Spectrum Status by Circles & Operators
Beyond MTN & Zain - Bharti, BSNL & MTNL have opportunity in Egypt
Egypt will offer two licenses to provide telecommunications services for upscale suburbs outside the capital, including fixed lines. The is move expected to bring in $1 billion worth of investments over the next five years. The licenses will be granted to a pair of consortia to operate so-called "triple-play" services that group internet, cable TV and phone services within such communities springing up around Cairo and elsewhere in the country.
The move marks the first potential crack in the state-owned Telecom Egypt's total monopoly over fixed line communications, though for now the services are only for within these communities.
The companies will not be required to submit an upfront payment, but the licenses would be based on a revenue sharing program in which the government would get 8 percent of the proceeds of operations within these compounds. Telecom Egypt would still operate in these communities, including fixed line services.
It is said that the bids are due on Jan. 12 and the decisions would be made in the second half of 2010. The communities affected are those which house between 50 to 5,000 units, while larger communities would be served by Telecom Egypt.
The move by the government comes as the country has been grappling with the fallout from the economic meltdown. While Egypt has fared better than many other nations, with officials projecting economic growth of over 5 percent for the fiscal year ending next June, it has still struggled with slumping foreign investment as the world's worst economic recession in decades has prompted investors to tighten their purse strings.
Over the last few years, Cairo has been expanding and its developers have invested billions of dollars in new housing communities in the desert catering to upper- and middle-income Egyptians.
The government's move also indicates a shift in the responsibility for providing infrastructure from the state to private developers.
Opportunity bells are ringing for Indian Telcos like Bharti, BSNL & MTNL who are desperate to invest abroad.
The move marks the first potential crack in the state-owned Telecom Egypt's total monopoly over fixed line communications, though for now the services are only for within these communities.
The companies will not be required to submit an upfront payment, but the licenses would be based on a revenue sharing program in which the government would get 8 percent of the proceeds of operations within these compounds. Telecom Egypt would still operate in these communities, including fixed line services.
It is said that the bids are due on Jan. 12 and the decisions would be made in the second half of 2010. The communities affected are those which house between 50 to 5,000 units, while larger communities would be served by Telecom Egypt.
The move by the government comes as the country has been grappling with the fallout from the economic meltdown. While Egypt has fared better than many other nations, with officials projecting economic growth of over 5 percent for the fiscal year ending next June, it has still struggled with slumping foreign investment as the world's worst economic recession in decades has prompted investors to tighten their purse strings.
Over the last few years, Cairo has been expanding and its developers have invested billions of dollars in new housing communities in the desert catering to upper- and middle-income Egyptians.
The government's move also indicates a shift in the responsibility for providing infrastructure from the state to private developers.
Opportunity bells are ringing for Indian Telcos like Bharti, BSNL & MTNL who are desperate to invest abroad.
Download speed of 28 Mbps offered by Singapore's Mobileone - Wired-line broadband's fag end begins?
Singapore's MobileOne (M1) has announced a further upgrade of its HSPA+ network to support mobile broadband download speed of up to 28 Mbps in selected areas. The increased speed has been achieved with the installation of MIMO (Multiple-input-multiple-output), making M1 HSPA+ network the first in the Asia Pacific to adopt this technology. MIMO is expected to be rolled out to the entire network progressively. Huawei has provided the upgrade.
Meanwhile, M1 will be offering mobile broadband service with download speed of up to 21Mbps island-wide from this Saturday. The M1 HSPA+ network has been capable of delivering download speed of 21 Mbps since July this year, although the company says it held back its commercial launch pending the arrival of customer terminals.
In a year or so the same can be expected in other major telecom markets of world - India & China. Does that indicate that the fag end of wired-line broadband has just begun.
Meanwhile, M1 will be offering mobile broadband service with download speed of up to 21Mbps island-wide from this Saturday. The M1 HSPA+ network has been capable of delivering download speed of 21 Mbps since July this year, although the company says it held back its commercial launch pending the arrival of customer terminals.
In a year or so the same can be expected in other major telecom markets of world - India & China. Does that indicate that the fag end of wired-line broadband has just begun.
Justifying tele-density in India ? Are the numbers reported by Indian Telcos inflated?
