of OEMs in the WiMax space who are adopting new business models whereby they set up the network and also manage it. There are foreign players we know who are talking to such OEMs to jointly bid for this project. We hope to get a good response,” said an MTNL official.

A number of players, including SOMA, Yota, UQ Communications and Spice Group, may bid for the MTNL project, which envisages wireless broadband services in Delhi and Mumbai. But foreign companies such as Yota and UQ will have to partner a system integrators or an original equipment manufacturer if they want to bid.

SOMA is on a stronger wicket because it is both an operator and an original equipment manufacturer.

MTNL will enter into a revenue sharing agreement with successful bidders.

Zylog Systems eyes 2 overseas buys in governance space

By Bijoy Ghosh on The Hindu Business Line on June 15, 2009

Our Bureau

Chennai, June 14 To ramp up its operation in the e-governance segment, Zylog Systems plans to acquire two overseas companies by the year-end.

On the sidelines of launching the ‘Wi5’ wireless broadband services, Mr Ramanujam Sesharathnam, Managing Director and Chief Operating Officer, Zylog Systems, said that the company was in talks with a couple of companies with revenues of less than $10 million (about Rs 50 crore) in the e-governance and managed governance space.

The company had acquired PEQ Consulting, an infrastructure management company, and Fairfax Consulting in November 2008.

Zylog Systems India, a subsidiary of Zylog Systems, will invest about Rs 200 crore in expanding its ‘Wi5’ wireless broadband services in five metropolitan cities – Delhi, Mumbai, Bangalore, Hyderabad and Kolkata – in two years.

With 250 wireless nodes installed across Chennai, 4,000 more nodes are expected to be operational in the city in 12-15 months.

On why the company chose Wi5 technology and not the more advanced Wi-Max technology, Mr J. Shivkumar, Chief Technology Officer, Zylog Systems India, said most handheld devices such as mobiles, laptops and notebooks were only Wi5-enabled.

In terms of cost, coverage and capacity ‘Wi5’ was competitive, while the Wi-Max technology was expensive. The newly launched ‘Wi5’ retail packages are available at 1 mbps, 2 mbps and 4 mbps at Rs 550, Rs 1,000 and Rs 1,750.

Related stories at

• 
  http://www.ciol.com/technology/networking/news-reports/zylog-systems-launches-wi5-services/15609120967/0/
  
• 
  http://efytimes.com/efytimes/fullnewsxml.asp?edid=35145
  

Excerpt from the above

Ramanujam Sesharathnam, managing director and chief operating officer, Zylog Systems, said, “We are delighted to launch Wi5 services in Chennai, as it is a city with high laptop and mobile internet population, familiarity with working online is implausible. Due to Wi5′s inherent technological superiority, the speed will be many times faster than conventional broadband and offers a minimum data speeds of 1 mbps.”

Zylog’s Wi5 services works by creating a Wi5 mesh network, which is done by setting up intelligent Wi-Fi nodes on roof tops in select buildings across the city, making the area a Wi5 zone. The company offers a pre-paid connection to its customers and to access the Wi5 services, users need a Wi-Fi enabled laptop personal computer or a mobile device or a separate Wi-Fi card. Called as the ‘metro wi-fi’, Zylog’s wi-fi model will work like the mobile telephony network.

Zylog Systems has also implemented Wi-Fi in Ripon Building (Chennai Corporation) and a trial run is in progress.

BSNL to invest Rs 15,000 cr in FY10

Virendra Singh Rawat / Lucknow June 11, 2009, 0:56 IST on The Business Standard

Public sector telecom giant Bharat Sanchar Nigam Limited (BSNL) will invest Rs 15,000 crore this fiscal to upgrade its infrastructure and roll out new value-added services.

“Our capital expenditure in different verticals this year would be around Rs 15,000 crore,” BSNL CMD Kuldeep Goyal told Business Standard.

BSNL will use the investment for mobile expansion and for services like 3G, broadband, wireless broadband, IPTV, WiMAX, mobile commerce (m-commerce), value-added landline, Enterprise Resource Planning (ERP) and others.

“Our aim is to add 35 million telephone lines by the end of this fiscal across the country and to commission fresh 3G network,” he added.

BSNL had launched 3G services on February 2 and, at present, it is available in 70 towns. “We plan to provide 3G services in 700 cities by the end of calendar 2009,” Goyal said.

He added that, for achieving the targeted mobile growth, more spectrum was needed by operators.

“The availability of spectrum for mobile phone operators in general is less than other countries. However, this has not affected the quality of services being offered,” he claimed.

