In a deal that gives it indirect entrance into the high-growth Indian Telecom market, Saudi Arabia's largest carrier Saudi Telecom Co. has bought a 25-percent piece of Malaysia's Maxis Communications for $3 billion.
As a result of this purchase, Saudi Telecom Co. will own 18.5 percent of GSM carrier Aircel, which is 74-percent owned by Aircel. Aircel provides services in Chennai, Tamil Nadu, West Bengal, Assam, Orissa, Jammu & Kashmir, Bihar, Himachal Pradesh and the North-East. It has a subscriber base of 5.5 million.
Saudi Telecom reportedly had been considering India for some time, this purchase is the first major investment outside Saudi Arabia for the government-owned carrier. "
Officials in the Middle Eastern country apparently have the same concerns over a national telco having ties with foreign carriers, but it looks like those concerns weren't enough to kill the deal. The deal may raise eyebrows of security concerns in India. I will be posting the developments on the blog
Indian telco's inrease oversea activities - Airtel enters European market; Reliance communication signs roaming pact with PBTL
Indian leading private telco, Airtel launched its first foray in telecom in the European market on Thursday, with the launch of its services in Jersey, Channel Islands. Jersey Airtel, a subsidiary of the Bharti Group, on Thursday announced the launch of its mobile services on the Island. The company will offer products and services under the Airtel-Vodafone brand to customers on the Island, over its full 2G, 3G and HSDPA enhanced network. Jersey, along with Guernsey, is a crown property off the coast of France, is one of the world’s leading offshore financial centres with an exclusive focus on financial services, and a playground for the rich and financially famous. Jersey’s GDP and per capital are among the highest in the world, topping most developed nations. The services are being launched under the Airtel-Vodafone brand name.
Customers are being offered significant discounts if they choose to keep their existing handset. Pre-paid customers will get flat rates across all networks in Jersey and another flat rate to all networks across the EU including UK. All of these are still unheard of in Europe, where customers mostly have to pay higher rates for calls from mobiles, to other networks, and so on.
In another move, Indian private telco, Reliance Communications, on Thursday announced a tie up with Pacific Bangladesh Telecom Limited (PBTL) to provide its customers seamless roaming in Bangladesh on CDMA handsets. Following the alliance with PBTL, which runs CDMA service under the name CityCell, Reliance CDMA users would now be able to roam in 200 countries, an RCom spokesperson said. For local and national calls, charges would be Rs 18 per minute while calls into India would cost Rs 29 per minute and incoming calls Rs 18 per minute. PBTL is a joint venture between Singapore Telecom and was the largest operator in Bangladesh. The tie-up will generate revenues from lot of user in West Bengal, Assam and the northeastern part of India who regularly visit Bangladesh.
Customers are being offered significant discounts if they choose to keep their existing handset. Pre-paid customers will get flat rates across all networks in Jersey and another flat rate to all networks across the EU including UK. All of these are still unheard of in Europe, where customers mostly have to pay higher rates for calls from mobiles, to other networks, and so on.
In another move, Indian private telco, Reliance Communications, on Thursday announced a tie up with Pacific Bangladesh Telecom Limited (PBTL) to provide its customers seamless roaming in Bangladesh on CDMA handsets. Following the alliance with PBTL, which runs CDMA service under the name CityCell, Reliance CDMA users would now be able to roam in 200 countries, an RCom spokesperson said. For local and national calls, charges would be Rs 18 per minute while calls into India would cost Rs 29 per minute and incoming calls Rs 18 per minute. PBTL is a joint venture between Singapore Telecom and was the largest operator in Bangladesh. The tie-up will generate revenues from lot of user in West Bengal, Assam and the northeastern part of India who regularly visit Bangladesh.
T-mobile's new hot service - Hotspot@home
HotSpot @Home is the newest one-stop-shop offering from T-Mobile USA, combining the power of Wi-Fi and T-Mobile's nationwide voice and data network, and allowing subscribers to gab as much as they want at home without burning minutes. The carrier says its customers can use their cellphones in a VoIP manner while at home or in a T-Mobile hot-spot-enabled area, and then switch back to the GSM/GPRS/EDGE wireless network when they exit hot-spot coverage. Calls also transfer from T-Mobile's network onto Wi-Fi.
T-Mobile HotSpot @Home is a first-of-its-kind service . Key components of the T-Mobile HotSpot @Home service include new mobile phones designed to seamlessly connect the user to a home Wi-Fi connection or T-Mobile HotSpot. The Samsung t409 and the Nokia 6086 are the first to market, each retailing for $49.99 with a two-year contract on a qualifying rate plan.
T-Mobile also partnered with router manufacturers D-Link and Linksys for Wi-Fi routers optimized for a first-rate calling experience with the T-Mobile HotSpot @Home service. These select routers are designed for simple setup and enhanced battery life for the handset, and T-Mobile says they help ensure voice calls are carried "with the utmost call quality." These routers have commonly available data features found on standard routers, and they reportedly work with customers' existing broadband connection. Consumers can choose which router to use with the service; each is currently offered at no charge with the HotSpot @Home service via mail-in rebate.
For a limited time, to kick off the launch of T-Mobile HotSpot @Home, the service can be added to any qualifying T-Mobile voice plan for only $9.99 per month for a single line, and $19.99 per month for up to five lines on a FamilyTime plan. This means five family members each can have unlimited calling from home over Wi-Fi for one price, when the service is added to a qualifying FamilyTime plan.
T-Mobile HotSpot @Home is a first-of-its-kind service . Key components of the T-Mobile HotSpot @Home service include new mobile phones designed to seamlessly connect the user to a home Wi-Fi connection or T-Mobile HotSpot. The Samsung t409 and the Nokia 6086 are the first to market, each retailing for $49.99 with a two-year contract on a qualifying rate plan.
T-Mobile also partnered with router manufacturers D-Link and Linksys for Wi-Fi routers optimized for a first-rate calling experience with the T-Mobile HotSpot @Home service. These select routers are designed for simple setup and enhanced battery life for the handset, and T-Mobile says they help ensure voice calls are carried "with the utmost call quality." These routers have commonly available data features found on standard routers, and they reportedly work with customers' existing broadband connection. Consumers can choose which router to use with the service; each is currently offered at no charge with the HotSpot @Home service via mail-in rebate.
For a limited time, to kick off the launch of T-Mobile HotSpot @Home, the service can be added to any qualifying T-Mobile voice plan for only $9.99 per month for a single line, and $19.99 per month for up to five lines on a FamilyTime plan. This means five family members each can have unlimited calling from home over Wi-Fi for one price, when the service is added to a qualifying FamilyTime plan.
Bharti to launch 3G services, Revenues from VAS expected to go up !