In some of my older posts, I have shown my concern on the numbers reported for users of mobile service in India. For example with entry of DoCoMo on Indian scene, the numbers Tata reported to have added last month was more than 3 million. Bharti & Vodafone continue to claim the same number of addition that they were claiming in new month. Strangely it means that with entry of new operators the existing will not loose market share. Somewhere fundamentals of economics have been defied. In other words the teledensity in India can reach 100% in ayear or so, if 10 more new operators join, as they will each add 2 to 3 million connection without decrease in the number of additions by existing operators. WoW! It seems the tele density figures in India need to be justified some how.
Recently in one of the articles published in ET,findings of a survey by online market research company JuxtConsult were reported. It says - One out of every three (57 million) urban mobile users in India now own two or more mobile connections. Believe it or not. After all this is a survey. JustConsult claims that it's the first time an estimation on the size of this segment has been attempted, as none of the industry associations––Cellular Operators Association of India (COAI) and Association of Unified Service Providers of India (AUSPI)––or sector regulator Telcom Regulatory Authority of India (Trai) have any estimation of the number of multiple connections per user.
Understanding the size, composition and motivations of this huge segment of mobile users is critical. It is needed by mobile operators in designing their marketing plans. It is also needed by handset makers and department of telecom (DoT), which is in a fix as to estimating the true teledensity of India. JuxtConsult's estimation of mobile connections in the country (till July) at 343-million is lower than TRAI's estimates of 441.6-million (August). JuxtConsult attributes the difference between its estimate and TRAI numbers to many inactive connections. Says Sanjay Tiwari of JuxtConsult: "The discrepancy is also because about 15% of reported additions by mobile operators and their associations are inflated." There are credible reasons behind operators inflating subscriber numbers. Market cap, valuation and spectrum allocation based on number of subscribers are key reasons along with the pressure to cut tariffs. It also helps attract subscribers to one's own network. A new user is likely to join a large operator as network calls come cheap.
ET also reported that the government suspected that all operators were inflating their customer figures by about 15-20% and that the DoT is planning to monitor the user base of all telecom operators to ensure that operators do not inflate subscriber numbers to grab additional spectrum. Well all this will be sorted out shortly - I hope! For the time being Justconsult deserves appreciation for trying to help in profiling the multiple user customer, whose average age largely falls between 25-35 years. According to the survey, Delhi and the national capital region account for over one in ten of all 57-million MCMU’s at 12% of the total base followed by Mumbai (8%), Bangalore (7%) and Chennai (6%). Most are actual genuine connections.
The survey, also for the first time, makes a distinction between a user and a connection, hitherto taken as one in reporting India’s teledensity and average revenue per user. As reported by ET - According to Rajat Mukherjee, chief corporate affair officer at Idea Cellular, about 20% of all telcos’ customers carry more than one SIM. The carried / thrown in dustbin SIMs remains to be distinguished
JuxtConsult’s India Mobile 2009 estimates are based on a very large sample data of around 285,000 urban and rural Indians, covering all states and union territories––574 districts, 3,175 towns and over 2,800 villages. With at least 30 plus sample each from 323 districts and 419 towns, and 100 plus sample each from 184 districts and 155 towns, the study is one of the most representative, independent enumeration of mobile phone usage in India.
With over two mobile connections per user (2.4) amongst multiple connection mobile users (MCMU), this segment account for a majority (59%) of all 235-million odd urban mobile connections. JuxtConsult’s survey did not estimate MCMU numbers for rural India. TOO MUCH TOO SOON !!
With increased urbanisation and migration from distant parts of the country to the cities, long distance calling has been on the rise across the country. ET reports that Airtel will also soon be launching a family plan where in three members of a family can buy Airtel postpaid connection but pay rental for only one. This plan is justified by the survey which shows that joint families have the highest ownership of mobile phones, with about 65% of their members owning more than one connection.
The socio economic class (SEC) A & C mobile users show higher tendency to have multiple connections, says the survey. Migrant workers and youth form a large part of the target audience. This push is also having an impact on more Mobile phone sales and launch of newer models. Sunil Dutt, country head, Samsung Mobile says he is seeing a rise in sales of Samsung’s dual mode GSM/GSM and GSM/CDMA handsets. While Nokia and Sony Ericsson don’t have such phones in the market, Spice Mobiles, has 50% of its portfolio as dual SIM phones. Such phones contribute a good 80% of the company’s revenues, says Kunal Ahooja, CEO, Spice Mobiles. The survey says that about 41% MCMUs need another spare handset for ease of use. But switching between GSM and CDMA handsets is cited as a reason by 30% buyers.
