Telecom Trackers - Latest news in Telecom sector

4G frequencies bids in Italy total EUR 2.3 billion

2011-08-31T18:59:00.000+05:30

The initial bids for the use of 4G frequencies (800, 1800, 2000, 2600 bands) in Italy amounted to EUR 2.3 billion. The bids from the four major mobile operators – Telecom Italia, Vodafone Italia, Wind and 3 Italia - were opened on 30 August at the Ministry of Economic Development. They will form the starting point for the auction on 31 August. The auction will allow participants to increase their bids, as well as bid on spectrum lots not covered in their initial offers.

Bangladesh govt approves final spectrum renewal fees

2011-08-30T14:03:00.002+05:30

The Bangladesh government has finalised the spectrum fees for four mobile operators whose licences are set to expire on 15 November. Prime Minister Sheikh Hasina has approved the fees to renew the licences for fifteen years, The Daily Star reports. The government has set the fee at BDT 1.50 billion for all spectrum bands but each operator has to pay a different fee per MHz of spectrum based on their market share. Operators with a market share of over 20 percent will have to pay an additional fee while operators with less than 20 percent market share pay a reduced fee. Grameenphone will have to pay BDT 32.41 billion for its 14.6 MHz of spectrum, Banglalink is required to pay BDT 19.71 billion for its 12.4 MHz, Robi will have to pay BDT 19 billion for 12.8 MHz, and Citycell is expected to pay BDT 4.50 billion for its 10 MHz of spectrum. The operators will also have to pay BDT 100 million each for licence renewal fees. Additionally, the operators will be required to share 5.5 percent of their revenues with the government and pay 1 percent of their revenues into the Social Obligation Fund. The operators are required to pay 49 percent of the spectrum charges in November when their licences will be renewed and the remainder can be paid in three instalments due in May 2012, November 2012, and May 2013. The licences of two other operators – Teletalk and Airtel – are set to expire in 2020.

Source - http://www.telecompaper.com/news/bangladesh-govt-approves-final-spectrum-renewal-fees

Is China slowing down the progress of large-scale 4G deployments so as to favor ongoing development of homegrown TD-LTE standard?

2011-03-13T19:48:00.000+05:30

Now thats what I called a conscious collective effort. - As per Dow Jones Newswires reports that cited Chinese Minister of Industry and Information Technology Miao Wei, China won't launch commercial fourth-generation mobile services nationwide until 2014. Mobile operators worldwide are upgrading to 4G networks to fuel growth. 4G services offer faster data speeds and higher revenue per user than the more widely available third-generation services.

China will need three to five years to start large-scale commercial use of 4G services, slowed by the country's promotion of a 4G technology called TD-LTE that isn't yet fully mature. Local operator China Mobile Ltd. is likely to adopt the TD-LTE standard for 4G services but China may also allow carriers to adopt a different standard.

"It is also obvious that the Chinese government doesn't want to adopt a 4G service too soon as that would disrupt the carriers' efforts to develop 3G services" further, Miao was cited as saying. China's government and its three big mobile operators, China Mobile, China Unicom (Hong Kong) Ltd. and China Telecom Corp., invested billions of yuan to build 3G networks after China launched 3G services in 2009. Given this fact I appreciate the decision of Chinese government not to be played by the Vendors who deliberately intent to reduce life-cycle of technology. They come up with marginal upgrades, create hype and sell the equipments to operators who are stuck with huge investments.

Indian government plans to fund Rural broadband connectivity through USO fund

2011-03-13T18:25:00.001+05:30

The broadband penetration in India has not been upto the expectation. The rural broadband penetration is even worse and hence in the Budget for 2011-12, Finance Minister Pranab Mukherjee has finalised a plan to provide Rural Broadband Connectivity to all 2,50,000 Panchayats in the country in three years. As per Economic Times news the government of India will soon invite bids from telecom firms to provide broadband services in rural areas of the country under which the service providers get subsidy from the Universal Service Obligation (USO) Fund. Department of Telecom (DoT) will come out with tender for rural wireless broadband through USO Fund by the end of this month and is likely to cover 60,000 without giving the timeframe to achieve the target.

USO Funds was set-up in 2002 in order to provide mobile services and broadband connectivity in rural and remote areas of the country. As on December 31, 2010, the fund has a total of Rs 13,789.28 crore.