Bharti Airtel has completed trials of third generation services that it plans to introduce. The company is now awaiting the allotment of spectrum from the government to launch 3G services in India. Other telecom majors such as BSNL, Vodafone-Essar, Reliance Communications and Tata Teleservices are also carrying out trial runs of 3G appellations and services. According to company executives, the pilots included testing all high-speed internet applications, next generation gaming, video and wireless streaming. Bharti has also put processes in place for seamless migration of all value-added services to the 3G space from its current 2G networks.
Bharti is said to have successfully tried out IMS-based applications, a software platform in line with the latest 3G standards. This implies that content and application developers can use this platform to develop services for Bharti customers. Currently, about 10% of Bharti’s revenues come from value-added services (VAS). This figure is likely to increase to about 15% following the introduction of a slew of new data services following the introduction of 3G services. Operators are currently unable to launch 3G services as the radio frequency for these services are occupied by the country’s defence forces. This comes as the project to get the defence ministry to release 45 Mhz of spectrum (20 MHz for 2G and 25 MHz for 3G) is long overdue. As per the initial plan, the release was due in the second half of 2006, which was later extended to March 2007 and then to July 2007. With the department of telecom (DoT) and the defence ministry locking horns over the release of spectrum, the launch of 3G services is set to be further delayed.
Bharti is said to have successfully tried out IMS-based applications, a software platform in line with the latest 3G standards. This implies that content and application developers can use this platform to develop services for Bharti customers. Currently, about 10% of Bharti’s revenues come from value-added services (VAS). This figure is likely to increase to about 15% following the introduction of a slew of new data services following the introduction of 3G services. Operators are currently unable to launch 3G services as the radio frequency for these services are occupied by the country’s defence forces. This comes as the project to get the defence ministry to release 45 Mhz of spectrum (20 MHz for 2G and 25 MHz for 3G) is long overdue. As per the initial plan, the release was due in the second half of 2006, which was later extended to March 2007 and then to July 2007. With the department of telecom (DoT) and the defence ministry locking horns over the release of spectrum, the launch of 3G services is set to be further delayed.
Calling cards market is calling - Airtel says 'Wait' !
Bharti Airtel has put off its plan to kick off a series of tariff wars abroad with the launch of its virtual calling in global markets on account of the complexities and excess demand that the company faced with the launch of this service in the US. Bharti Airtel had launched calling cards in the US in 2006 and said this service would soon be extended to the top 10 countries in terms of the NRI population, which include Canada, the UK, Singapore, Malaysia, Saudi Arabia and other Gulf countries. As per industry estimates, the outgoing traffic from the US to India is about 450 million minutes per month, of which about 200 million minutes are through calling cards. Besides, close to 80% of the incoming calls to India are made from the top 10 NRI countries.
But now, the company has decided to defer the global expansion of this until the glitches faced in the US are solved. In the US, the demand was far higher than the capacity that was installed. Airtel therefore had to upgrade IN platform and augment the capacity. They also had some problems with the subscription process with regard to how customers signed up for this service. Airtel expect to address all issues in the US by August-end. The excess demand for its calling cards in the US—so much so that the back-end could not handle the load—was because the tariffs were reportedly 40% cheaper than the prevailing tariffs there. For instance, its offering of 7.9 cents per minute in the US resulted in AT&T slashing the tariffs for its India 60 Plus calling card from $14.99 per month (around 25 cents a minute) to $11.99 per month (around 20 cents a minute) for 60 minutes talktime to India. “
Airtel expects to be present in the other markets by March 2008 and is currently working on regulatory clearances and network agreements with other long distance carriers in these markets. According to Airtel spokesperson, another reason for the temporary delay was that Bharti did not want to make any compromises on the quality of service. “We have learnt from the US experience. As we take the Bharti Airtel brand outside India, the launch of this service offers us the best chance to make the first impression. We are cautious and we have to do it right as this also marks the foray of the Bharti brand. Our long-term positioning is therefore important as any of the Bharti Group companies can enter these markets in the future,” . After the launch of calling cards, Bharti is planning to target Indian corporates and other companies abroad that employ a large numbers of Indians. It plans to offer them a two-way business model—connectivity to and from India. Bharti’s logic for venturing into this segment in global markets stems from the popularity that calling cards enjoy in these countries.
But now, the company has decided to defer the global expansion of this until the glitches faced in the US are solved. In the US, the demand was far higher than the capacity that was installed. Airtel therefore had to upgrade IN platform and augment the capacity. They also had some problems with the subscription process with regard to how customers signed up for this service. Airtel expect to address all issues in the US by August-end. The excess demand for its calling cards in the US—so much so that the back-end could not handle the load—was because the tariffs were reportedly 40% cheaper than the prevailing tariffs there. For instance, its offering of 7.9 cents per minute in the US resulted in AT&T slashing the tariffs for its India 60 Plus calling card from $14.99 per month (around 25 cents a minute) to $11.99 per month (around 20 cents a minute) for 60 minutes talktime to India. “
Airtel expects to be present in the other markets by March 2008 and is currently working on regulatory clearances and network agreements with other long distance carriers in these markets. According to Airtel spokesperson, another reason for the temporary delay was that Bharti did not want to make any compromises on the quality of service. “We have learnt from the US experience. As we take the Bharti Airtel brand outside India, the launch of this service offers us the best chance to make the first impression. We are cautious and we have to do it right as this also marks the foray of the Bharti brand. Our long-term positioning is therefore important as any of the Bharti Group companies can enter these markets in the future,” . After the launch of calling cards, Bharti is planning to target Indian corporates and other companies abroad that employ a large numbers of Indians. It plans to offer them a two-way business model—connectivity to and from India. Bharti’s logic for venturing into this segment in global markets stems from the popularity that calling cards enjoy in these countries.
Saudi telecom to buy 25% of Maxis Communications
Saudi Telecom Co, the largest phone company in Saudi Arabia, bought 25 per cent of Malaysia's biggest mobile-phone operator Maxis Communications Bhd to reach out to more subscribers. Saudi Telecom paid 11.4 billion riyals ($3 billion) for the acquisition, its first major foreign purchase, the company said on Tuesday in a statement posted on the Saudi stock market Web site. The deal will give the company access to a market of 1.4 billion people. “The transaction will be financed through borrowing and self-financing,” the state-controlled company said. Phone companies in Persian Gulf monarchies are expanding as domestic markets mature and demand increases. Saudi Telecom competes with Etihad Etisalat in Saudi Arabia. A third mobile-phone company, Saudi Mobile Telecommunications Co, will enter the market next year.
Saudi Telecom was looking at markets in the Middle East and Asia, and this purchase makes sense because both markets share the same culture, and Maxis services a huge population in Malaysia, India and soon Singapore. The transaction would value Maxis at about $12 billion. Maxis is controlled by T Ananda Krishnan, Malaysia's second-richest man.