Recently in one of the articles published in ET,findings of a survey by online market research company JuxtConsult were reported. It says - One out of every three (57 million) urban mobile users in India now own two or more mobile connections. Believe it or not. After all this is a survey. JustConsult claims that it's the first time an estimation on the size of this segment has been attempted, as none of the industry associations––Cellular Operators Association of India (COAI) and Association of Unified Service Providers of India (AUSPI)––or sector regulator Telcom Regulatory Authority of India (Trai) have any estimation of the number of multiple connections per user.
Understanding the size, composition and motivations of this huge segment of mobile users is critical. It is needed by mobile operators in designing their marketing plans. It is also needed by handset makers and department of telecom (DoT), which is in a fix as to estimating the true teledensity of India. JuxtConsult's estimation of mobile connections in the country (till July) at 343-million is lower than TRAI's estimates of 441.6-million (August). JuxtConsult attributes the difference between its estimate and TRAI numbers to many inactive connections. Says Sanjay Tiwari of JuxtConsult: "The discrepancy is also because about 15% of reported additions by mobile operators and their associations are inflated." There are credible reasons behind operators inflating subscriber numbers. Market cap, valuation and spectrum allocation based on number of subscribers are key reasons along with the pressure to cut tariffs. It also helps attract subscribers to one's own network. A new user is likely to join a large operator as network calls come cheap.
ET also reported that the government suspected that all operators were inflating their customer figures by about 15-20% and that the DoT is planning to monitor the user base of all telecom operators to ensure that operators do not inflate subscriber numbers to grab additional spectrum. Well all this will be sorted out shortly - I hope! For the time being Justconsult deserves appreciation for trying to help in profiling the multiple user customer, whose average age largely falls between 25-35 years. According to the survey, Delhi and the national capital region account for over one in ten of all 57-million MCMU’s at 12% of the total base followed by Mumbai (8%), Bangalore (7%) and Chennai (6%). Most are actual genuine connections.
The survey, also for the first time, makes a distinction between a user and a connection, hitherto taken as one in reporting India’s teledensity and average revenue per user. As reported by ET - According to Rajat Mukherjee, chief corporate affair officer at Idea Cellular, about 20% of all telcos’ customers carry more than one SIM. The carried / thrown in dustbin SIMs remains to be distinguished
JuxtConsult’s India Mobile 2009 estimates are based on a very large sample data of around 285,000 urban and rural Indians, covering all states and union territories––574 districts, 3,175 towns and over 2,800 villages. With at least 30 plus sample each from 323 districts and 419 towns, and 100 plus sample each from 184 districts and 155 towns, the study is one of the most representative, independent enumeration of mobile phone usage in India.
With over two mobile connections per user (2.4) amongst multiple connection mobile users (MCMU), this segment account for a majority (59%) of all 235-million odd urban mobile connections. JuxtConsult’s survey did not estimate MCMU numbers for rural India. TOO MUCH TOO SOON !!
With increased urbanisation and migration from distant parts of the country to the cities, long distance calling has been on the rise across the country. ET reports that Airtel will also soon be launching a family plan where in three members of a family can buy Airtel postpaid connection but pay rental for only one. This plan is justified by the survey which shows that joint families have the highest ownership of mobile phones, with about 65% of their members owning more than one connection.
The socio economic class (SEC) A & C mobile users show higher tendency to have multiple connections, says the survey. Migrant workers and youth form a large part of the target audience. This push is also having an impact on more Mobile phone sales and launch of newer models. Sunil Dutt, country head, Samsung Mobile says he is seeing a rise in sales of Samsung’s dual mode GSM/GSM and GSM/CDMA handsets. While Nokia and Sony Ericsson don’t have such phones in the market, Spice Mobiles, has 50% of its portfolio as dual SIM phones. Such phones contribute a good 80% of the company’s revenues, says Kunal Ahooja, CEO, Spice Mobiles. The survey says that about 41% MCMUs need another spare handset for ease of use. But switching between GSM and CDMA handsets is cited as a reason by 30% buyers.