Under the 'Rural Wireline Broadband' scheme of USOF, a total of 2,61,413 broadband connections and 2,506 kiosks have been provided till January 31, 2011 in the rural and remote areas of the country against a target of 8,88,832 connections and 28,762 kiosks by 2014. Last week, President Pratibha Patil had launched DoT-USOF's pilot project Sanchar Shakti, which aims to provide useful information to women, about health, social issues and government schemes over their mobile phones. The scheme, which is funded by DoT's USOF, is for mobile value-added services and information and communication technologies (ICT) related livelihood skills for Women's Self Help Groups. As per the Department of Telecommunications (DoT), rural broadband connectivity will cost around Rs 18,000 crore.

Mobile gambling to be the fastest growing Mobile entertainment product sector - Juniper

2011-03-03T22:51:00.000+05:30

A new report from Juniper Research on Mobile Entertainment market has interesting findings. Some key findings from the report include:

Despite the erosion of the ringtone market, mobile music will remain the largest single contributor to mobile entertainment content revenues over the next five years
The fastest growing product sector will be mobile gambling, followed by social media
On a regional basis, Far East & China will continue to account for the largest share of revenues, followed by Western Europe

The report valued the Mobile Entertainment market at $33bn for last year, rising to $54bn in 2015 - driven by the continuing escalation in smartphone adoption and the attendant increase in downloads of consumer-oriented applications. The report observed that the combination of app stores and smartphones had created an unprecendented level of awareness and usage of services such as social media, games, video and streamed music. At the same time, the transition from the "walled garden" business model to an open mobile Internet had created greater opportunities for D2C players in niche areas such as gambling and adult services.

China 3G subscriber base touches 50 million - Growing at more than 4 million per month!!

2011-03-03T22:43:00.000+05:30

Three years after the networks first launched their commercial services, the number of 3G subscribers in China has passed the 50 million mark. At the end of May 2010, the country had 20 million 3G subscribers, and 38.64 million by the end of October 2010. The Ministry of Industry and Information Technology (MIIT) expects the numbers to surge to 150 million by the end of this year. According to statistics from China Mobile, it had a total of 22.6 million 3G users in January, while China Unicon had 15.47 million and China Telecom attracted 13.64 million. These telecom carriers now have a large number of subsidized 3G phones available to attract users.

Verizon all set to drop unlimited data plan offer on iPhone

2011-03-03T14:23:00.001+05:30

More and more operators are becoming allergic to Unlimited data plans on wireless. Verizon Wireless, USA based operator, who has only just started selling the Apple iPhone, is already planning changes to the tariff plans it offers to its customers. Specifically, it intends to cancel the headline grabbing "unlimited" mobile data tariff as soon as this summer and switch to a tiered pricing model. The mobile network operator currently offers an unlimited data option for US$30 per month, although it reserves the right to throttle the download speeds for heavy users in areas where network congestion is high. That compares to the offer from rival iPhone seller, AT&T - who charge US$25 for 2Gb of data traffic per month.

Has the 3G adoption in India taken a back seat?

2010-11-28T14:21:00.002+05:30

Is the 3G customer acquisition in India encouraging enough? Has the performance of Indian PSU Telecom companies in acquiring 3G customers been Good?

Judge your self. This is how China's 3G customer acquisition has shaped up since 2009. As of the end of October 2010, China had reached 38.64 mln 3G mobile subscribers which is almost 3 times from last year. The number of 3G users of each of China’s top three telecommunication operators, China Telecom, China Mobile and China Unicom, exceeded 10 million by the end of October, the MIIT data showed. Out of total 39 miln user, 10 mln were China Telecom CDMA2000 EV-DO subscribers, 16.98 mln were China Mobile TD-SCDMA subscribers, and 11.66 mln were China Unicom WCDMA subscribers. Compare this to almost 10 million acquisition in India in one year. Not Bad? TD-SCDMA users accounted for 43.9% of total 3G subscribers, with the total number of new 3G users in 2010 to date reaching 25.38 mln.

Earlier this month, the ministry said that China aimed to have 150 million 3G mobile users by 2011, while investment in 3G development would hit RMB 400 billion (US$59 billion).

China’s telecommunication industry reported RMB 744.8 billion (US$109.53 billion) in revenues during the first ten months of 2010, up 6.6 percent year on year. Business revenue of mobile telecommunications made up 69.84 percent of the total, while fixed-line revenues accounted for 30.16 percent, dropping 3.2 percentage points year on year, the MIIT added.