I was thinking why the Indian companies are not aggressively moving into the South East Asian, Middle Eastern and African markets. They are rather agreesively fighting for the telecom space within India, in the process cutting each others margins heavily. The rates of telecom services in India are too low and the companies should start looking out of India, instead of chopping each others profits within India.
Saudi Telecom was looking at markets in the Middle East and Asia, and this purchase makes sense because both markets share the same culture, and Maxis services a huge population in Malaysia, India and soon Singapore. The transaction would value Maxis at about $12 billion. Maxis is controlled by T Ananda Krishnan, Malaysia's second-richest man.
I was thinking why the Indian companies are not aggressively moving into the South East Asian, Middle Eastern and African markets. They are rather agreesively fighting for the telecom space within India, in the process cutting each others margins heavily. The rates of telecom services in India are too low and the companies should start looking out of India, instead of chopping each others profits within India.
Verizon to offer wireless wallets to their subscribers
Verizon Wireless has announced their m-commerce service, enabled as a BREW application from technology partner obopay as the first mobile payment offering for any major U.S. carrier, will be available in the coming weeks. The Obopay service will allow customers to receive, send and spend money via their mobile phones, check their account balances, collect money owed from other mobile users, view transaction histories and invite friends to use the system.
With the recent announcement of Verizon Wireless about its partnership with Obopay, analysts are seeing a bright future for mobile payments and for mobile commerce as a whole. Even research firm Strategy Analytics Wireless Media Strategies has reaffirmed its forecast on contactless payment. Wireless Media Strategies Service in their December 2006 report has predicted significant activity in the form of payment and ticketing trials towards the end of 2007 and maintain our projected outlook of $36 billion in spending via contactless payment interfaces on mobile phones by 2011.
With the recent announcement of Verizon Wireless about its partnership with Obopay, analysts are seeing a bright future for mobile payments and for mobile commerce as a whole. Even research firm Strategy Analytics Wireless Media Strategies has reaffirmed its forecast on contactless payment. Wireless Media Strategies Service in their December 2006 report has predicted significant activity in the form of payment and ticketing trials towards the end of 2007 and maintain our projected outlook of $36 billion in spending via contactless payment interfaces on mobile phones by 2011.
Future growth trends in mobile industry - Greener pastures ahead !!
During last few months I have come accross several reports on future growth projections on mobile industry. Some of this data have already been posted on my blog. I thoought it was a good idea to compile some of these projections at a single place so that the readers can conviniently co-relate them. The various sources from where these projctions have been taken are also quoted below.
Mobile advertising worth $14 billion in 4yrs (2011)
Predictions and suppositions on the future evolution of mobile advertising have been going by for some time now. The latest comes from a Strategy Analytics report and says that advertisers hope on reaching more than USD14 Billion by 2011.Still, just recently, debates have emphasized the fact that mobile advertising is considered by many companies as being rather risky and less profitable than the TV alternative. This comes from the fact that the video content they use is still in a primary state and there is room for a great amount of improvement. One thing that might attract companies as to choose mobile phones for placing their advertisements is exactly the fact that this environment is yet little used. This means that it proves to be considerably easier for an announcement to stand out and be fully received by the handset users when there are no other adverts around to distract him from this specific one. The outlook for mobile advertising spend has significantly advanced in the past 12 months. The supply of advertising inventory is rapidly increasing as mobile publishers look to develop advertising as a revenue stream. Major mobile network operators like SprintNextel, Verizon Wireless and Vodafone have all accelerated plans to sell advertising within their mobile media channels and advertisers appear to be responding positively. The Strategy Analytics report also regards game downloads, mobile broadcasting and video on demand, all used as spaces for mobile advertising. Even more, several advertising companies have teamed up with mobile software and service providers in order to better develop means of reaching high profit rates.
Mobile apps worth $66 billion over 5 years
The transformation of variousenterprise applications from fixed to mobile access technology will generate more than $66 billion in carrier service revenue over the nextfive years, says a new market research report from Insight Research Corp.By the close of 2007, service revenues generated by mobile applicationstraversing wired and wireless networks in the US will reach just over $9billion; by 2012, the value of services revenue supporting thoseapplications is forecasted to grow to nearly $13 billion, according to thenew market study. Insight's newly released market analysis report, "The Mobile Workforceand Enterprise Applications 2007-2012," states that telecommunicationsindustry consolidation and job growth in the services sector are bothspeeding a transformation of various enterprise applications to a mobilityenvironment. Citing Bureau of Labor statistics, the study finds thatoccupations working outside of corporate offices are increasing at a muchfaster rate than average employment growth. At the same time, consolidationwithin the telecommunications industry has put all of the requisite pieceparts required to deliver integrated wireless applications within the handsof the remaining companies. "Analyze AT&T, Sprint, or Verizon and you will find that each companynow commands the local, metro, long-haul, and wireless assets required todeliver an end-to-end corporate solution," says Robert Rosenberg, Presidentof Insight. "Equally as important is the fact that these companies areshifting capital expenditures from infrastructure to service control,managed services, and applications. This shift in resource allocations willbenefit enterprises looking to mobilize their traditional applications, soin the months ahead we see a real rush to develop mobile applications,"Rosenberg concludes.
Mobile games worth 11.2 billion by 2010
Total global revenues from mobile games are forecast to increase from USD 2.6 billion (2005) to USD 11.2 billion by 2010, according to Mobile Games, a new strategic research report from Informa Telecoms and Media.
Downloads will account for around two-thirds of total global revenues through 2010, but online multiplayer traffic will start to generate significant income for mobile operators, as cellcos launch more multiplayer games and introduce community features that will encourage user uptake. By 2010, online multiplayer games will generate 20.5 percent of total global revenues.
"The Asia-Pacific and Europe will continue to dominate the global mobile gaming market in terms of revenues and users," says Pamela Clark-Dickson, co-author of the report, and editor of continuous research service Mobile Games Analyst, published by Informa Telecoms and Media. "However the U.S. is set to become the second largest individual market by revenues and users, behind Japan and China respectively, by 2010."
Meanwhile the mobile games industry still has work to do to encourage mass-market adoption of mobile games. This year, just 6.7 percent of all mobile subscribers globally will download and play a mobile game, rising to 15.2 percent by 2010.
"The cellcos' strategy of targeting hardcore gamers was the right thing to do when the market was in its early adopter phase," says Stuart Dredge, co-author of Mobile Games and reporter at Mobile Games Analyst. "But now what the market needs is mass-market take-up, which means that the mobile games industry has to provide games that will encourage more casual users to play."