“We will offer wireless broadband through WiMAX technology in 1,000 blocks of the country out of the total 6,000 blocks. The state-run telecom operator will roll out franchisee-based WiMAX service in the country, starting with Gujarat, Maharashtra and Andhra Pradesh.

“We have floated tenders for offering similar a WiMAX service in other states as well,” he said. “We are also working on improving our quality of service and have engaged AC Nielson to test the quality of our mobile service,” Goyal added.

3G Rollout: Raja meets PM; discloses agenda for 3G roll out

Source PTI, From Hindustan Times on 11 June 2009

Setting the ball rolling for 3G mobile telephony, Telecom and IT Minister A Raja today met Prime Minister Manmohan Singh and discussed the agenda for launching the much-awaited services and auction of spectrum.

Official sources said that Raja met Singh in the morning and briefed him about the ongoing issues, including roll-out of 3G and wireless broadband (Wimax) services.

The Department of Telecom (DoT) has to decide on the reserve price for spectrum as it had differences with Finance Ministry. The matter may be taken directly to the Cabinet Committee on Economic Affairs (CCEA) or will be referred to a Group of Ministers (GoM).

DoT had proposed a reserve price of Rs 2,020 crore for an all-India spectrum of five MHz, while the Finance Ministry had pegged it at around Rs 4,040 crore.

Asked whether the reserve price of spectrum came up for discussion between Raja and Singh, sources said the minister mentioned about the number of players to be considered for 3G in the first round of auction of spectrum and its pricing.

Raja had earlier told PTI that he would like to start the process of auctioning of spectrum within three months and roll out the services by the end of this calendar year.

3G allows users access to high-speed data and voice services. State-run BSNL and MTNL are the only two operators to offer this next generation service in the country, while private players are awaiting spectrum to be apportioned.

Related stories at

• 
  http://www.financialexpress.com/news/raja-meets-pm-discloses-agenda-for-3g-roll-out/474318/
  
• 
  http://economictimes.indiatimes.com/Cabinet-to-take-a-call-on-3G-auctions-soon/articleshow/4642138.cms
  

France Telecom & Telstra in talks with Maxis to buy minority stake in Aircel

10 Jun 2009, 0047 hrs IST, Rashmi Pratap & Boby Kurian, ET Bureau

MUMBAI | BANGALORE: France Telecom and Telstra of Australia are in talks with Malaysia’s Maxis Communication to buy a minority stake in Indian telecom operator Aircel, in yet another sign that the ongoing slowdown and credit crunch are having a negligible impact on deal activity in the telecom sector.

The talks between the two overseas players and Maxis revolve around France Tele buying a 20-25% stake in Aircel, a dominant player in Chennai and Tamil Nadu. Aircel, which is one of the major regional players in India, is in the midst of a $5-billion expansion plan that will see it becoming a pan-India player.

Meanwhile, Saudi Telecom, which owns 25% in Aircel parent Maxis, is likely to increase its stake in the company to 35% for about $1 billion. The money from the sale of Maxis’ stake will also be used to invest in Aircel. Goldman Sachs is advising Saudi Telecom in its transaction with Maxis. The deal with Saudi Telecom is expected to be completed within a month.

Estimates of the valuation of Aircel, which has a subscriber base of 19.6 million, vary between $7 billion and $8 billion. France Tele, which is not looking to buy a majority stake, will end up paying about $1.4-2 billion if the deal goes through at this valuation, people close to the development said.

The Indian telecom sector is perhaps one of the few sectors in the economy that is still witnessing strong M&A deal activity despite an economic slowdown. In the past 10 months, about $5 billion of deals have been concluded, including a mega $2.7-billion transaction that saw Japanese giant NTT DoCoMo buying 26% in Tata Teleservices.

Indian telecom companies, too, are growing at a scorching pace with monthly subscriber additions rising to more than 10 million a month. At this rate, Indian subscriber base is expected to leap past the 500 million mark in double quick time.

Aircel on course to widen pan-India reach by June 2010

The continued high growth is of great interest to foreign investors. Impending developments such as auction of spectrum for 3G (third generation) and broadband wireless access (BWA), besides the entry of MVNOs (mobile virtual network operators), offer further growth opportunities,” said Salil Pitale, head (telecom & media), at Enam Investment Banking.

For France Telecom, Europe’s third-largest phone company which owns the Orange brand, it will be an opportunity to re-enter the world’s fastest growing telecom as it faces a slowdown in its home turf and in other mature markets.

In response to an e-mail, an Aircel spokesperson said, “We are not aware of any discussions with France Telecom about this matter. Maxis Communications and its partners remain firmly committed to the accelerated growth and development of Aircel to be a successful pan-India operator.” A France Telecom spokesperson said, “We do not comment on market rumours.”