3G bidding - Is this the third & Last round of telco competition in India?
The DoT (Department of Telecom) will release a detailed information memorandum (IM) this week on the upcoming 3G auctions. As reported by economic times, the IM (information memorandum) to be released is likely to contains details regarding the billing schedule, qualifications of bidders, terms and conditions, payment schedules and other technical and commercial specifications that are critical to enable bidders to plan their auction strategy.
The DoT clarified that global telecom operators who do not operate in India are welcome to participate, though they will have to acquire a Unified Access Service Licence (UASL) to be eligible to bid. This implies some uncertainty for potential foreign bidders. At present, a pan-India UASL costs Rs 1,658 crore and comes bundled with 4.4 MHz of 2G spectrum. However, recent proposals to unbundle the licence from spectrum and to change its cost are still pending and could remain unresolved at the time India conducts its 3G auctions. This change is owing to a severe 2G spectrum crunch being faced in India with over 300 applicants waiting in queue for 24 months or more to get new spectrum/licences. DoT officials believe that global operators will be willing to join this queue, but given the fact that there is a shortage, the uncertainties relating to the cost and 2G spectrum availability may prove to be a deterrent. Any proposal to change the terms and conditions of licence has to be referred to the Trai and this usually involves a detailed process, including several consultations and Open House sessions with all stakeholders.
Domestic operators Bharti, Vodafone, Reliance, Tatas and Idea are expected to be the main players in the 3G auction ring. Nordic telecom giant Telenor, which recently secured 67% equity in Unitech Wireless is reported not to opt for a pan-India 3G licence but bid for a select few 3G circles. Aircel, Loop, Swan and Datacom may also place bids in some strategic circles.
The reserve price for pan-India 3G spectrum is pegged at Rs 3,500 crore. It is believed that given the limited number of slots, the government may be able to receive a price in the range of Rs 6,000 crore plus for each of the slots giving an additional revenue of Rs 25,000 crore to the exchequer for the current fiscal. The auction of third generation spectrum or airwaves, is likely to start this November. The EGoM has recently approved placing four slots of 5 MHz each in the 2.1 GHz band for auctions in 3G. If the auction is held in December as scheduled, it is highly likely that India will see four new 3G operators before the end of 2010.
To me this seems to be last round of competition between telcos in India. What I foresee is that after aggressive bidding for 3G licences, some of the operators will make huge losses. Then the consolidation phase will follow. By 2012 some of the players will start handling the batten - not to new players but to the one running in adjacent lanes.
The DoT clarified that global telecom operators who do not operate in India are welcome to participate, though they will have to acquire a Unified Access Service Licence (UASL) to be eligible to bid. This implies some uncertainty for potential foreign bidders. At present, a pan-India UASL costs Rs 1,658 crore and comes bundled with 4.4 MHz of 2G spectrum. However, recent proposals to unbundle the licence from spectrum and to change its cost are still pending and could remain unresolved at the time India conducts its 3G auctions. This change is owing to a severe 2G spectrum crunch being faced in India with over 300 applicants waiting in queue for 24 months or more to get new spectrum/licences. DoT officials believe that global operators will be willing to join this queue, but given the fact that there is a shortage, the uncertainties relating to the cost and 2G spectrum availability may prove to be a deterrent. Any proposal to change the terms and conditions of licence has to be referred to the Trai and this usually involves a detailed process, including several consultations and Open House sessions with all stakeholders.
Domestic operators Bharti, Vodafone, Reliance, Tatas and Idea are expected to be the main players in the 3G auction ring. Nordic telecom giant Telenor, which recently secured 67% equity in Unitech Wireless is reported not to opt for a pan-India 3G licence but bid for a select few 3G circles. Aircel, Loop, Swan and Datacom may also place bids in some strategic circles.
The reserve price for pan-India 3G spectrum is pegged at Rs 3,500 crore. It is believed that given the limited number of slots, the government may be able to receive a price in the range of Rs 6,000 crore plus for each of the slots giving an additional revenue of Rs 25,000 crore to the exchequer for the current fiscal. The auction of third generation spectrum or airwaves, is likely to start this November. The EGoM has recently approved placing four slots of 5 MHz each in the 2.1 GHz band for auctions in 3G. If the auction is held in December as scheduled, it is highly likely that India will see four new 3G operators before the end of 2010.