Merger and acquisition activity is thinning out the mobile games market, especially in the games development and publishing sectors. The race is on to acquire the smaller mobile games companies whose survival to date has relied on the production and distribution of good quality games based on desirable licenses, but which haven't been able to scale their operations.
"Previously consolidation occurred mainly among mobile games companies but recent acquisitions and investments by vendors such as RealNetworks and Cisco Systems attest to a growing interest in this sector from the wider digital media and information technology industry," says Clark-Dickson.
Mobile games companies will also likely embark on brand-building and consumer marketing activities during 2005, as they launch their own direct-to-consumer offerings, and seek to build the profile of mobile gaming in the marketplace.
While the cellcos' decks will continue to be the primary source of games for mobile users, games companies have also started distributing their titles through third-party content portals and through bricks-and-mortar retailers.
"Multimedia memory cards will become an increasingly important games delivery mechanism at retail, particularly for 3D and feature-rich 2D titles," says Dredge. MMCs will contribute 9.1 percent of total global revenues for mobile games by 2010.
Mobile entertainment worth $76 billion by 2011
The mobile entertainment industry, if actualized, could reach a potential of $76 billion by the year 2011, a recent study conducted by technology market analysts Juniper Research claims. Made up of music, games, TV, and sports, the entertainment business via mobile phones has a set stage for an explosion of mobile entertainment in the coming years.
“The face of mobile entertainment is expected to change significantly over the next five years as next generation mobile services continue to be rolled out around the globe and take up steadily increases,” said Juniper Research Mobile Entertainment principal author Bruce Gibson in a company press release.
This mobile entertainment industry could reach the $76 billion mark, up from $17.3 billion in 2006. One of the main reasons for the potential boom is the current wave of third generation networks, which offer the bandwith to support mobile entertainment . Other factors include the rise of mobile video feeds and live mobile TV. Supplemented by a growing market in Asia, the mobile entertainment industry could grow along with it.
Juniper Research warns opening up a Pandora’s box for perturbed mobile users. The possibility for the monetization may be eclipsed by possible pitfalls such as gambling or pornography. These two factors alone could impinge on the successes of this untapped market.
“Whilst the potential to generate dramatically increased revenues is certainly there, many uncertainties affecting sections of the market still exist and could put a break on growth – the development of legislative environments for mobile gambling and adult content, and the success of broadcast mobile TV trails currently underway or planned, are just two examples,” said Gibson.
Mobile social networks worth $13.1 billion by 2011
Red Herring (04.16.07) reported that according to London-based Informa Telecon and Media mobile communities and user generated content (often bracketed together as social networking) will be worth $13.1 billion by 2011.
Mobile content to reach $43 billion by 2010
The global market for mobile phone premium content will exceed US$43 billion by 2010, according to a new study by iSuppli. This compares to the figure in 2004 which barely reached US$5.2 billion. Over the next four years, the market for such extra mobile services as music, gaming and video will expand at an annual rate of 42% argues the US-based research company.
According to Mark Kirstein, vice president of multimedia services and content for iSuppli, "After years of hyper growth, mobile phone markets in several major regions around the world are maturing, resulting in slower subscriber growth and declining average revenue per user for carriers. Meanwhile, new 3G networks offer increased bandwidth, but require compelling applications and content to drive revenue and provide a return on investment to operators. Against this backdrop, mobile-service carriers and content providers are establishing new business models to capture the growing opportunity."
The company believes that the main driver of premium mobile content services will be music, led by ring tones and ring tunes. iSuppli believes that this market alone was worth US$3.8 billion in 2004 and grew very quickly last year as the industry made a major transition from traditional polyphonic ring tones to ring tunes. Coming a close second in terms of growing popularity is mobile gaming, which the company believes grew by 80% in revenue terms last year. However, mobile video is seen as the best long term bet for expanding premium content services, even though the market for such services is still in its infancy.
The company argues that the success of mobile TV depends entirely on new phone deployments. According to iSuppli even with reasonably strong adoption of mobile-TV technology and subscribers, the installed base of TV-capable phones will only represent 12% of the total by 2010.
Mobile advertising worth $14 billion in 4yrs (2011)
Predictions and suppositions on the future evolution of mobile advertising have been going by for some time now. The latest comes from a Strategy Analytics report and says that advertisers hope on reaching more than USD14 Billion by 2011.Still, just recently, debates have emphasized the fact that mobile advertising is considered by many companies as being rather risky and less profitable than the TV alternative. This comes from the fact that the video content they use is still in a primary state and there is room for a great amount of improvement. One thing that might attract companies as to choose mobile phones for placing their advertisements is exactly the fact that this environment is yet little used. This means that it proves to be considerably easier for an announcement to stand out and be fully received by the handset users when there are no other adverts around to distract him from this specific one. The outlook for mobile advertising spend has significantly advanced in the past 12 months. The supply of advertising inventory is rapidly increasing as mobile publishers look to develop advertising as a revenue stream. Major mobile network operators like SprintNextel, Verizon Wireless and Vodafone have all accelerated plans to sell advertising within their mobile media channels and advertisers appear to be responding positively. The Strategy Analytics report also regards game downloads, mobile broadcasting and video on demand, all used as spaces for mobile advertising. Even more, several advertising companies have teamed up with mobile software and service providers in order to better develop means of reaching high profit rates.
Mobile apps worth $66 billion over 5 years
The transformation of variousenterprise applications from fixed to mobile access technology will generate more than $66 billion in carrier service revenue over the nextfive years, says a new market research report from Insight Research Corp.By the close of 2007, service revenues generated by mobile applicationstraversing wired and wireless networks in the US will reach just over $9billion; by 2012, the value of services revenue supporting thoseapplications is forecasted to grow to nearly $13 billion, according to thenew market study. Insight's newly released market analysis report, "The Mobile Workforceand Enterprise Applications 2007-2012," states that telecommunicationsindustry consolidation and job growth in the services sector are bothspeeding a transformation of various enterprise applications to a mobilityenvironment. Citing Bureau of Labor statistics, the study finds thatoccupations working outside of corporate offices are increasing at a muchfaster rate than average employment growth. At the same time, consolidationwithin the telecommunications industry has put all of the requisite pieceparts required to deliver integrated wireless applications within the handsof the remaining companies. "Analyze AT&T, Sprint, or Verizon and you will find that each companynow commands the local, metro, long-haul, and wireless assets required todeliver an end-to-end corporate solution," says Robert Rosenberg, Presidentof Insight. "Equally as important is the fact that these companies areshifting capital expenditures from infrastructure to service control,managed services, and applications. This shift in resource allocations willbenefit enterprises looking to mobilize their traditional applications, soin the months ahead we see a real rush to develop mobile applications,"Rosenberg concludes.