France Telecom first approached Maxis in August last year, just before the global market meltdown. “At that time, it was also in talks with Tata Teleservices (TTSL). Negotiations with Maxis were revived after NTT DoCoMo clinched the deal with TTSL,” a person familiar with the discussions told ET.

Maxis was also in talks with AT&T last year for selling a similar stake, but the deal could not go through because of differences in valuation. Talks between France Tele are still at a preliminary stage and the deal may also fall through because of Maxis’ insistence that the prospective investor also purchase a small stake from Maxis. France Tele, on the other hand, wants the investment to go into the company, that is Aircel, and is not keen on buying directly from Maxis.

Maxis owns 74% in Aircel while the rest is held by Chennai-based Reddy family, promoters of Apollo Hospitals. France Tele had held a stake in Mumbai-based BPL Mobile for many years before exiting in 2003. In 2007, its group company Orange Business Services acquired GTL’s enterprise and managed services division. Subsequently, it bagged NLD and ILD licences in India. A stake in a mobile firm now will complete France Telecom’s India story.

Aircel is currently in a money-guzzling mode, with the target to complete pan-India footprint by June next year. Ananda Krishnan, the owner of Maxis, also needs money to pump into Natrindo Telepon Seluler, a telecom firm in Indonesia which has a 3G licence. Plus, he bought out NTT DoCoMo from Sri Lanka Telecom in 2007 and that business also requires continued investments.

In a bid to fund these plans, Ananda delisted Maxis in June 2007 in a $12-billion deal and within days, he sold 25% of it to Saudi Telecom for over $3 billion. Due to this, Saudi Telecom has an effective 18.5% stake in Aircel. Dilution of another 25% in Aircel will help Ananda’s Maxis raise around $2 billion at a time when global credit scenario is not very positive.

At the same time, India’s telecom growth story continues to attract international investor interest, with all the major telcos making a beeline for India. This is despite the presence of 12 players and entry of four more telcos later this year. For Ananda, stake sale could be an opportunity to raise money without giving any controlling rights.

Low-profile billionaire Ananda Krishnan, whose business empire stretches from telecom and media to power and construction, is known for buying and selling businesses. In May last year, he sold Excel, the giant exhibition venue in London’s Docklands, for around $230 million, to a group backed by the crown prince of Abu Dhabi. He then bought a 20% stake in British regional newspaper chain Johnston Press and is widely believed to be interested in setting up a global media empire.

CDMA group sees 100 m new subscribers in India

Thomas K Thomas on The Hindu Business Line on June 9, 2009

New Delhi, June 8 Notwithstanding the fact that there are more number of operators moving towards offering GSM-based mobile services, the CDMA Development Group (CDG) has projected that India will have 100 million new CDMA subscribers over the next two years if operators are given adequate spectrum.

Speaking to Business Line, Mr Perry LaForge, Chairman of the CDG, said, “We think the CDMA subscriber base will grow another 100 million in two years. Both Tata Tele Services and Reliance Communications have reiterated their strong commitment to CDMA. They have been clear that the decision to implement GSM was really a matter of necessity because they do not have visibility as to when and what spectrum they will receive for CDMA. This situation needs to be corrected so that these operators can continue to grow wireless communications in this market. CDMA will flourish here in India if spectrum is provided.”

There are 100 million CDMA subscribers currently with Reliance Communications and Tata Tele both of whom are rolling out GSM services as well. Among the new players only Sistema Shyam has chosen to adopt the CDMA technology.

‘Faster growth than GSM’

Mr Laforge said the growth of CDMA has been much faster than GSM. “CDMA started years after GSM launched (GSM started in 1995). After seven years GSM reached 10 million subscribers. CDMA launched in 2003 and by 2004 reached 10 million subscribers and by 2007, 50 million subscribers — the fastest of all technologies to reach 50 million subscribers. We have now reached the 100 million mark just two years later. This is remarkable growth and CDMA operators have achieved 25 per cent of the market with just two operators competing against entrenched operators.”

However, Mr LaForge said, for this growth to continue, operators will need to have spectrum to pursue competition on a level playing field with GSM counterparts.

Mr LaForge said CDMA operators are better positioned to offer broadband services. “With high-speed wireless Internet access now a reality in CDMA with advanced wireless broadband services such as Reliance’s Broadband Netconnect+ and Photon Plus Services offered by Tatas, we see operators continuing to offer more devices, more services while improving their average revenue per subscriber. In many cases, the top wireless broadband operators in the world, in terms of performance, are CDMA operators. Examples include KDDI and Verizon. We believe this will continue to fuel CDMA growth here in India,” said Mr LaForge.