To me this seems to be last round of competition between telcos in India. What I foresee is that after aggressive bidding for 3G licences, some of the operators will make huge losses. Then the consolidation phase will follow. By 2012 some of the players will start handling the batten - not to new players but to the one running in adjacent lanes.
Mobile Number Portability (MNP) to kick in from 31st Dec in India
Mobile number portability (MNP) — a facility that allows customers to switch operators but retain their numbers — will kick in from December 31 across the metros and category A circles, such as Tamil Nadu and Karnataka, while the rest of the country will have access to the facility from March 31, 2010.
TRAI, the telecom regulator in India, also issued a slew of guidelines for MNP implementation. - As per the norms, once a user switches operator, he must stay for at least three months (90 days) with the new service provider before moving to another operator.
- Besides, a user holding a mobile connection is eligible to make a porting request only after three months of the date of activation of his number.
- The subscribers, who wish to port their numbers must submit their requests in writing to their service providers. The new operator must mandatorily carry out all checks, including identity verification, before completing the process, the regulator said, adding that the entire process must be completed within four days.
- Pre-paid users must give an undertaking of being aware that balances on both talktime and minutes will not be carried over to the new operator they are switching to. Post-paid customers must furnish proof that all outstanding dues to their current operator have been cleared, TRAI added.
- The operators must inform the customer about the exact date and time for the process. The regulator has also made it clear that while the operator is porting the number, the customer may have to face a ‘no service period’ that can be extended for up to a few hours during which they will not be able to receive and make calls. But in a bid to address these concerns, TRAI has said the new operator must provide the customer with a list of missed calls and messages sent during the ‘no service period’.
Syniverse Technologies and MNP Interconnection Teleco Solutions, the two companies chosen to implement it in India, had projected to regulator that less than 3% of the country’s expected 550 million-plus mobile users will go in for MNP by 2010. The regulator, when issuing MNP norms, however, did not specify the charges that customers will have to pay for switching their operator. Syniverse and MNP Interconnection had proposed to charge customers between Rs 75 and Rs 200 for porting an operator, but the regulator is yet to take a final call on the pricing issue.
TRAI, the telecom regulator in India, also issued a slew of guidelines for MNP implementation. - As per the norms, once a user switches operator, he must stay for at least three months (90 days) with the new service provider before moving to another operator.
- Besides, a user holding a mobile connection is eligible to make a porting request only after three months of the date of activation of his number.
- The subscribers, who wish to port their numbers must submit their requests in writing to their service providers. The new operator must mandatorily carry out all checks, including identity verification, before completing the process, the regulator said, adding that the entire process must be completed within four days.
- Pre-paid users must give an undertaking of being aware that balances on both talktime and minutes will not be carried over to the new operator they are switching to. Post-paid customers must furnish proof that all outstanding dues to their current operator have been cleared, TRAI added.
- The operators must inform the customer about the exact date and time for the process. The regulator has also made it clear that while the operator is porting the number, the customer may have to face a ‘no service period’ that can be extended for up to a few hours during which they will not be able to receive and make calls. But in a bid to address these concerns, TRAI has said the new operator must provide the customer with a list of missed calls and messages sent during the ‘no service period’.
Syniverse Technologies and MNP Interconnection Teleco Solutions, the two companies chosen to implement it in India, had projected to regulator that less than 3% of the country’s expected 550 million-plus mobile users will go in for MNP by 2010. The regulator, when issuing MNP norms, however, did not specify the charges that customers will have to pay for switching their operator. Syniverse and MNP Interconnection had proposed to charge customers between Rs 75 and Rs 200 for porting an operator, but the regulator is yet to take a final call on the pricing issue.
Unique Identification Number (UID) - Does the idea of roping in Telecom service provider has merit?
The Unique Identification Authority of India (UIDAI)has been established to provide a unique number to every resident in the country to target social security services as well as to assure the internal security. Authenticating 1.16 billion people is not an easy task. At this scale, it's going to be a one of its kind project and given the "as is" stage in which India is currently in, Mr. Nilekani needs to do lot of head scratching.