Etisalat yet to get an IDEA about Indian Telecom Market

2010-09-13T14:37:00.000+05:30

There are lot of speculations in market about UAE telecom major Etisalat's India plans. Some says, like Telenor, it is planning to quit the Indian market while others say that it plans to invest in India's Idea Cellular. Still others are talking about Etisalat striking a deal with India's Reliance Communications this year. While asserting that it is keeping its options open regarding investment in the fast-growing Indian telecom market, Etisalat is not responding to other speculations. It seems Etisalat is yet to get an IDEA on how to succeed in Indian Telecom Market

Etisalat already has a presence in the Indian market as Etilsalat DB Telecom India Pvt Ltd, which was earlier known as Swan Telecom. On June 3, Etisalat Chairman Mohammed Omran revealed that the telecom firm was evaluating several Indian telecom firms for a possible stake acquisition, but had not reached a final decision. Etisalat is also waiting for the issuance of tender requirements by the Syrian government that will enable it to bid for Syria's third mobile license.

Will MNP implementation deadline in India be deferred again

2010-09-13T14:26:00.000+05:30

It is apprehended that the 31st Oct 2010 deadline for implementing MNP(mobile number portability) in India might be deferred again. It has already been delayed four times. Initially, MNP was to be implemented by December 31, 2009 in all the metros along with the states of Maharashtra, Gujarat, Andhra Pradesh, Karnataka and Tamil Nadu.
The deadline was then changed to March 31, 2010 and then to June 30, 2010. The June 30 deadline was again deferred as operators were not ready with the infrastructure to provide the service.

The latest hurdle could be US-based Telcordia Technologies which, ET reports said, could move court to protect its MNP business ambition through joint venture MNP Interconnection. The telecom department has served MNP Interconnection a show-cause notice, asking it why its licence should not be cancelled, after the Foreign Investment Promotion Board (FIPB) rejected its proposal citing security concerns. Besides MNP Interconnection, the other licencee is Syniverse Technologies India, which has got approvals to implement MNP in India.

The country has been split into two number portability zones comprising 11 circles each and each zone is to be serviced by a separate MNP operator to avoid a monopoly scenario. Reports said the DoT is planning to tweak the MNP guidelines to allow a single company, Syniverse, to roll out its services nationally. I am not sure on the security issue, but it seems this will soon become the easiest way to counter business interests in India

Meanwhile, State-owned Bharat Sanchar Nigam Limited (BSNL) is said to be ready with the infrastructure to start MNP by the scheduled Oct 31 deadline. MNP will allow users to retain their mobile telephone numbers even if they switch their operators.

US regulator rejects proposal for free wireless broadband service - Interesting!!

2010-09-03T12:22:00.000+05:30

Federal regulators (FCC- Federal Communications Commission)have shot down a proposal by a startup called M2Z Networks Inc. to build a free, nationwide wireless broadband network using a spare slice of airwaves. M2Z had requested that the winner of an auction for the radio spectrum would provide free Internet service to anyone who connects to it. M2Z's business model was - offering free basic wireless broadband access — with speeds of up to 768 kilobits per second — that would be supported by advertising in addition to a faster, premium service.

The FCC is still studying possible uses of the spectrum.

BRICI countries to have 1.2 billion Internet users by 2015 - BCG

2010-09-03T12:16:00.000+05:30

According to a new report by the Boston Consulting Group (BCG), Internet users in BRICI countries will nearly double by 2015, hitting around 1.2 billion users. In 2009, the BRICI countries - Brazil, Russia, India, China, and Indonesia - had some 610 million Internet users.

Although there are only 440 million PCs in the BRICI countries at present, this number should more than double by 2015 - and Internet cafés and mobile devices will also act as important means of digital access. The study says that the habits exhibited in the BRICI countries differ markedly from those in the developed markets - for instance, instant messaging is vastly more popular, as are online music and games. There are remarkable variations among the BRICI countries as well. Social networking is more popular in Indonesia and Brazil than in any of the other BRICI countries - or even in the developed markets. And while an extremely high percentage of Indian digital consumers use e-mail, Chinese Internet users have gravitated toward instant messaging.

Among the most prominent trends is that BRICI digital consumers are far more likely to be meeting their digital needs through mobile phones than through personal computers. With PC penetration still quite low, mobile phones are cheaper and more convenient tools for both communicating and seeking out entertainment - already, the BRICI countries have around 1.8 billion mobile-phone SIM card subscriptions, more than four times the combined total of those in the United States and Japan. In fact, as sophisticated handsets become available in the BRICI markets, millions of BRICI digital consumers are leapfrogging over PC usage and going online via their mobile phones, a trend that has significant implications for their Internet-usage habits.

