Mobile VAS revenues in India to touch Rs 8200 Cr by next fiscal !!!

According to an estimate by industry body Assocham, the mobile value added services are poised to grow by over 65 per cent to touch Rs 8,200 crore by the end of this fiscal from Rs 4,950 crore in the last fiscal . The high growth is attributed to a rapidly increasing large subscriber base and easy accessibility to the end-users. Various downloads such as ringtones, bill-related information, contest, exam results and messages received from public services such as banks, railways and airlines earn revenues for the industry. Such revenues will grow and multiply to add volumes to mobile value added services (VAS).

Indian music industry earned more than 35 million dollar from such services which is equivalent to 20 per cent of its total revenue. The total mobile music downloads in Indian markets are valued at 75 million dollars and is expected to grow by 25 per cent in the next year. SMS interactivity, which has become an integral part of most of TV shows, would become a major source of revenue for the channels. TV show Indian Idol on Sony got more than 55 million votes via SMS -- at a rate of Rs 3 per SMS, that is Rs 16.5 crore. The telecom companies earned Rs 11.5 crore and Sony made Rs 5 crore.

What should be the limit on market share after M & A in Telecom space ?

TRAI's consultation paper on licensing norms review has attracted following views from major Indian Telcos :

State-owned BSNL has suggested lowering of the market share limit to 40 per cent from the current 67 per cent following the merger and acquisitions of two entities in the telecom sector to avoid monopolistic situation. "It is felt that the existing provision of 67 per cent market share will create non-competitive or monopolistic situation. It is, therefore, suggested that this limit should be brought down to about 40 per cent"

Vodafone Essar, which has recently acquired number two slot in terms of subscriber base, said "We are of the opinion that the 67 per cent limit is appropriate when applied to a narrow mobile market definition. "But regime of the current M&A Guidelines, not a single intra-circle merger between licensees has taken place to date and it cannot be said that the current guidelines have produced an environment of undue consolidation. The guidelines, therefore, remain appropriate."

CDMA player Tata Teleservices wants this cap to be at 45 per cent. "We recommend a maximum market share of 45 per cent for the merged entity," the company said. The PSU also wants fixing a maximum spectrum limit that would be held by a merged entity be. It also does not want any merger to be allowed between a CDMA and a GSM company. Vodafone Essar said the merged entity should have a spectrum limit.

GSM players in India add 5.4 m subscribers in June 07

GSM players in India added 5.4 million new subscribers in June. the public sector BSNL has registered negative growth in five of the 21 telecom circles where it offers services. Overall, the PSU has added just 4.3 lakh new subscribers in June compared to 1.96 million by Bharti Airtel and 1.54 million by Vodafone-Essar. This also implies that the PSU, which had lost its position as the second largest GSM player in the country to Vodafone Essar in May 2007, has slipped further down. Vodafone Essar now has a total of over 30.75 million subscribers and a market share of 22.61% when compared to 28.42 million and 20.90% for the PSU.

As per the latest data compiled by the Cellular Operators Association of India (COAI), the industry association representing all GSM operators, the GSM subscriber base has touched 136 million as of June end, 2007, up 4.12% when compared to 130.1 million in May 2007. The growth witnessed in June was lead by Bharti Airtel, which added just under two million new users taking its subscriber base to 42.7 million. Bharti now commands a market share of 31.40% in the GSM space. Reliance Telecom, the GSM arm of Reliance Communications has also performed poorly — the company, which has 4.34 million subscribers, has failed to show even a single new addition in all the eight circles it operates. BSNL’s subscriber additions over the last couple of months have been thrown off target as the company has exhausted its capacity in most key circles. The PSU has not undertaken any major expansion contract since October 2005.

This has witnessed even regional players like Idea Cellular which has operations in just 11 circles and Aircel Cellular which has operations in 9 circles overtaking the PSU in terms of subscriber addition over the last couple of months. While BSNL has issued tenders for the supply of over 45 million lines in March 2006, it was so far been unable to place orders for the network equipment. In fact, Idea has added about 0.9 million subscribers last month, which is twice that of BSNL. Last month, among all circles, Category B circles witnessed the highest rate of growth at nearly 5.0%. Within the Category B circles, the highest growth was recorded by the UP (West) Circle at (6.5%) closely followed by West Bengal and Andaman & Nicobar Circle at (6.1%).