Nilekani, has already said that UIDAI would be looking for the databases of PAN card, passport, driving license, ration card, voter I-card and so on. But the first three cover only a small part of the population and the ration card data is subsumed in voter card data. The telecom user database of 500 million users is an obvious source which can be digged to help the UIDAI to have some part of the personal information checked.
Hence, The Indian government’s ambitious and high-tech unique identity or UID project is all set to ride on India’s 500 million strong telecom network as one of the largest available databases of subscribers anywhere in the world. So as a logical conclusion, DoT, along with the various telecom service providers, can be major stakeholder in this process. There are 480 million telephone subscribers in the country at the moment. Taking margin of error into account, the telecom database is an authenticated database of people in terms of identity and address is concerned.
To discuss how the database of nearly 500 million telephone subscribers can be used for issuing the unique identification number, the enrollment process of UID and how the telecom companies could help in the task of "Standardisation of Know Your Resident' norms which is a major goal of the all-India project for issuing the unique ID, UID Authority of India chaiperson and former Infosys cochairman Nandan Nilekani met telecom operators and DoT officials on 24th Sept seeking their cooperation.
While media reports indicate that Nilekani have sought similar cooperation from banks, post offices, and energy and fertilizer sectors, none of these offer the kind of large subscriber numbers and ready-to-use verification details as the telecom sector. This means that the country’s telecom subscribers could be among the first to be enlisted into UID scheme.
It is learnt that the project is expected to take 12 to 18 months to issue its first UID card and will then accelerate to clock half a billion citizens by the end of 2012. The telecom subscriber base works out perfectly since estimates place mobile users at well past 700 million by this timeframe. So essentially, if the UIDAI could convert every known mobile subscriber into a unique identity, it would have achieved a feat unmatched globally.
A major hurdle in implementing the project arises from the daunting task of developing appropriate software to support such a large database. The UID solution will have to have a quick query response system so that one can search by biometrics, particularly to track criminals. Further, the task of physically collecting one billion biometrics, photographs and other details in a short period of time is a logistics nightmare. Outlets will have to be nominated where people can go to have their data uploaded on to the database. Here again, the 10 million-strong mobile sales and distribution machinery may hold the key. This is because India has 97% mobile subscribers in pre-paid category who return month-after-month to renew the charge on their SIM cards.
As reported in press, Mr. Nilekani has said that the project will provide a unique identification (UID) number not a card. And hence the authentication can be made by using mobile phones. Once the UID is issued, one can go for online authentication.
Now all these seems to be just initial thoughts, getting the loose ends tied up will take its own time. In my opinion, the operators themselves rely on address proof and photo id proof which are unreliable for as far as linking to unique ID is concern. Further many forms (CAF) are missing and operators are being penalized for this. In my opinion, given the fact that many people carry more than two mobiles and also that many of reported numbers may not be operative, it will difficult to get meaningful information from mobile customer data beyond 100 million customer. To take the idea far, Mr. Nilekani's team will require to do some out of box thinking.
Nilekani, has already said that UIDAI would be looking for the databases of PAN card, passport, driving license, ration card, voter I-card and so on. But the first three cover only a small part of the population and the ration card data is subsumed in voter card data. The telecom user database of 500 million users is an obvious source which can be digged to help the UIDAI to have some part of the personal information checked.
Hence, The Indian government’s ambitious and high-tech unique identity or UID project is all set to ride on India’s 500 million strong telecom network as one of the largest available databases of subscribers anywhere in the world. So as a logical conclusion, DoT, along with the various telecom service providers, can be major stakeholder in this process. There are 480 million telephone subscribers in the country at the moment. Taking margin of error into account, the telecom database is an authenticated database of people in terms of identity and address is concerned.
To discuss how the database of nearly 500 million telephone subscribers can be used for issuing the unique identification number, the enrollment process of UID and how the telecom companies could help in the task of "Standardisation of Know Your Resident' norms which is a major goal of the all-India project for issuing the unique ID, UID Authority of India chaiperson and former Infosys cochairman Nandan Nilekani met telecom operators and DoT officials on 24th Sept seeking their cooperation.
While media reports indicate that Nilekani have sought similar cooperation from banks, post offices, and energy and fertilizer sectors, none of these offer the kind of large subscriber numbers and ready-to-use verification details as the telecom sector. This means that the country’s telecom subscribers could be among the first to be enlisted into UID scheme.