In addition, BRICI Internet users are unusually young - more than 60 percent of digital consumers are under the age of 35 - which means that although the online habits of BRICI consumers are still being formed, these behavior patterns will have broad implications for future online activity.

LTE Network commercially launched even in Republic of Tatarstan. India still struggling to launch 3G services

2010-09-03T12:08:00.000+05:30

Russian WiMAX to LTE network operator, Yota has announced the launch of an LTE network in Kazan, capital city of the Republic of Tatarstan - having installed the citywide network in just two months. Yota has invested $20 million in building the Kazan network, which covers the city's whole population of over one million people with 147 base stations. Kazan is Russia's third city and host to the Universiade (the world university games) in 2013.

Since commercial launch only 14 months ago, Yota already has almost 600,000 customers and recently reported 2010 half-year results of US$66 million. Yota runs successful operations in Russia and Nicaragua and will soon launch its services across Belarus and Peru.

Zain Telecom emerges as clear winner

2010-04-03T23:01:00.000+05:30

More than two years back, I had posted an article on this blog titled "Zain and the art of network expansion"
I have always been an admirer of this company. It saw the opportunity in African continent well in advanced and grabbed it. Zain slowly acquired stack in so many of African operations and now it had sold them to Bharti. In few years is making a clean profit of $3.3 billion from sale of its African assets other than in Sudan and Morocco to Bharti Airtel for $10.7 billion even as the Indian operator said the deal is well-priced.

Bharti after signing this deal is all set to become fifth-largest wireless operator in the world with a combined subscriber base of over 179 million and operations across 18 nations. Bharti is taking a debt of $8.3 billion, to be paid upfront, besides paying another $700 million after one year. Manoj Kohli, CEO, international and joint MD of Bharti Airtel, will head the African operations.

GSM subscriber figures for Feb 2010 in India

2010-03-29T21:07:00.000+05:30

I have never believed in these figures. But for sake of those who follow this blog, here are latest GSM customer acquisition figures in India.

As per data provided by the GSM operators' lobby Cellular Operators Association of India, the GSM mobile user base in India touched a little over 400 million (407 million). The country's GSM mobile subscriber base has increased by 13 million to 407 million in February, with Vodafone Essar adding the maximum number of new customers in the past month. This is, however, less than the total addition of 14.4 million users in January.

The country's second largest GSM player Vodafone Essar added as many as three million customers in the past month, closely followed by Bharti Airtel. Vodafone Essar's touched an user-base of 97 million. Airtel added 2.9 million users last month against 2.85 million in January taking its total mobile user base to 124 million. Bharti has a market share of 30.55 per cent, while Vodafone Essar has 23.84 per cent. Aditya Birla's Idea Cellular added 2.25 million new users during the month, taking its total subscriber base to 62 million. It has a market share of 14.96 per cent.

State-run BSNL and private operator Aircel added 1.5 million and 1.8 million new users respectively in the month with their user base at 61 million and 34 million each. BSNL's market share reached 14.96 per cent. The major gainer in the month has been MTNL which added 86,706 new users in February from 45,067 in January.
(Note - Figures are courtesy TRAI reports and Economic Times news)

China Mobile sees reversal in ARPU trends!

2010-03-21T22:16:00.001+05:30

Given the fact that telecom industry in India has followed the trend in China with a time lag, I think this is very encouraging news for Indian telecom sector as well.

China Mobile Ltd, the Hong Kong listed subsidiary of China Mobile Corp., has reported that its full-year revenues for 2009 rose by 9.8% to RMB452.1 billion (US$66 billion). Net profit was also up, by 2.3% to RMB115.2 billion (US$16.8 billion). EBITDA rose 5.9% to RMB229 billion (US433.5 billion), with EBITDA margin reaching 50.7%. The total customer base at the end of 2009 reached 522 million, of which 65.03 million were net additions. The contribution to total revenue from value-added business increased substantially, including revenue generated from Mobile Music, which again exceeded RMB10 billion.

