India`s moblie user growth rate touches 85%

These are the findings of a TRAI study titled “Financial analysis of telecom industry of China and India”

India has posted 85% rise in its mobile subscribers annual growth rate while China posted 16% growth in the mobile user base in 2005.

Total telecom revenue of Chinese telecom companies increased from $65 billion to $72.70 billion during the calendar year 2005. Telecom revenue in India during 2005-06 was $19.50 billion.

Average revenue per user (ARPU) in India and China is comparable in GSM pre-paid segment but ARPU for post paid segment in China is much higher. ARPU for CDMA services are also higher in China in comparison to India.

However, ARPU for basic telephone services is higher in India when compared to ARPU for basic telephone services in China.

Further, the Minutes of Usages (MoU) of cellular mobile telephone services are much higher in India when compared to China`s cellular mobile telephone services.

Minutes of Usage of GSM and CDMA based cellular mobile telephone services in India are 32% and 70% respectively, higher when compared to Chinese cellular mobile telephone services, report said.

Source: myiris

Event Alert: VAS India 2006

2nd International conference on Value Added Services

Venue: Hotel Le Meridien, New Delhi
Date: Firday, July 7, 2006

Click here for more details.

Announcing Mobile Monday Mumbai

Mobile Monday

I’m pleased to announce that we are launching the Mumbai chapter of Mobile Monday and are holding its first event on July 3rd, 2006.

Mobile Monday is a open community of mobile professionals and enthusiasts. It is a forum to network, share knowledge and discuss developments in the mobile world. Founded in Helsinki (Finland) in 2000, it has more than 25 chapters worldwide.

Click here to know more about Mobile Monday.

Mobile Monday’s main activities are

  • Monthly meet-up on the first Monday of every month
  • Online networking and knowledge sharing with the community

The first event will be held on Monday, July 3rd, 2006 at Netcore Solutions’ office in Lower Parel, Mumbai. Know more about the event and registrations.

Speakers and format of the event is as follows.

  • Introductions
  • Rajesh Jain, MD, Netcore Solutions
  • Mobile Internet for Emerging Markets
  • Pankaj Sethi, VP - Value Added Services, Tata Teleservices
  • VAS: An Operator’s Perspective
  • Open forum, Networking and Dinner

See who’s coming to the 1st Mobile Monday Mumbai.

Airtel among top 10 IT companies

Bharti Airtel Ltd, India’s top operator, has been ranked among the top 10 best performing IT companies in the world by Business Week.

Business Week ranked companies on four criteria — return of equity, revenue growth, shareholder return (given equal weight) and total revenue (which was weighted).

Describing the company as a highly innovative company, the magazine improved Bharti’s ranking from last year’s 19 to ten this year. The telecom service provider was the only Indian company ranked that has made it to the list, a company statement said here.

Source: ET

Mini Mobile from India


A few months back Mobile Pundit had covered the story of a Swadeshi ultra low cost handset invented at National Institute of Design, Ahmedabad. Now we have a video so that you can see how it looks.

It has just three buttons and the user can receive or make calls from the three pre-assigned numbers. What is different from other phones for kids like the Firefly and Migo, is that it has no SIM card and has to be networked to a main mobile phone which prevents misuse in case it is stolen.

Source: New Launches

Spectrum scramble

Financial Express has a primer on spectrum issues faced by Indian operators. Read the article if you want to understand why there is so much controversy over spectrum.

  • What is spectrum?
  • How is spectrum allocated to different technologies?
  • What are the criteria for spectrum allocation?
  • How is spectrum allocated in other countries?
  • Why is there a controversy over allocation of more spectrum?
  • Is there a way forward?

Hutch launches fun cards

Hutch has introduced Fun Cards - scratch cards that offer predefined content for your mobiles.

With Fun Cards Hutch customers can now purchase Caller Tunes and Ring Tones off the shelf from the nearest Hutch retailer. All one needs to do is simply scratch the panel on the back of the card to reveal a unique 16-digit code.

Currently, Fun cards are available in three categories, ringtones, caller tunes and caller tunes shuffle. These cards are preloaded with specific content so that the customer can choose from the many options. The fun card is aimed at making downloads simple and easy.

Source: CIOL

India mobile users to treble by 2011: Bharti

According to Sanjay Kapoor, Joint President, Mobility at Bharti the number of cellular subscribers in India will treble to 300 million in the next three to five years.

Bharti is confident of sustaining its addition rate of more than a million subscribers per month. Kapoor said Bharti’s net adds would continue to outpace overall new mobile user growth in the Indian market.