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.

Communication monitoring agency soon

22 May 2009, 0121 hrs IST, Joji Thomas Philip, ET Bureau

NEW DELHI: The new UPA government will soon invest Rs 450 crore to establish a central autonomous agency that will monitor all communication traffic to tighten the country’s security and surveillance set-up, and make sure no early warning of terrorist attacks is lost in the medley of agencies currently tracking them.

The agency, to be called ‘Centralised Lawful Interception and Monitoring System’, will monitor transmission through wireless and fixed lines, satellite, internet, e-mails and voice over internet protocol calls.

The ministries of law, defence, home, and communication and IT have already been asked to put it in place as soon as possible. According to officials in DoT, a top priority of the new Union cabinet will be to allot Rs 450 crore for this initiative that will be operational by year end.

The Centre will commit additional funds for this project after the initial allotment has been utilised. Setting up such an agency has assumed critical importance after the 26/11 terror attacks in Mumbai last year.

The proposed centralised agency will be modelled on the lines of similar set-ups in several western countries, including the US, UK, France and Germany. The National Security Agency is entrusted with the job in the US, while the Government Communications Headquarters monitors all communication within the UK.

The centralised system aims to be a one-stop solution as against the current practice of running several decentralised monitoring agencies under various ministries, where each one has disparate processing systems, technology platforms and clearance levels. Currently, the defence ministry, the police department, the Intelligence Bureau and other agencies associated with national security, all have separate surveillance systems. In addition to duplication of work, they often refuse to share information with each other as they compete with each other.

With no centralised system in place, officers of the Vigilance Telecom Monitoring cells of DoT assist different security agencies in monitoring mobile, fixed, satellite and internet services offered by both private and government companies. These cells also act as the technical interface between telecom service providers and security agencies.

These cells also have a director-level representative from each of the different security agencies. There is also a committee of officers from the ministries of home affairs, defence, IT and telecom, and the Intelligence Bureau, that recommends the nature of monitoring activities that can be carried out.

The police, IB, defence ministry and other agencies also operate their independent surveillance systems. The centralised lawful interception and monitoring system will combine all these parallel systems into a single entity.

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

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

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

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

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

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

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

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

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

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

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

BSNL’s EVDO offers link back up to enterprises

Usha Prasad on www.ciol.com on Monday, may 18, 2009

BANGALORE, INDIA: The high-speed EVDO (Evolution Data Optimized) data cards launched by Bharat Sanchar Nigam Limited, Bangalore Telecom District a year ago, is finding more takers with 4,000 plus customers in the city.

EVDO-based data services on CDMA are available in the city covering most of the areas. It has up to 10 times the peak data rate of the next best public wireless solution – 400 to 1,000 Kbps average and allows the user to be “connected” wherever they are – not only for email, but for downloads, large files, photos and spreadsheets.

In order to further popularize the use of EV-DO data cards, BSNL is offering EVDO (USB-type data card) as a bundled solution along with the Type II broadband plan on copper. This plan comes with a discount of Rs. 250 with unlimited usage on EVDO. The requirement is you should have a monthly broadband or combo plan of > Rs. 499.

With both wired and wireless connectivity, the user can have a unique combination of backup and mobility. With speeds technically up to 2.4 mb, EVDO cards are set to make a huge impact, a senior BSNL official said. However, depending upon the traffic density, when you are the move, you get up to 1.8 Mbps speed, he added.

“Presently, EVDO gives you mobility within Bangalore city, and in case you have a broadband connection at home, the EVDO also works as a backup,” the official said.

Today, EVDO also has a second application which is enterprise-centric. In addition to offering high speed connectivity, EVDO offers a link back-up to banks. BSNL has tested the same with over 10 banks. Bangalore Telecom is the first one in BSNL to test this application with banks in the country. “BSNL is planning to extend the same all over the country,” he added. “Even the security aspect of this technology is critically tested with these banks. This system supports any organisation having multiprotocol label switching (MPLS) connectivity.”

Features of EVDO:
* EVDO/1x is based on CDMA and is deployed in most parts of the country.

* In CDMA, the signal is much lower than the noise. The signal to noise ratio is less than 1.

Wireless Not-So-Narrow Band!

11 May 2009, 0346 hrs IST, Abhimanyu Radhakrishnan, ET Bureau

Even as India’s severely-abused internet users wait for a new government to give 3G the green light and liberate them from the “fraudband” mafia, there’s been a flurry of activity in the wireless internet space, with at least four players announcing new allegedly ‘high speed’ data devices on their improved 2-2.5G networks.