In 2009, the average minutes of usage remained steady at 494 minutes, and monthly ARPU rose slightly to RMB77, countering a general downward trend over the past few years. Looking into the future, the continuing impact of the global financial crisis on the Chinese economy, the change in the competitive landscape, the increasing mobile penetration rate and the convergence across telecommunications, Internet and Radio & TV Broadcasting networks all pose fresh challenges to the Group's future development. The company added that it will maintain its policy of overseas expansion and will also continue development in LTE services for the Chinese market.

Fund raising will be the key concern for Indian Telecom service providers in 2010-11

2010-03-21T17:37:00.000+05:30

As per Economic times - Nine cellphone companies have joined the fray for just three 3G spectrum slots while 11 companies, including Bharti Airtel, Vodafone Essar, Idea Cellular, Reliance Communications and Aircel, have bid for broadband wireless spectrum, which will allow them to provide wireless internet services.

One more interesting news was floating around. RCOM has said that it has crossed the 100-million mark in wireless customers and would explore both acquisition and expansion opportunities to strengthen its foothold in the domestic market. RCOM expects to add another 100 million customers within the next 1,000 days.

I think the time is ripe in Indian Telecom industry for consolidations. 3G auctions will be followed by M & A activity provided the auctions do not stretch the balance sheets too far. Amid ongoing price wars it would take serious efforts to raise funds for acquisitions. With interest rates moving north - the funds requirements for overseas acquisition , 3G auctions and M&A within India will be difficult to balance. The winners may emerge from those who will be able to balance fund requirements rather than balance the operations. Is Bharati listening?

Spectrum Status by Circles & Operators

2009-10-05T15:21:00.001+05:30

I thought this was an interesting data published in Business standard - http://epaper.business-standard.com/bsepaper/svww_index1.php

Beyond MTN & Zain - Bharti, BSNL & MTNL have opportunity in Egypt

2009-10-04T16:28:00.000+05:30

Egypt will offer two licenses to provide telecommunications services for upscale suburbs outside the capital, including fixed lines. The is move expected to bring in $1 billion worth of investments over the next five years. The licenses will be granted to a pair of consortia to operate so-called "triple-play" services that group internet, cable TV and phone services within such communities springing up around Cairo and elsewhere in the country.

The move marks the first potential crack in the state-owned Telecom Egypt's total monopoly over fixed line communications, though for now the services are only for within these communities.
The companies will not be required to submit an upfront payment, but the licenses would be based on a revenue sharing program in which the government would get 8 percent of the proceeds of operations within these compounds. Telecom Egypt would still operate in these communities, including fixed line services.

It is said that the bids are due on Jan. 12 and the decisions would be made in the second half of 2010. The communities affected are those which house between 50 to 5,000 units, while larger communities would be served by Telecom Egypt.

The move by the government comes as the country has been grappling with the fallout from the economic meltdown. While Egypt has fared better than many other nations, with officials projecting economic growth of over 5 percent for the fiscal year ending next June, it has still struggled with slumping foreign investment as the world's worst economic recession in decades has prompted investors to tighten their purse strings.

Over the last few years, Cairo has been expanding and its developers have invested billions of dollars in new housing communities in the desert catering to upper- and middle-income Egyptians.
The government's move also indicates a shift in the responsibility for providing infrastructure from the state to private developers.

Opportunity bells are ringing for Indian Telcos like Bharti, BSNL & MTNL who are desperate to invest abroad.

Download speed of 28 Mbps offered by Singapore's Mobileone - Wired-line broadband's fag end begins?

2009-10-04T15:44:00.000+05:30

Singapore's MobileOne (M1) has announced a further upgrade of its HSPA+ network to support mobile broadband download speed of up to 28 Mbps in selected areas. The increased speed has been achieved with the installation of MIMO (Multiple-input-multiple-output), making M1 HSPA+ network the first in the Asia Pacific to adopt this technology. MIMO is expected to be rolled out to the entire network progressively. Huawei has provided the upgrade.

Meanwhile, M1 will be offering mobile broadband service with download speed of up to 21Mbps island-wide from this Saturday. The M1 HSPA+ network has been capable of delivering download speed of 21 Mbps since July this year, although the company says it held back its commercial launch pending the arrival of customer terminals.

In a year or so the same can be expected in other major telecom markets of world - India & China. Does that indicate that the fag end of wired-line broadband has just begun.

Justifying tele-density in India ? Are the numbers reported by Indian Telcos inflated?