In the year ended March 2005, Bharti increased its net adds by 67 per cent, compared with the market’s growth of 55 per cent. In the year to March 2006, Bharti’s new subscriber growth was 78 percent, versus 73 per cent in the broader market.

Qualcomm: GSM favouring spectrum policy behind Reliance GSM

One of the supposed reasons behind Reliance’s GSM entry is the high royalty fee it has to pay to Qualcomm. It is said that the royalty payout increases cost of handsets, which may not be viable in price-sensitive rural markets where the next round of mobiles growth is expected.

“The royalty on the chipset charged from Indian operators like Reliance is 7 per cent, in China 2 per cent, Korea 2 per cent and for US operators it is zero”, sources said.

They added that the burden of royalty of a handest on an operator worked out to around $10-15 per device in India and only $3 in China.

Speaking to Business Standard, Qualcomm India president Kanwalinder Singh dismisses the theory.

  • Royalties on handsets charged by the company are in single digits
  • Royalties are paid by device makers, not operators
  • CDMA operators in India were sourcing handsets in the sub-$40 wholesale price range
  • On that the royalty overhead worked out to $2 (less than Rs 90) per handset
  • Royalties on devices are a very small contributor to the cost of handsets

The company claims that unfavourable regulatory policy (biased towards GSM) is the real reason for Reliance’s GSM foray.

“Based on reports, it appears that Reliance’s Mumbai and Delhi plans are linked to CDMA operators not getting enough spectrum. We believe the primary challenge for CDMA operators in India is lack of spectrum. Current Indian regulatory policy favours GSM by making significantly more spectrum available for them. ..

“The policy is short-sighted, not practised any where else in the world, and will cause distortions like the one reported in the press - an operator can claim double the spectrum by standing in the GSM line rather than the CDMA line,” Singh added.

This kind of reaction was expected from Qualcomm. Reliance has over 7% of the estimated 270 million CDMA subscribers spread across the globe. Reliance is one of its biggest customers and its GSM plans can stunt the growth of CDMA in India.

Reliance GSM services by March ‘07

Business Standard reports that Reliance Communications may launch its GSM services in Delhi and Mumbai by March 2007. It expects the 1,800 MHz spectrum to be allocated by October.

The company has also roped in JM Morgan Stanley (JMMS) as financial advisor for a proposed re-organisation.

Even though the exact details for the reorganistaion were not available, sources speculate that this could be bringing all its telephony operations - internet, CDMA, GSM and submarine cable - under one umbrella.

Reliance maintains that it has no intention to exit its CDMA business. The company plans to operate a national GSM network through its subsidiary Reliance Telecom.

Reliance has earmarked around Rs 2500 crore for its GSM foray into new circles. It plans to invest about Rs 1200 crore for the Mumbai and Delhi circles, and about Rs 1500 crore for the existing GSM eight circles.

The funding for the project will be done from the $1.4 billion capex for FY07, and Reliance Communications expects the GSM rollout to cost around one-third of a greenfield rollout.

  • Will save 30% on basic infrastructure, because the cell sites, the steel structures and the back haul network will be common to both CDMA and GSM networks.
  • The cost of equipment has reduced by half in the last four or five years.
  • Will save another 15% on distribution as it will use its 200 Web Worlds to sell the GSM service.
  • Branding cost will be lower as the main brand is already well established, though it may create a sub-brand.

Nokia shifts managed services hub to India

Nokia today announced that it was shifting the hub of its global telecom network management services business to India from Finland.

The managed services division of Nokia runs the telecom networks of service providers as part of outsourcing agreements.

Coincidently, Nokia today announced a five-year deal with Hutchison Essar for managing its telecom infrastructure in 10 new circles.

With today’s announcement, the number of circles in which Nokia is managing network for Hutch would go up to 19. In January this year, Nokia had struck a 5-year deal to run network operations in nine areas for Hutchison Essar Ltd.

The company also announced that its first global network solutions centre (GNSC) in Chennai had begun operations in May and would serve as a hub for other Nokia operation centres all over the world.

At present, operations contributed about 30 per cent of the company’s total revenues and the figure would go up over the next few years, he said.

The Chennai GNSC offered a wide variety of services including remote care, remote integration, consulting, planning and optimisation, and was currently supporting operators including Bharti Tele-Ventures.

38 million mobiles sold in last fiscal

According to the Indian Telecom Industry Report released by Voice & Data, around 38 million mobile handsets were added in 2005-06.

Nokia leads with over 50% of handset market, while LG surprises by coming second with about 18%.