It is learnt that the project is expected to take 12 to 18 months to issue its first UID card and will then accelerate to clock half a billion citizens by the end of 2012. The telecom subscriber base works out perfectly since estimates place mobile users at well past 700 million by this timeframe. So essentially, if the UIDAI could convert every known mobile subscriber into a unique identity, it would have achieved a feat unmatched globally.
A major hurdle in implementing the project arises from the daunting task of developing appropriate software to support such a large database. The UID solution will have to have a quick query response system so that one can search by biometrics, particularly to track criminals. Further, the task of physically collecting one billion biometrics, photographs and other details in a short period of time is a logistics nightmare. Outlets will have to be nominated where people can go to have their data uploaded on to the database. Here again, the 10 million-strong mobile sales and distribution machinery may hold the key. This is because India has 97% mobile subscribers in pre-paid category who return month-after-month to renew the charge on their SIM cards.
As reported in press, Mr. Nilekani has said that the project will provide a unique identification (UID) number not a card. And hence the authentication can be made by using mobile phones. Once the UID is issued, one can go for online authentication.
Now all these seems to be just initial thoughts, getting the loose ends tied up will take its own time. In my opinion, the operators themselves rely on address proof and photo id proof which are unreliable for as far as linking to unique ID is concern. Further many forms (CAF) are missing and operators are being penalized for this. In my opinion, given the fact that many people carry more than two mobiles and also that many of reported numbers may not be operative, it will difficult to get meaningful information from mobile customer data beyond 100 million customer. To take the idea far, Mr. Nilekani's team will require to do some out of box thinking.
Its penalty time for Indian Telcos - DoT slaps Rs 32 cr of penalty for failing to adhere to sunscriber verification norms
Government has slapped a penalty of Rs 32 crore on mobile operators for failing to adhere to the subscriber verification norms in 2008-09. The penalty has been on all the mobile operators, including BSNL and MTNL, for failing to meet the subscriber verification condition. With a penalty of Rs 1,000 for each unverified subscriber, the number of such users comes to about 3.2 lakh.
Earlier in April this year, DoT introduced a graded penalty system under which operators pay Rs 50,000 per subscriber if more than 20 per cent of their user base is without valid identity documents. However,the penalty continues to be Rs 1,000 per user if the mobile operator's unverified subscriber base is less than 5 per cent of its user base in each of the circles.
With the customer base swelling at ~ 15 million per month, I bet, if strictly implemented, this can bring in about Rs 2000 to Rs 3000 million of revenues per year.
Earlier in April this year, DoT introduced a graded penalty system under which operators pay Rs 50,000 per subscriber if more than 20 per cent of their user base is without valid identity documents. However,the penalty continues to be Rs 1,000 per user if the mobile operator's unverified subscriber base is less than 5 per cent of its user base in each of the circles.
With the customer base swelling at ~ 15 million per month, I bet, if strictly implemented, this can bring in about Rs 2000 to Rs 3000 million of revenues per year.
In terms of mobile minutes, Bharti Airtel is world's fifth largest operator
Bharti Airtel has latched on to the position of the fifth largest wireless telco globally, ahead of carriers like Sprint Nextel and T-Mobile and Latin American major America Movil. Airtel could trump global operators in providing cheaper calls to its subscribers. The company is way ahead of its global competitors by providing lowest cost per minute of usage.
China Mobile claimed the numero uno position in a recent research report, with 726 billion mobile minutes, followed by Verizon with 226 billion mobile minutes, during the April-June 2009 quarter. AT&T came up third with 166 billion mobile minutes, while Vodafone was in fourth place with 156 billion mobile minutes during the same period. Comparing favourably with global telecom giants, Bharti carried 141 billion mobile minutes on its network, almost twice that of Vodafone Essar, which is not listed in India.
The lowest-cost producer of voice minutes globally ensures a superlative cost structure, which is a key hurdle for challengers and green-field telcos. Bharti Airtel compares favourably with global telecom giants and has carried a total of 140.7 billion voice minutes on its network in 1Q from a single country operation, compared to Vodafone’s total network minutes of 143.6 billion, generated from its operations spanning 30 countries.