Reliance awards US $ 200 m contract to Huawei

India's Reliance Communications has announced the award of a network expansion contract, worth over US$200 million, to Huawei Technologies. Under the agreement, Huawei will supply and provide services for CDMA & GSM base stations, including BSC (Base Station Controller) and switches, and help to create first class all-IP Next Generation Network infrastructure.

Earlier in first week of July , Reliance awarded a similar contract worth US$400 million to Alcatel-Lucent

WCDMA HSPA connections to reach 40m by 2008 !

As per Wireless Intelligence, WCDMA HSPA cellular connections are expected to reach 40 million worldwide by end of 2008. By 2010, WCDMA HSPA is expected to represent around 45% of total WCDMA cellular connections, which are also on track to exceed GSM connections by 2010 in those countries where the network has been launched.
Asia-Pacific is driving growth during the initial phase of adoption, while European operators will boost total WCDMA HSPA cellular connections from the end of 2008. WCDMA HSPA is expected to increase data traffic and non-voice revenues.

WCDMA HSPA will be commercially present in more than 60 countries by the end of next year, based on announced plans. With the aim of bringing broadband speeds to mobile networks, WCDMA HSPA is a software upgrade to existing WCDMA networks typically launched from 2003. WCDMA HSPA will go through a slow adoption phase until the end of 2008. WCDMA HSPA is expected to represent around 6% of total WCDMA connections by the end of 2007 (11 million connections).
"The fastest early growth is coming from Asia-Pacific, with operators such as KTF, Telstra and NTT DoCoMo already very aggressive in migrating their installed base to the new technology," says Gillet. At an operator group level, Vodafone Group could reach 4.5 million WCDMA HSPA cellular connections by the end of next year. T-Mobile has been focusing more on its EDGE network and is expected to be more aggressive in launching WCDMA HSPA, especially in Germany, its home market. Orange and Telefonica O2 are following the same pattern as they expand coverage in their key markets, including Eastern European countries such as Poland and Czech Republic. Finally, from 2009, WCDMA HSPA uptake in Western and Eastern European countries will trigger a fast adoption of the technology worldwide. "In 2010, worldwide WCDMA HSPA cellular connections are expected to represent around 45% of total WCDMA connections, numbering around 278 million cellular connections.

Handset launches - In 2006, operators were offering high-speed services mainly through HSDPA datacards. HSUPA datacards are expected to be introduced in the second half of 2007. HSDPA handsets will be more affordable from 2008, driving volume.
Handset pricing - As WCDMA moves towards the sub-€100 ASP segment, HSDPA benefits from time and volume advantages and is expected to hit the mid tier by the end of 2008. WCDMA HSPA handsets will hit the mass market faster than the existing WCDMA handsets.
Tariffs - Operators will differentiate by offering new services based on flat-rate tariff plans withWCDMA HSPA as one of the enablers.
Network cost of development - WCDMA HSPA is a software upgrade to the existing WCDMA network infrastructure and is therefore not particularly costly except for backhaul.
Network coverage - WCDMA HSPA will generally be implemented over the whole WCDMA network of an operator, starting with the most densely populated zones.
Technology migration - We have assumed that WCDMA to WCDMA HSPA migration will follow a similar pattern to migration from CDMA2000 1X to CDMA2000 1XEV-DO.
Exceptions - Networks in China and India have not been included in the WCDMA HSPA forecasts as operators have not yet announced any official deployment. Similarly, Russian WCDMA HSPA connections have not yet been forecasted.

Source -

ZTE overtake LG to become largest CDMA handset supplier to Indian market

China's ZTE is reported to have overtaken Korea's LG Electronics to become the largest supplier of CDMA handsets to the Indian mobile phone market. The handset manufacturer now has a 26% market share according to market sources cited by the DigiTimes news publication.
ZTE originally entered the Indian market through an agreement with Tata Telecom in 2005 and now includes BSNL and the dominant CDMA operator, Reliance Communications as its customers.
ZTE is reported to have shipped some 15 million handsets in 2006, but had already passed that landmark by the beginning of June this year. The company is expected to ship something like 40 million handsets in total this year.