The GSM mobile phone market had a 73% and grew at 42%, clocking revenues of Rs 10,506 crore.

The market for CDMA handsets grew at 164% to reach Rs 3,752 crore.

The fixed phones market slipped by 6% to settle at Rs 1,799 crore.

Nokia remains the top telecom equipment vendor in India with revenues of Rs 12,062 crore.

LG Electronics jumped from the sixth place in 2004-05, to become the number two telecom vendor in India.

The telecom equipment market grew at the rate of 25% in 2005-06 to settle at Rs 52,998 crore.

The market for carrier equipment stood at Rs 29,040 with a growth of 13% and the market for telephones (mobile and fixed) grew at 50% to reach Rs 16,057 crore.

Source: Business Standard

Fame multiplexes launches mobile ticketing

Fame Multiplexes has launched ‘M-ticket’ service in Mumbai, Pune and Kolkata that allows booking of movie tickets of any Fame Multiplexes by a voice-recognition service (IVRS) and payment through credit card.

This service has been powered by OnMobile and is available for Hutch, Airtel and Idea subscribers in the above mentioned cities.

What is noteworthy in the announcement is the payment facility through credit cards. This will be one of the first few cases of not billing VAS through the operator.

Fame currently has a service called “SMS a Ticket” in which, subscribers of Hutch can send a SMS to 7007 and receive a call back from Fame for booking tickets. Which is kind of pointless. If the whole transaction cannot be completed through SMS, than what is the benefit of initiating it through SMS. Incidentally, I did not even receive a call back from Fame after I tried the service once.

Other Notable News and Articles

  1. Reliance’s bid to enter Egypt disqualified after technical evaluation
    It is close to finalising an MoU with MTNL to jointly bid for international licences.
  2. LG CDMA launches RD 6330 moviefone on Reliance
    Priced at Rs 5500, comes with camera and video recorder.
  3. Tata Tele launches loyalty programme for PCO operators
    There are about 80,000 Tata Indicom PCO operators in Tamil Nadu.
  4. Tata Teleservices to invest Rs 150 crore in Tamil Nadu
    The company has six lakh subscribers in the state.
  5. Tata Tele to invest Rs 150 crore in Punjab
    The company has four lakh subscribers in the state.
  6. Six mobile companies form Mobile Linux Platform Group
    Motorola, NEC, NTT DoCoMo, Panasonic, Samsung, and Vodafone are founders of the group.

Analyst’s views on Reliance moving to GSM

Moneycontrol has a interview with Susanta Mazumdar of UBS, who believes that the discount between the prices of RCoVL and Bharti Airtel on the bourses will narrow down by 2008-09.

With regards to discount, it would be unfair to compare in 2007 because RCoVL is a year or two behind Bharti in terms of profitability and the economy of scale has started kicking in just now. They have started getting the infrastructure network advantage now. So if one looks at 08-09, the discount will narrow down significantly and there will be a small discount with respect to Bharti. But if one looks from the perspective of subscriber addition, we need to see how the revenue for the quarter is behaving.

Mazumdar also explains the raison d’être of Reliance moving to GSM.

I think one has to go beyond this current spectrum issue because if one looks at migration to 3G for CDMA, then that typically works at 1900 mega hertz spectrum, where most of the commercial equipment vendors are present in the US market and the natural migration part is EVDO (Evolution Data Optimized ) from the current CDMA 1X. Whereas in case of GSM operators, the natural migration is WCDMA and that works at 2000 mega hertz frequency. It seems DoT or TRAI are thinking of the idea that the 3G spectrum will be available at 2000 megahertz, for which there are not many commercial equipment vendors for CDMA.

So for Reliance Communication if they have to move to WCDMA, which works at 2000 megahertz hertz then the capex would be definitely higher. So it is better to go for GSM and put a GSM overlay on the CDMA backbone and eventually migrate to WCDMA in the 3G space.

The incremental capex is not going to be large because the inactive portion of the network today costs almost 60-70% of the capex, where the active portion, which is the electronics portion will be new cost, maybe 30-35% of the total network and for that too they will go in a selective manner. Like in Kolkata, West Bengal, they made quite a success of doing both CDMA and GSM.

Good stuff.

Mobile Bandh

Retailers in South Mumbai are threatening to go on strike against a cut in margins by mobile operators. The telcos had slashed the margin on recharge cards to 2.5% from 3.25% this month.

Dealers complain that operators have been reducing margins over the past year, from 5% to 4% and then to 3.25%. Telcos argue that retailers also earn from selling new SIM cards and fresh connections.