Mobile games worth 11.2 billion by 2010
Total global revenues from mobile games are forecast to increase from USD 2.6 billion (2005) to USD 11.2 billion by 2010, according to Mobile Games, a new strategic research report from Informa Telecoms and Media.
Downloads will account for around two-thirds of total global revenues through 2010, but online multiplayer traffic will start to generate significant income for mobile operators, as cellcos launch more multiplayer games and introduce community features that will encourage user uptake. By 2010, online multiplayer games will generate 20.5 percent of total global revenues.
"The Asia-Pacific and Europe will continue to dominate the global mobile gaming market in terms of revenues and users," says Pamela Clark-Dickson, co-author of the report, and editor of continuous research service Mobile Games Analyst, published by Informa Telecoms and Media. "However the U.S. is set to become the second largest individual market by revenues and users, behind Japan and China respectively, by 2010."
Meanwhile the mobile games industry still has work to do to encourage mass-market adoption of mobile games. This year, just 6.7 percent of all mobile subscribers globally will download and play a mobile game, rising to 15.2 percent by 2010.
"The cellcos' strategy of targeting hardcore gamers was the right thing to do when the market was in its early adopter phase," says Stuart Dredge, co-author of Mobile Games and reporter at Mobile Games Analyst. "But now what the market needs is mass-market take-up, which means that the mobile games industry has to provide games that will encourage more casual users to play."
Merger and acquisition activity is thinning out the mobile games market, especially in the games development and publishing sectors. The race is on to acquire the smaller mobile games companies whose survival to date has relied on the production and distribution of good quality games based on desirable licenses, but which haven't been able to scale their operations.
"Previously consolidation occurred mainly among mobile games companies but recent acquisitions and investments by vendors such as RealNetworks and Cisco Systems attest to a growing interest in this sector from the wider digital media and information technology industry," says Clark-Dickson.
Mobile games companies will also likely embark on brand-building and consumer marketing activities during 2005, as they launch their own direct-to-consumer offerings, and seek to build the profile of mobile gaming in the marketplace.
While the cellcos' decks will continue to be the primary source of games for mobile users, games companies have also started distributing their titles through third-party content portals and through bricks-and-mortar retailers.
"Multimedia memory cards will become an increasingly important games delivery mechanism at retail, particularly for 3D and feature-rich 2D titles," says Dredge. MMCs will contribute 9.1 percent of total global revenues for mobile games by 2010.
Mobile entertainment worth $76 billion by 2011
The mobile entertainment industry, if actualized, could reach a potential of $76 billion by the year 2011, a recent study conducted by technology market analysts Juniper Research claims. Made up of music, games, TV, and sports, the entertainment business via mobile phones has a set stage for an explosion of mobile entertainment in the coming years.
“The face of mobile entertainment is expected to change significantly over the next five years as next generation mobile services continue to be rolled out around the globe and take up steadily increases,” said Juniper Research Mobile Entertainment principal author Bruce Gibson in a company press release.
This mobile entertainment industry could reach the $76 billion mark, up from $17.3 billion in 2006. One of the main reasons for the potential boom is the current wave of third generation networks, which offer the bandwith to support mobile entertainment . Other factors include the rise of mobile video feeds and live mobile TV. Supplemented by a growing market in Asia, the mobile entertainment industry could grow along with it.
Juniper Research warns opening up a Pandora’s box for perturbed mobile users. The possibility for the monetization may be eclipsed by possible pitfalls such as gambling or pornography. These two factors alone could impinge on the successes of this untapped market.
“Whilst the potential to generate dramatically increased revenues is certainly there, many uncertainties affecting sections of the market still exist and could put a break on growth – the development of legislative environments for mobile gambling and adult content, and the success of broadcast mobile TV trails currently underway or planned, are just two examples,” said Gibson.
Mobile social networks worth $13.1 billion by 2011
Red Herring (04.16.07) reported that according to London-based Informa Telecon and Media mobile communities and user generated content (often bracketed together as social networking) will be worth $13.1 billion by 2011.
Mobile content to reach $43 billion by 2010
The global market for mobile phone premium content will exceed US$43 billion by 2010, according to a new study by iSuppli. This compares to the figure in 2004 which barely reached US$5.2 billion. Over the next four years, the market for such extra mobile services as music, gaming and video will expand at an annual rate of 42% argues the US-based research company.
According to Mark Kirstein, vice president of multimedia services and content for iSuppli, "After years of hyper growth, mobile phone markets in several major regions around the world are maturing, resulting in slower subscriber growth and declining average revenue per user for carriers. Meanwhile, new 3G networks offer increased bandwidth, but require compelling applications and content to drive revenue and provide a return on investment to operators. Against this backdrop, mobile-service carriers and content providers are establishing new business models to capture the growing opportunity."
The company believes that the main driver of premium mobile content services will be music, led by ring tones and ring tunes. iSuppli believes that this market alone was worth US$3.8 billion in 2004 and grew very quickly last year as the industry made a major transition from traditional polyphonic ring tones to ring tunes. Coming a close second in terms of growing popularity is mobile gaming, which the company believes grew by 80% in revenue terms last year. However, mobile video is seen as the best long term bet for expanding premium content services, even though the market for such services is still in its infancy.
The company argues that the success of mobile TV depends entirely on new phone deployments. According to iSuppli even with reasonably strong adoption of mobile-TV technology and subscribers, the installed base of TV-capable phones will only represent 12% of the total by 2010.
Braodband satellite industry revenues to increase at an average annual rate of 11 percent during next five years !!
According to Northern Sky Research Ltd. (NSR), service revenue for the broadband satellite industry will increase on a global basis at an average annual rate of more than 11 percent during the next five years, with the fastest growth coming for consumer-class satellite broadband Internet access services like North America's WildBlue and HughesNet.
Broadband satellite Internet services and satellite IP trunking are experiencing rapid subscriber growth, which in turn translates into greater service revenue. In addition, single-site satellite broadband services have had success in markets outside of North America, like Thailand and Australia, and new service launches in Europe and possibly elsewhere in the world will help to generate service revenue growth in excess of 22 percent per year through 2011.
Service revenue from the IP trunking segment actually will decline on a global basis as demand for trunking continues to shift from satellite to undersea cable and fiber, the group says, though some regional markets like Africa will see positive gains in the coming years as demand continues to grow in specific countries.
Solid, steady growth in classic enterprise & SME broadband VSAT services along with continued growth in shared-hub and managed services in most regions of the world will enable service revenue to increase at a steady rate through 2011. In addition, increasingly fat bandwidth pipes for existing broadband VSAT networks will increase service revenues as companies take advantage of standardization to carry on adding additional IP-based applications to their enterprise networks.