2009-10-04T13:45:00.001+05:30

In some of my older posts, I have shown my concern on the numbers reported for users of mobile service in India. For example with entry of DoCoMo on Indian scene, the numbers Tata reported to have added last month was more than 3 million. Bharti & Vodafone continue to claim the same number of addition that they were claiming in new month. Strangely it means that with entry of new operators the existing will not loose market share. Somewhere fundamentals of economics have been defied. In other words the teledensity in India can reach 100% in ayear or so, if 10 more new operators join, as they will each add 2 to 3 million connection without decrease in the number of additions by existing operators. WoW! It seems the tele density figures in India need to be justified some how.

Recently in one of the articles published in ET,findings of a survey by online market research company JuxtConsult were reported. It says - One out of every three (57 million) urban mobile users in India now own two or more mobile connections. Believe it or not. After all this is a survey. JustConsult claims that it's the first time an estimation on the size of this segment has been attempted, as none of the industry associations––Cellular Operators Association of India (COAI) and Association of Unified Service Providers of India (AUSPI)––or sector regulator Telcom Regulatory Authority of India (Trai) have any estimation of the number of multiple connections per user.

Understanding the size, composition and motivations of this huge segment of mobile users is critical. It is needed by mobile operators in designing their marketing plans. It is also needed by handset makers and department of telecom (DoT), which is in a fix as to estimating the true teledensity of India. JuxtConsult's estimation of mobile connections in the country (till July) at 343-million is lower than TRAI's estimates of 441.6-million (August). JuxtConsult attributes the difference between its estimate and TRAI numbers to many inactive connections. Says Sanjay Tiwari of JuxtConsult: "The discrepancy is also because about 15% of reported additions by mobile operators and their associations are inflated." There are credible reasons behind operators inflating subscriber numbers. Market cap, valuation and spectrum allocation based on number of subscribers are key reasons along with the pressure to cut tariffs. It also helps attract subscribers to one's own network. A new user is likely to join a large operator as network calls come cheap.

ET also reported that the government suspected that all operators were inflating their customer figures by about 15-20% and that the DoT is planning to monitor the user base of all telecom operators to ensure that operators do not inflate subscriber numbers to grab additional spectrum. Well all this will be sorted out shortly - I hope! For the time being Justconsult deserves appreciation for trying to help in profiling the multiple user customer, whose average age largely falls between 25-35 years. According to the survey, Delhi and the national capital region account for over one in ten of all 57-million MCMU’s at 12% of the total base followed by Mumbai (8%), Bangalore (7%) and Chennai (6%). Most are actual genuine connections.

The survey, also for the first time, makes a distinction between a user and a connection, hitherto taken as one in reporting India’s teledensity and average revenue per user. As reported by ET - According to Rajat Mukherjee, chief corporate affair officer at Idea Cellular, about 20% of all telcos’ customers carry more than one SIM. The carried / thrown in dustbin SIMs remains to be distinguished

JuxtConsult’s India Mobile 2009 estimates are based on a very large sample data of around 285,000 urban and rural Indians, covering all states and union territories––574 districts, 3,175 towns and over 2,800 villages. With at least 30 plus sample each from 323 districts and 419 towns, and 100 plus sample each from 184 districts and 155 towns, the study is one of the most representative, independent enumeration of mobile phone usage in India.

With over two mobile connections per user (2.4) amongst multiple connection mobile users (MCMU), this segment account for a majority (59%) of all 235-million odd urban mobile connections. JuxtConsult’s survey did not estimate MCMU numbers for rural India. TOO MUCH TOO SOON !!

With increased urbanisation and migration from distant parts of the country to the cities, long distance calling has been on the rise across the country. ET reports that Airtel will also soon be launching a family plan where in three members of a family can buy Airtel postpaid connection but pay rental for only one. This plan is justified by the survey which shows that joint families have the highest ownership of mobile phones, with about 65% of their members owning more than one connection.

The socio economic class (SEC) A & C mobile users show higher tendency to have multiple connections, says the survey. Migrant workers and youth form a large part of the target audience. This push is also having an impact on more Mobile phone sales and launch of newer models. Sunil Dutt, country head, Samsung Mobile says he is seeing a rise in sales of Samsung’s dual mode GSM/GSM and GSM/CDMA handsets. While Nokia and Sony Ericsson don’t have such phones in the market, Spice Mobiles, has 50% of its portfolio as dual SIM phones. Such phones contribute a good 80% of the company’s revenues, says Kunal Ahooja, CEO, Spice Mobiles. The survey says that about 41% MCMUs need another spare handset for ease of use. But switching between GSM and CDMA handsets is cited as a reason by 30% buyers.