"Fund transfer market using mobile to grow to $8 billion by 2012" - New opportunity for Telcos

According to ABI Research, The market for mobile fund transfers will grow to a revenue opportunity of nearly $8 billion for wireless carriers by 2012, up from some $10 million last year.
By enabling subscribers to send and receive money using their wireless phones, wireless carriers have the opportunity to bring local banking services to millions of people around the world. Such services also could deliver a valuable new revenue stream. Mobile networks offer a number of advantages over existing fund transfer offerings, but most convincing is the high level of adoption and reach of wireless services both geographically and demographically. However, wireless carriers can't do this alone. The need for a banking license to offer such services in most countries means carriers must partner with established banking institutions. Partnerships are encouraged by offering services institutions an effective way to reach new as well as existing customers. ABI Research believes these partnerships, once forged between operators and the financial sector to target mobile fund transfers, also will provide a foundation for a host of additional joint offerings. Meanwhile, startups focused on delivering mobile fund transfers to mobile subscribers also have emerged to drive mobile fund transfer adoption. In one of my earlier postings - "Banks and Telcos - Partnerships of future", I have actually stressed on the same

While enabling national and even localized fund transfers delivers a good business case for operators, ABI says it is in the realm of international payments or remittances that the bulk of the market opportunity lays. Large sums already flow from workers who move overseas but send payments back to family members and friends in their home countries. Targeting these transactions, several wireless carriers and international financial institutions already are offering or developing an international capability for mobile fund transfers.

Another study by Juniper Research predicts that P2P fund transfers and mobile payments in the developing world, together with the commercialization in 2009 of NFC (Near Field Communications) based mPayments will generate transactions worth approximately $22bn and Mobile Payments to be Adopted by 204 Million Mobile Phone Users

"Customers increasingly want telecom services and products to be bundled" - says study on US market

The J.D. Power and Associates 2007 Residential Regional Telephone Customer Satisfaction Study says cable companies, which for the first time lead the customer-satisfaction rankings for telephone service in all six U.S. regions, are proving to be tough competition, mostly due to the rise of triple-play bundles.
The study is based on responses collected in April and May from 11,911 customers nationwide who receive their local and long-distance telephone service from one provider. J.D. Power looked at six factors are examined in determining overall satisfaction: performance and reliability, customer service, billing, image, cost of service, and offerings and promotions.
The study says 86 percent of cable-based voice subscribers also subscribe to data services from the same provider--up from 71 percent in 2006. Conversely, 36 percent of telecom-based voice subscribers also use their providers to fulfill their data needs, an increase of 7 percentage points year over year. The impact of bundling is further evidenced by the boost in importance weight of the offerings and promotions factor, which has increased by 3 percent since the 2006 study.

Customers increasingly want multiple services and products bundled into one convenient package under a single provider, and cable companies are doing a great job of achieving this with their voice, data and video packages. Even still, local and long-distance phone services remain the most widely accepted services to bundle, with data and video steadily closing the gap over the past three years. While rolling out their video-service offerings, telephone companies can improve their near-term competitiveness by either lowering prices on their core products or perhaps even adding wireless service to their bundle options, as some have already done.
The study also finds that 43 percent of customers are loyal to their voice provider, an increase from 41 percent in 2006. However, among the 12 percent of subscribers who "definitely" or "probably" intend to switch providers, the most frequently cited reasons for doing so include competitive/discounted pricing, convenience and receiving a single bill.

It seems as though most subscribers are becoming more loyal, with 36 percent of those who currently bundle reporting they would add even more products or services from their current provider, making the next several years crucial for both telephone and cable companies. Kirkeby continues.

U.K.'s DTH satellite-TV giant BSkyB has become Britain's fastest-growing broadband provider

U.K. direct-to-home (DTH) satellite-TV giant British Sky Broadcasting (BSkyB) has become Britain's fastest-growing broadband provider in less than a year, with broadband now driving overall growth of the company. In the three months ended June 30 (BkyB's fourth fiscal quarter), it had added a net of 259,000 new broadband subscribers, bringing its total broadband subscriber base to 716,000. It also added 171,000 telephony customers, bringing that total subscriber base to 526,000. In contrast, on the television side of the house, it reported a far lower growth rate and netted only 90,000 new subscribers (after taking into account a hefty churn rate of 12.1 percent, which at least was down a bit from 13.7 percent in the first three months). It now has some 8.6 million subscribers to its core DTH service.
BSkyB is adding more broadband customers than any other provider. The company, which jumped into telephony and broadband last year in order to have a triple-play bundle to fend off such competitors as BT and U.K. cable giant Virgin Media, is on track to reach it target of 3 million broadband subscribers and 10 million TV subscribers by 2010.

BSkyB now is delivering service from 1,150 BT exchanges where it has unbundled local loops, representing 70 percent coverage of U.K. households. The unbundling efforts are six months ahead of plan, the company touts.

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