Turning to customer premise equipment (CPE) sales, total CPE revenue for the entire market are forecast to remain in the $400 million-$500 million range per year through 2011. The declining CPE cost will be one of the key factors in driving up subscriber uptake for single site satellite broadband Internet access services and will push growth in the enterprise & SME broadband VSAT networking segment as well.
Another trend in the enterprise & SME segment is that better performance is being obtained in CPEs of lower or the same price. This is especially true as bandwidth-saving technologies like DVB-S2 and Adaptive Coding & Modulation are adopted and ever-smaller broadband VSAT networks become financially viable.
The majority of CPE revenues are generated in the enterprise & SME broadband VSAT networking segment. "Interestingly, NSR even forecasts CPE revenues to decline substantially in a number of regional markets. Again, this is a positive sign that does not point to slowing demand for services but a lowering of one of the important cost barriers to broadband satellite services uptake" - as per the report.
Broadband satellite Internet services and satellite IP trunking are experiencing rapid subscriber growth, which in turn translates into greater service revenue. In addition, single-site satellite broadband services have had success in markets outside of North America, like Thailand and Australia, and new service launches in Europe and possibly elsewhere in the world will help to generate service revenue growth in excess of 22 percent per year through 2011.
Service revenue from the IP trunking segment actually will decline on a global basis as demand for trunking continues to shift from satellite to undersea cable and fiber, the group says, though some regional markets like Africa will see positive gains in the coming years as demand continues to grow in specific countries.
Solid, steady growth in classic enterprise & SME broadband VSAT services along with continued growth in shared-hub and managed services in most regions of the world will enable service revenue to increase at a steady rate through 2011. In addition, increasingly fat bandwidth pipes for existing broadband VSAT networks will increase service revenues as companies take advantage of standardization to carry on adding additional IP-based applications to their enterprise networks.
Turning to customer premise equipment (CPE) sales, total CPE revenue for the entire market are forecast to remain in the $400 million-$500 million range per year through 2011. The declining CPE cost will be one of the key factors in driving up subscriber uptake for single site satellite broadband Internet access services and will push growth in the enterprise & SME broadband VSAT networking segment as well.
Another trend in the enterprise & SME segment is that better performance is being obtained in CPEs of lower or the same price. This is especially true as bandwidth-saving technologies like DVB-S2 and Adaptive Coding & Modulation are adopted and ever-smaller broadband VSAT networks become financially viable.
The majority of CPE revenues are generated in the enterprise & SME broadband VSAT networking segment. "Interestingly, NSR even forecasts CPE revenues to decline substantially in a number of regional markets. Again, this is a positive sign that does not point to slowing demand for services but a lowering of one of the important cost barriers to broadband satellite services uptake" - as per the report.
Oiling the rural connectivity - Idea Cellular uses biodiesel to fuel its BTS's power !
Indian mobile operator Idea Cellular, in an attempt to bring cellular phone service to remote areas where the electric supply is at best spotty, has begun installing mobile base stations powered by fish oil and used frying oil from local restaurants. It's believed to be the first time in the world that biofuel has powered a cell phone installation.
The oil is processed locally into biodiesel fuel and used to fuel the generators that power the base stations. So far four base stations have been installed in the Indian state of Maharashtra by Ericsson for Idea, using a grant from the GSM Association's Development Fund. The four sites were described by Ericsson as "greenfield sites that have not previously had access to a mobile network and are located in areas with unreliable power supply."
Exploring alternative power solutions, such as biofuels, is key to the development of cost-effective ways to extend mobile networks to the 20 percent of the world's population that don't have coverage today. The three companies pointed out that an important factor is that the biofuel is produced locally, creating employment in rural areas while reducing the need for transportation. Biodiesel has a much lower impact on the environment than conventional diesel, they also pointed out. The cleaner burning renewable fuel also requires fewer site visits and also extends the life of the base station generator, reducing operator costs, according to the companies.
The use of fish and cooking oil, while novel and undoubtedly an interesting recycling technique, is only temporary. Eventually the biodiesel for the cellular base stations is going to come from oil made from the seeds of the Jatropha Curcas, a tree being widely promoted worldwide as a biofuel source. That tree is said to yield four times as much biofuel as soybeans for a given size piece of land, and about half as much as highly cultivated corn. Unlike corn, though, Jathropha will grow in wastelands. India has been pushing use of Jathropha in a huge range of applications, from the biodiesel fueling the cellular base stations to use of a Jathropha extract as an anti-constipation medicine. According to an article in Wikipedia, the rail line between Mumbai and Delhi is planted with Jatropha and the train itself runs on 15-20 percent biodiesel.
The oil is processed locally into biodiesel fuel and used to fuel the generators that power the base stations. So far four base stations have been installed in the Indian state of Maharashtra by Ericsson for Idea, using a grant from the GSM Association's Development Fund. The four sites were described by Ericsson as "greenfield sites that have not previously had access to a mobile network and are located in areas with unreliable power supply."
Exploring alternative power solutions, such as biofuels, is key to the development of cost-effective ways to extend mobile networks to the 20 percent of the world's population that don't have coverage today. The three companies pointed out that an important factor is that the biofuel is produced locally, creating employment in rural areas while reducing the need for transportation. Biodiesel has a much lower impact on the environment than conventional diesel, they also pointed out. The cleaner burning renewable fuel also requires fewer site visits and also extends the life of the base station generator, reducing operator costs, according to the companies.
The use of fish and cooking oil, while novel and undoubtedly an interesting recycling technique, is only temporary. Eventually the biodiesel for the cellular base stations is going to come from oil made from the seeds of the Jatropha Curcas, a tree being widely promoted worldwide as a biofuel source. That tree is said to yield four times as much biofuel as soybeans for a given size piece of land, and about half as much as highly cultivated corn. Unlike corn, though, Jathropha will grow in wastelands. India has been pushing use of Jathropha in a huge range of applications, from the biodiesel fueling the cellular base stations to use of a Jathropha extract as an anti-constipation medicine. According to an article in Wikipedia, the rail line between Mumbai and Delhi is planted with Jatropha and the train itself runs on 15-20 percent biodiesel.
Saudi Arabia's Cellular operator 'Hits' planning to create a pan-African network!
Saudi Arabia cellular carrier Hits has set up an African subsidiary funded with $1 billion and chartered to attempt to create a pan-Africa company operating across eight countries by 2012.
The new unit - Hits Africa - starts out life with a controlling stake in Liberian mobile operator Liberiacel, to soon be renamed Hits Liberia; Hits bought the Liberia property in March. The company reportedly is on the verge of receiving licenses in the Democratic Republic of Congo and Tanzania, and it says it is seeking more in at least four other countries, reportedly including Nigeria, Niger, Burundi and Ethiopia. Hits' goal is said to be to create the "first African converged player" with between 4 million and 6 million subscribers within five years.