3G bidding - Is this the third & Last round of telco competition in India?

2009-09-28T19:40:00.000+05:30

The DoT (Department of Telecom) will release a detailed information memorandum (IM) this week on the upcoming 3G auctions. As reported by economic times, the IM (information memorandum) to be released is likely to contains details regarding the billing schedule, qualifications of bidders, terms and conditions, payment schedules and other technical and commercial specifications that are critical to enable bidders to plan their auction strategy.

The DoT clarified that global telecom operators who do not operate in India are welcome to participate, though they will have to acquire a Unified Access Service Licence (UASL) to be eligible to bid. This implies some uncertainty for potential foreign bidders. At present, a pan-India UASL costs Rs 1,658 crore and comes bundled with 4.4 MHz of 2G spectrum. However, recent proposals to unbundle the licence from spectrum and to change its cost are still pending and could remain unresolved at the time India conducts its 3G auctions. This change is owing to a severe 2G spectrum crunch being faced in India with over 300 applicants waiting in queue for 24 months or more to get new spectrum/licences. DoT officials believe that global operators will be willing to join this queue, but given the fact that there is a shortage, the uncertainties relating to the cost and 2G spectrum availability may prove to be a deterrent. Any proposal to change the terms and conditions of licence has to be referred to the Trai and this usually involves a detailed process, including several consultations and Open House sessions with all stakeholders.

Domestic operators Bharti, Vodafone, Reliance, Tatas and Idea are expected to be the main players in the 3G auction ring. Nordic telecom giant Telenor, which recently secured 67% equity in Unitech Wireless is reported not to opt for a pan-India 3G licence but bid for a select few 3G circles. Aircel, Loop, Swan and Datacom may also place bids in some strategic circles.

The reserve price for pan-India 3G spectrum is pegged at Rs 3,500 crore. It is believed that given the limited number of slots, the government may be able to receive a price in the range of Rs 6,000 crore plus for each of the slots giving an additional revenue of Rs 25,000 crore to the exchequer for the current fiscal. The auction of third generation spectrum or airwaves, is likely to start this November. The EGoM has recently approved placing four slots of 5 MHz each in the 2.1 GHz band for auctions in 3G. If the auction is held in December as scheduled, it is highly likely that India will see four new 3G operators before the end of 2010.

To me this seems to be last round of competition between telcos in India. What I foresee is that after aggressive bidding for 3G licences, some of the operators will make huge losses. Then the consolidation phase will follow. By 2012 some of the players will start handling the batten - not to new players but to the one running in adjacent lanes.

Mobile Number Portability (MNP) to kick in from 31st Dec in India

2009-09-28T00:10:00.000+05:30

Mobile number portability (MNP) — a facility that allows customers to switch operators but retain their numbers — will kick in from December 31 across the metros and category A circles, such as Tamil Nadu and Karnataka, while the rest of the country will have access to the facility from March 31, 2010.

TRAI, the telecom regulator in India, also issued a slew of guidelines for MNP implementation. - As per the norms, once a user switches operator, he must stay for at least three months (90 days) with the new service provider before moving to another operator.
- Besides, a user holding a mobile connection is eligible to make a porting request only after three months of the date of activation of his number.
- The subscribers, who wish to port their numbers must submit their requests in writing to their service providers. The new operator must mandatorily carry out all checks, including identity verification, before completing the process, the regulator said, adding that the entire process must be completed within four days.
- Pre-paid users must give an undertaking of being aware that balances on both talktime and minutes will not be carried over to the new operator they are switching to. Post-paid customers must furnish proof that all outstanding dues to their current operator have been cleared, TRAI added.
- The operators must inform the customer about the exact date and time for the process. The regulator has also made it clear that while the operator is porting the number, the customer may have to face a ‘no service period’ that can be extended for up to a few hours during which they will not be able to receive and make calls. But in a bid to address these concerns, TRAI has said the new operator must provide the customer with a list of missed calls and messages sent during the ‘no service period’.

Syniverse Technologies and MNP Interconnection Teleco Solutions, the two companies chosen to implement it in India, had projected to regulator that less than 3% of the country’s expected 550 million-plus mobile users will go in for MNP by 2010. The regulator, when issuing MNP norms, however, did not specify the charges that customers will have to pay for switching their operator. Syniverse and MNP Interconnection had proposed to charge customers between Rs 75 and Rs 200 for porting an operator, but the regulator is yet to take a final call on the pricing issue.