Initially, retailers had planned to stop selling recharge cards, but are now threatening to stop new activations. If they stick to their stand, telcos stand to lose out on the 3,000 new connections per day in Mumbai alone.

The protest is limited only to retailers and the distributors have not issued any such threat.

Source: ET

TRAI proposes interconnect charge for SMS

In a consultation paper on regulating SMS, telecom regulator TRAI has proposed a interconnect usage charges (IUC) on SMS. But it acknowledged that there is an apprehension that IUC could increase SMS tariffs and has therefore sought opinion of all the stakeholders by June 30.

What is an Interconnect Usage Charge?

Interconnect charges are paid by one operator to another for terminating calls from the originating operator network to the destination / terminating operator network.

So if a Hutch subscriber calls a Airtel number than Hutch has to pay certain percentage of the call charge to Airtel.

At present, interconnect charges are paid by operators to each other for voice calls.

There is no such charge for SMS.

The move is aimed at compensating operators whose networks are getting choked due to incoming SMS traffic.

“With operators offering different bundled tariff plans for SMS and with SMS being increasingly used as an advertising medium, the SMS traffic imbalance across the operators is increasing. There is a possibility that some networks are burdened with a large proportion of incoming SMS traffic. Thus, there seems to be a need for regulatory intervention to ensure that no operator assumes an unnecessary burden,” TRAI said in the consultation paper.

I believe the problem is aggravated by bulk SMS providers who use their pipe with one operator to blast messages across operators. Since there is interconnect for SMS delivery but no IUC, the operators at the receiving end are forced to carry that traffic without any gains.

Maran favours 3G entry fee

Speaking at the sidelines of the GSM Association’s New Delhi conference, Telecom minister Dayanidhi Maran said that the Government was in favour of an entry fee for 3G services.

  • Spectrum was a scarce resource and the Government has to make some money out of it
  • We do not want operators to sit over spectrum without using it

Sunil Mittal of Bharti Airtel spoke against any such fee.

“To make 3G services affordable, there should be no separate entry fee for 3G. An entry price of any kind is also amortised over a period of time of the licence. That’s a levy the customer does not need. India must seamlessly migrate to 3G as Bangladesh and Pakistan have done, without any entry ticket.”

This comes a day after TRAI issued a consultation paper to discuss the pricing and allocation of 3G spectrum. The Government will take a decision after TRAI comes out with its recommendations.

Hopefully our government will not auction the spectrum and learn from the mistakes of Europe in 3G licensing.

Mobile VAS market may touch Rs 4,000 cr by 2007

BSNL is the second largest operator and it is putting of VAS infrastructure in its various circles. This will open up a new market for the providers and is expected to substantially increase the total VAS market size.

But without going in to the reasoning of the market size projection of Rs 4000 crores in the article, let us look at the list of new mobile value added services being launched by various players in the industry.

Cellebrum

  • Excuse Me Please - Trigger a call to self
  • Online Comedy - IVR based jokes
  • Select Caller List - Define a caller list or black-list (numbers can be barred). You can also play a message of your choice to the caller.
  • Background music - Music is played after the call is connected.
  • Voice chat - Chat with people without disclosing your identity.

Mauj

  • HeresyComposer - Create your own mobile greeting cards with the photos you clicked
  • PhotoArtPhotoArt -Paint a picture of someone you love or a place that you have been to
  • RingtoneStudioRingtoneStudio - Become a DJ and remix your existing ringtones to be unique
  • CameraFXCameraFX - Put a “heart” frame around your loved one’s photo.
  • Bhakti Sagar - Listen to religious discourses and hymns on your mobile
  • Gurbani - IVR-based service for Sikhs

Mobile2win

  • Wireless Recipes featuring Tarla Dalal
  • Mobile Yoga

BSNL opens Rs 21000 cr tender

Motorola, Ericsson, Siemens, ZTE and Nokia have submitted bids for BSNL’s tender for procuring equipment and installing GSM network of a total capacity of 45.5 million lines which opened on Monday. Chinese major Huawei didn’t participate in the bidding process.

The size of the order is likely to be about Rs 21,000 crore. Two out of the five will get the orders.

According to tender details, 60% of the order would go to the lowest bidder and 40% of the contract would be given to the second lowest bidder.

ITI-Alcatel has already got orders for the Western zone. The tender makes it mandatory for the vendors to set up manufacturing base in the country.

Related: BSNL floats world’s largest mobile tender

Veerchand Bothra

Mobile Marketer, Social Media enthusiast, Mobile Monday Mumbai founder, Creator of BlogStreet.com, Jhalak.mytoday.com

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