The new African unit of Hits reportedly already has put together the team it expects to use to build its African empire. That group starts with China's Huawei, which apparently will provide the wireless network hardware. Others chosen include Devoe Team, a French company specializing in technical project management solutions; project management company MCM of Singapore; and telecom legal consultant Squire Sanders.
The new unit - Hits Africa - starts out life with a controlling stake in Liberian mobile operator Liberiacel, to soon be renamed Hits Liberia; Hits bought the Liberia property in March. The company reportedly is on the verge of receiving licenses in the Democratic Republic of Congo and Tanzania, and it says it is seeking more in at least four other countries, reportedly including Nigeria, Niger, Burundi and Ethiopia. Hits' goal is said to be to create the "first African converged player" with between 4 million and 6 million subscribers within five years.
The new African unit of Hits reportedly already has put together the team it expects to use to build its African empire. That group starts with China's Huawei, which apparently will provide the wireless network hardware. Others chosen include Devoe Team, a French company specializing in technical project management solutions; project management company MCM of Singapore; and telecom legal consultant Squire Sanders.
Mobile WiMax will connect 8 percent of world's 1.1 billion mobile broadband subscribers by 2012 !!!
According to new research from Parks Associates - Mobile WiMax will connect 8 percent of the world's 1.1 billion mobile broadband subscribers by 2012, accounting for nearly 88 million users worldwide, The firm also forecasts 52 percent of these subscribers will be from Asian countries, while North and South America will account for another 28 percent.
Today, most existing WiMAX deployments are the province of aspiring start-up service providers or incumbent telecom carriers looking to fill coverage gaps. The imminent availability of commercial products and increasing availability of spectrum around the world will change the market for Mobile WiMAX and make it viable among major service providers. Taiwan alone will have 8 million Mobile WiMAX subscribers by 2012.
Approximately 160 million cellular subscribers (6 percent of all cellular subscribers) were using a mobile broadband service at the end of 2006, Parks adds. Two-thirds of these mobile broadband subscribers used UMTS technology, and the remainder used CDMA EV-DO.
"Both Mobile WiMAX and UMTS/HSDPA technologies will gain market share in the next several years, at the expense of CDMA EVDO," Cai says. "TD-SCDMA will also have a meaningful market share due to its strong foothold in China, the largest mobile market in the world."
Today, most existing WiMAX deployments are the province of aspiring start-up service providers or incumbent telecom carriers looking to fill coverage gaps. The imminent availability of commercial products and increasing availability of spectrum around the world will change the market for Mobile WiMAX and make it viable among major service providers. Taiwan alone will have 8 million Mobile WiMAX subscribers by 2012.
Approximately 160 million cellular subscribers (6 percent of all cellular subscribers) were using a mobile broadband service at the end of 2006, Parks adds. Two-thirds of these mobile broadband subscribers used UMTS technology, and the remainder used CDMA EV-DO.
"Both Mobile WiMAX and UMTS/HSDPA technologies will gain market share in the next several years, at the expense of CDMA EVDO," Cai says. "TD-SCDMA will also have a meaningful market share due to its strong foothold in China, the largest mobile market in the world."
Mobile handset accessories will generate $80 billions of revenues by 2012!!
According to ABI Research - The market for mobile-phone accessories will generate more than $32 billion in revenues this year, more than the $28 billion expected from the smartphone market.
Some 77 percent of these revenues will come from the sales of "after-market" accessories and the remaining from "in-box" accessories shipments. The firm expects the market for handset accessories to grow steadily in the next five years, generating more than $80 billion in revenues in 2012.
Handset vendors and mobile operators are showing greater interest as accessories provide high margins and also opportunities to promote their brand and expand their product offerings. The growing interest among mobile operators is also driven by the realization that mobile phone accessories can lead to higher ARPUs.
Handset vendors now recognize that to increase sales of their high-end wireless handsets and smartphones, they need to provide accessories that allow users to fully enjoy and benefit from the features provided in those handsets. Nokia is addressing the handset accessory market with a distinctive approach of "mobile enhancement" products, while
Motorola is playing special emphasis on the growing "personalization" and "self-expression" trends.
Some 77 percent of these revenues will come from the sales of "after-market" accessories and the remaining from "in-box" accessories shipments. The firm expects the market for handset accessories to grow steadily in the next five years, generating more than $80 billion in revenues in 2012.
Handset vendors and mobile operators are showing greater interest as accessories provide high margins and also opportunities to promote their brand and expand their product offerings. The growing interest among mobile operators is also driven by the realization that mobile phone accessories can lead to higher ARPUs.
Handset vendors now recognize that to increase sales of their high-end wireless handsets and smartphones, they need to provide accessories that allow users to fully enjoy and benefit from the features provided in those handsets. Nokia is addressing the handset accessory market with a distinctive approach of "mobile enhancement" products, while
Motorola is playing special emphasis on the growing "personalization" and "self-expression" trends.
Average American cell phone user keeps his handset for 17.5 months!!
According to a new study by J.D. Power and Associates, the average cellular phone user is keeping his handset 17.5 months, longer than has been the case in the past. The length of ownership is up from 16.6 months in just half a year - the consumer survey house's last reporting period was November. While the difference may not seem that great, it is the first increase in average ownership spotted by J.D. Power since way back in 2002, when the average length of ownership was 18.4 months.
"One possible reason for this significant increase in the length of handset ownership is that more customers are initiating or renewing their service contracts for a longer period -- typically for two years, as opposed to just one year, which was customary a few years ago," said Kirk Parsons, senior director of wireless services at J.D. Power.
Parsons also warned that the increasing length of ownership may be a double-edged sword for carrier. "While these longer contracts help wireless carriers recover the costs associated with offering subsidized cell phones, customers tend to hold on to their current cell phones longer to avoid termination fees when switching service, which may ultimately lead to lower renewal rates," he said.
In addition to keeping phones longer, the J.D. Power study also documents a continued decline in the amount American consumers pay for their handsets, a total it said has declined from an average of $103 in 2002 to $93 this year. And 36 percent of those surveyed - 21,520 cellphone users who had their phones for two years or less - said they got their handset for free, up from 28 percent five years ago.
"It's clear that wireless service carriers are using mobile phones as bait to increase consumer traffic, applying discounts either through rebates or free limited-time offers," said Parsons. Again, though, he had a warning: "The problem with this strategy is that, in most cases, the discounted handsets being offered are older models, which typically lack the latest technological advancements or desired design features."
Other findings of interest in the J.D. Power study included:
>>69 percent of all cell phones owned are a clamshell design, an increase of 19 percent from last year. That compares to 29 percent for the candy-bar style, and 2 percent for the slide-cover design.