Unique Identification Number (UID) - Does the idea of roping in Telecom service provider has merit?

2009-09-27T00:19:00.001+05:30

The Unique Identification Authority of India (UIDAI)has been established to provide a unique number to every resident in the country to target social security services as well as to assure the internal security. Authenticating 1.16 billion people is not an easy task. At this scale, it's going to be a one of its kind project and given the "as is" stage in which India is currently in, Mr. Nilekani needs to do lot of head scratching.

Nilekani, has already said that UIDAI would be looking for the databases of PAN card, passport, driving license, ration card, voter I-card and so on. But the first three cover only a small part of the population and the ration card data is subsumed in voter card data. The telecom user database of 500 million users is an obvious source which can be digged to help the UIDAI to have some part of the personal information checked.

Hence, The Indian government’s ambitious and high-tech unique identity or UID project is all set to ride on India’s 500 million strong telecom network as one of the largest available databases of subscribers anywhere in the world. So as a logical conclusion, DoT, along with the various telecom service providers, can be major stakeholder in this process. There are 480 million telephone subscribers in the country at the moment. Taking margin of error into account, the telecom database is an authenticated database of people in terms of identity and address is concerned.

To discuss how the database of nearly 500 million telephone subscribers can be used for issuing the unique identification number, the enrollment process of UID and how the telecom companies could help in the task of "Standardisation of Know Your Resident' norms which is a major goal of the all-India project for issuing the unique ID, UID Authority of India chaiperson and former Infosys cochairman Nandan Nilekani met telecom operators and DoT officials on 24th Sept seeking their cooperation.

While media reports indicate that Nilekani have sought similar cooperation from banks, post offices, and energy and fertilizer sectors, none of these offer the kind of large subscriber numbers and ready-to-use verification details as the telecom sector. This means that the country’s telecom subscribers could be among the first to be enlisted into UID scheme.

It is learnt that the project is expected to take 12 to 18 months to issue its first UID card and will then accelerate to clock half a billion citizens by the end of 2012. The telecom subscriber base works out perfectly since estimates place mobile users at well past 700 million by this timeframe. So essentially, if the UIDAI could convert every known mobile subscriber into a unique identity, it would have achieved a feat unmatched globally.

A major hurdle in implementing the project arises from the daunting task of developing appropriate software to support such a large database. The UID solution will have to have a quick query response system so that one can search by biometrics, particularly to track criminals. Further, the task of physically collecting one billion biometrics, photographs and other details in a short period of time is a logistics nightmare. Outlets will have to be nominated where people can go to have their data uploaded on to the database. Here again, the 10 million-strong mobile sales and distribution machinery may hold the key. This is because India has 97% mobile subscribers in pre-paid category who return month-after-month to renew the charge on their SIM cards.

As reported in press, Mr. Nilekani has said that the project will provide a unique identification (UID) number not a card. And hence the authentication can be made by using mobile phones. Once the UID is issued, one can go for online authentication.

Now all these seems to be just initial thoughts, getting the loose ends tied up will take its own time. In my opinion, the operators themselves rely on address proof and photo id proof which are unreliable for as far as linking to unique ID is concern. Further many forms (CAF) are missing and operators are being penalized for this. In my opinion, given the fact that many people carry more than two mobiles and also that many of reported numbers may not be operative, it will difficult to get meaningful information from mobile customer data beyond 100 million customer. To take the idea far, Mr. Nilekani's team will require to do some out of box thinking.

Its penalty time for Indian Telcos - DoT slaps Rs 32 cr of penalty for failing to adhere to sunscriber verification norms

2009-09-26T22:26:00.000+05:30

Government has slapped a penalty of Rs 32 crore on mobile operators for failing to adhere to the subscriber verification norms in 2008-09. The penalty has been on all the mobile operators, including BSNL and MTNL, for failing to meet the subscriber verification condition. With a penalty of Rs 1,000 for each unverified subscriber, the number of such users comes to about 3.2 lakh.

Earlier in April this year, DoT introduced a graded penalty system under which operators pay Rs 50,000 per subscriber if more than 20 per cent of their user base is without valid identity documents. However,the penalty continues to be Rs 1,000 per user if the mobile operator's unverified subscriber base is less than 5 per cent of its user base in each of the circles.

With the customer base swelling at ~ 15 million per month, I bet, if strictly implemented, this can bring in about Rs 2000 to Rs 3000 million of revenues per year.