I’ve been using the new Netconnect Broadband+ from Reliance Communications for about a month now and the experience has been mixed. I ordered it online and while all the pictures on the website showed a sleek, foldable white device, the model I was delivered was a bulky black matchbox-shaped thing with an antenna jutting out and a cap dangling from the side. The modem was in fact big enough to block the other USB ports on my Macbook, while in use. I was annoyed that I wasn’t given the choice of the sleeker modem, that customers who bought it offline were getting, but I quickly forgot about it once the thing was installed and ready to go. I held my breath and hit the “connect” button on the dialer, and voila! I was seeing things that no Indian has seen on his or her wireless data card – three digits! I was actually seeing speeds of around 150 to 200 kilobits per second.

No matter that this is precisely the peak speed the older cards launched half a decade ago were supposed to offer. No matter that the card was giving anything from a tenth to a twentieth of the advertised speed. The point was that for the first time, half-decent wireless surfing was possible in a country that claims to be the world’s pioneering mobile market, but can’t execute a 3G spectrum auction.

Meanwhile, even as the regulator TRAI remains headless, a slightly disturbing development has occurred. All major telcos have suddenly announced “fair usage” policies on their high-speed “unlimited data” plans. There’s now a tiny asterisk next to the word “unlimited” that mentions a figure, beyond which, the customer will be charged for further data usage. Let’s, for instance, consider the 10GB monthly limit on data transfer, that the Reliance Broadband+ card offers on its most expensive unlimited plan. By RCOM’s own admission, the peak speed is 3.1Mbps, and if you do the math that involves 8 bits in a byte and 1024 megabytes in a gigabyte, you’ll run out in about 7 hours and 20 minutes – in a month!

Ok ok, so the peak speed is a theoretical maximum, much like mileage on a car, but even if you get a quarter of that speed consistently, which is the least a consumer should expect, you’ll run out after using it for just about an hour a day. It’s only fair then that the telcos stop calling them “unlimited plans”, especially in the YouTube era wherein the average legitimate surfer will easily consume more data than these caps allow. Let’s hope the soon-to-be-appointed gentleman in the hot seat at TRAI takes notice.

Wireless wonders

January 23, 2009
Even by the standards of the scorching pace set in the past five years, the next five years of India’s telecom history promise to be good, if a report just released by Ficci and BDA, a telecom consulting firm, is anything to go by. According to BDA-Ficci, 308 million wireless phone users were added in the last five years (starting from 28 million in 2003), and another 410 million will be added in the next five years.
The total number of broadband-speed Internet connections will rise from the current 5 million (all fixed line, and all installed in the last five years) to around 46 million through 3G modems, broadband wireless access and fixed lines; the share of value-added services (primarily SMS and ringtone downloads just now) will rise from 9 per cent of total telecom revenue today to around 23 per cent in five years (once broadband-speed 3G mobiles allow serious Internet downloads to happen).
So what, you might be tempted to ask — apart from what it means for various telcos and others in the eco-system like mobile handset manufacturers, sellers of Internet-ready devices like netbooks, application providers creating special software including games, media firms with mobile solutions, and so on.
Another report on telecom, coincidentally released the same day by the think tank Icrier in partnership with Vodafone, has some answers. According to analysis done by Icrier, the teledensity of a country/state plays a big role in determining its economic growth.
As is obvious, the relationship is two-way, but the researchers use accepted methods to isolate the impact of telephony on GDP growth; other methods are used to eliminate the impact of variables like length of roads and power supply on GDP growth. The relationship they come up with estimates that, beyond a certain threshold penetration level of 25 per cent, a 10 per cent hike in mobile phone penetration leads to a 1.2 percentage point hike in growth rates.
If that seems high, it is worth mentioning that other studies show an even greater impact of mobile phones on GDP growth in the rich, OECD countries. How wireless penetration translates into higher GDP growth is easy to figure — there is increased efficiency and a reduction in transaction costs.
The study cites several examples. Qualcomm’s work with the MS Swaminathan Research Foundation in Pondicherry has resulted in fishermen in the region getting, on their Tata Indicom mobile phones, data on wave heights, the best fishing zones for various types of fish, retail prices in various neighbouring markets, and so on — the fishermen, naturally, are more productive and can retail their catch at higher prices.
Doing banking transactions through mobile phones and using bio-metric information dramatically lowers the cost of bank operations in the rural areas. Few therefore can doubt the impact of mobile phones on growth.
What are the policy implications? The first has to be the need for stability in policy — if government policy on telecom keeps yo-yoing from one extreme to the other, or is biased, it will hit the growth of telecom and of the economy. And since the mobile phone is just an enabler, sub-sector policies have to be conducive too.