>>Handset features used most frequently are: Speakerphone (51 percent); camera (35 percent); services to send/receive short messages (22 percent); and gaming (16 percent).
>>More than one-half of all current wireless users compared other handset brands before selecting their current wireless phone. Those customers who compare phones during the selection process are more likely to be satisfied overall with their current handset than those who do not.
"One possible reason for this significant increase in the length of handset ownership is that more customers are initiating or renewing their service contracts for a longer period -- typically for two years, as opposed to just one year, which was customary a few years ago," said Kirk Parsons, senior director of wireless services at J.D. Power.
Parsons also warned that the increasing length of ownership may be a double-edged sword for carrier. "While these longer contracts help wireless carriers recover the costs associated with offering subsidized cell phones, customers tend to hold on to their current cell phones longer to avoid termination fees when switching service, which may ultimately lead to lower renewal rates," he said.
In addition to keeping phones longer, the J.D. Power study also documents a continued decline in the amount American consumers pay for their handsets, a total it said has declined from an average of $103 in 2002 to $93 this year. And 36 percent of those surveyed - 21,520 cellphone users who had their phones for two years or less - said they got their handset for free, up from 28 percent five years ago.
"It's clear that wireless service carriers are using mobile phones as bait to increase consumer traffic, applying discounts either through rebates or free limited-time offers," said Parsons. Again, though, he had a warning: "The problem with this strategy is that, in most cases, the discounted handsets being offered are older models, which typically lack the latest technological advancements or desired design features."
Other findings of interest in the J.D. Power study included:
>>69 percent of all cell phones owned are a clamshell design, an increase of 19 percent from last year. That compares to 29 percent for the candy-bar style, and 2 percent for the slide-cover design.
>>Handset features used most frequently are: Speakerphone (51 percent); camera (35 percent); services to send/receive short messages (22 percent); and gaming (16 percent).
>>More than one-half of all current wireless users compared other handset brands before selecting their current wireless phone. Those customers who compare phones during the selection process are more likely to be satisfied overall with their current handset than those who do not.
Idea weds Spice - How ? Remains to be answered
Idea Cellular and Spice Telecom along with Telekom Malaysia (TM) that holds 49% stake in Spice, are yet to work out an amicable arrangement between the deal between the two - Merger or acquisition. While Idea, in which the Birlas own 57% stake, wants to fully acquire Spice, the Modis-promoted company is keen for a merger.
Spice has 2.8 million subscribers, largely high-end, in Punjab and Karnataka circles where Idea is not yet present. Idea, which listed on the bourses in March this year, has grown through the organic as well as the inorganic route in the past. While an acquisition of Spice will give Idea a ready entry into two new circles and a good user base, the Birlas are not willing to pay over the top. Spice is said to be quoting a price of more than a billion dollars for the two-circle operation, to which the Birlas are not agreeing. “We are a fast-growing company and our valuation is definitely higher than a billion dollar,” a Spice executive said. However, going by the fact that promoters of Spice will offload 20% stake in the forthcoming IPO for $150 million, the company’s valuation is $750 million. This remains a bone of contention between the two sides. Idea will continue to be an AV Birla group company going forward and there was no question of the company diluting its identity in a merger. Also, a buy-out of Idea by Spice seems unlikely because Idea is seven times bigger than Spice. AV Birla group officials have earlier said the group will not dilute its stake in Idea below 51%.
Meanwhile, TM has clearly said that it will not exit the Indian market, TM bought 49% stake in Spice in March last year for $179 million. Spice applied for spectrum in 20 circles in September last year. It has already received the DoT nod for NLD and ILD operations. It is too early for the deal to come through as Spice was working on its IPO ahead of any agreement. Sebi has given its approval to the public offering. “We should be opening in the end of June. However, an acquisition after the listing of Spice will become more complicated due to regulatory issues. For the year 2006, Spice recorded revenue of Rs 533.78 crore and EBITDA of Rs 107.86 crore. Its EBITDA margin fell from 23.8% to 20.2% at the end of 2006. The company’s capital expenditure at the end of last year totalled Rs 269 crore.
Spice has 2.8 million subscribers, largely high-end, in Punjab and Karnataka circles where Idea is not yet present. Idea, which listed on the bourses in March this year, has grown through the organic as well as the inorganic route in the past. While an acquisition of Spice will give Idea a ready entry into two new circles and a good user base, the Birlas are not willing to pay over the top. Spice is said to be quoting a price of more than a billion dollars for the two-circle operation, to which the Birlas are not agreeing. “We are a fast-growing company and our valuation is definitely higher than a billion dollar,” a Spice executive said. However, going by the fact that promoters of Spice will offload 20% stake in the forthcoming IPO for $150 million, the company’s valuation is $750 million. This remains a bone of contention between the two sides. Idea will continue to be an AV Birla group company going forward and there was no question of the company diluting its identity in a merger. Also, a buy-out of Idea by Spice seems unlikely because Idea is seven times bigger than Spice. AV Birla group officials have earlier said the group will not dilute its stake in Idea below 51%.
Meanwhile, TM has clearly said that it will not exit the Indian market, TM bought 49% stake in Spice in March last year for $179 million. Spice applied for spectrum in 20 circles in September last year. It has already received the DoT nod for NLD and ILD operations. It is too early for the deal to come through as Spice was working on its IPO ahead of any agreement. Sebi has given its approval to the public offering. “We should be opening in the end of June. However, an acquisition after the listing of Spice will become more complicated due to regulatory issues. For the year 2006, Spice recorded revenue of Rs 533.78 crore and EBITDA of Rs 107.86 crore. Its EBITDA margin fell from 23.8% to 20.2% at the end of 2006. The company’s capital expenditure at the end of last year totalled Rs 269 crore.
VSNL rolls out WiMax services in Bangalore
The Tata-owned Videsh Sanchar Nigam (VSNL) has rolled out WiMax services in India. To begin with, the global communications company will offer the services to enterprise customers in Bangalore. VSNL will extend its WiMax network to about 120 cities across India for enterprise customers and in five cities for retail customers by the end of this financial year. A number of companies from sectors like retail, financial services and automobiles are using VSNL’s Wimax services. VSNL has launched WiMax after conducting pilots in Bangalore and other locations VSNL is also the leader in the Wi-Fi space, with nearly 300 public hotspots in India. Among operators, Bharat Sanchar Nigam (BSNL) is also planning to launch WiMax services very soon, having undertaken pilots at 14 locations. While Motorola as well as Nortel are offering equipment for WiMax, Alcatel-Lucent has completed the country’s first live WiMax field trial using Aircel’s licensed spectrum. WiMax also allows applications in moving conditions such as video streaming, high-speed file downloads, voice over IP and web browsing.
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