China Mobile claimed the numero uno position in a recent research report, with 726 billion mobile minutes, followed by Verizon with 226 billion mobile minutes, during the April-June 2009 quarter. AT&T came up third with 166 billion mobile minutes, while Vodafone was in fourth place with 156 billion mobile minutes during the same period. Comparing favourably with global telecom giants, Bharti carried 141 billion mobile minutes on its network, almost twice that of Vodafone Essar, which is not listed in India.
The lowest-cost producer of voice minutes globally ensures a superlative cost structure, which is a key hurdle for challengers and green-field telcos. Bharti Airtel compares favourably with global telecom giants and has carried a total of 140.7 billion voice minutes on its network in 1Q from a single country operation, compared to Vodafone’s total network minutes of 143.6 billion, generated from its operations spanning 30 countries.
Rollout penalty for Indian Telcos - Delayed but not denied
The government of India has proposed a penalty of Rs 135.60 crore on private telecom operators, including Tatas, Airtel and Reliance Communication, for delays in rolling out networks. Though, the department of telecom (DoT) has lowered the total quantum of penalty from Rs 477 crore decided earlier to Rs 135.60 crore after repeated representations by the operators, giving a major benefit to all big private telecom players. Almost all private players except Vodafone-Essar face penalties.
As reported in Economic times, the penalty comes to over Rs 41 crore on Tatas, Rs 31 crore on Airtel and Rs 19.65 crore on RCOM. Among others, Aircel faces a penalty of Rs 28.85 crore, HFCL has a liquidated damages of Rs 7 crore and the two PSUs — BSNL and MTNL, along with Vodafone-Essar face no penalty.
The cases for imposition of liquidated damages were processed since 2005 and show-cause notices for imposition of liquidated damages (amounting to Rs 477.15 crore) were issued in 96 cases to 10 operators. There were representations from industry pointing out delays in statutory clearances, grant of spectrum for access, among other factors, for delayed rollouts. Thus, it was decided to revisit the subject and DoT has arrived at revised lower penalty for these operators.
As suggested in one of my earlier posts its also time to adopt Swedish model for penalizing operators for not meeting roll out obligations and are in turn hoarding spectrum. (For reading the full post click here)
As reported in Economic times, the penalty comes to over Rs 41 crore on Tatas, Rs 31 crore on Airtel and Rs 19.65 crore on RCOM. Among others, Aircel faces a penalty of Rs 28.85 crore, HFCL has a liquidated damages of Rs 7 crore and the two PSUs — BSNL and MTNL, along with Vodafone-Essar face no penalty.
The cases for imposition of liquidated damages were processed since 2005 and show-cause notices for imposition of liquidated damages (amounting to Rs 477.15 crore) were issued in 96 cases to 10 operators. There were representations from industry pointing out delays in statutory clearances, grant of spectrum for access, among other factors, for delayed rollouts. Thus, it was decided to revisit the subject and DoT has arrived at revised lower penalty for these operators.
As suggested in one of my earlier posts its also time to adopt Swedish model for penalizing operators for not meeting roll out obligations and are in turn hoarding spectrum. (For reading the full post click here)
China has 338 Million internet users !!
The state-run China Internet Network Information Center (CNNIC) said that its Internet statistics show that Internet users in China are up by an estimated 40 million from the end of last year. The internet user base has reached reaching 338 million users by June 2009 and the country has achieved a density of 25.5 percent, which is above the global average of 23.8 percent. By the end of June, there were 3,061 million websites registered in China, 16.25 million domain names and 205 million IP addresses.
In China, internet service providers include companies like Baidu, Alibaba group and Tencent.
Many of these Internet service companies have carved out niches using their market knowledge to satisfy consumer demand for music, news, instant messaging and search functions with the other four popular services being in way of online gaming, videos, email and blogging. As reported in Telecommunications online, Tencent Holdings achieved a total revenue of CNY 5.38 billion (US$787.9 million), an increase of 77.5 percent increase over the same period last year. It had a cash position of CNY 7.7 billion (US$1.1 billion) at the end of first half 2009. Noted for its instant messaging service, it reportedly has 990 million user accounts of which 448 million are active.
Also reporting positive results is China’s leading Internet search provider, Baidu, which attained a turnover of CNY 1.1 billion (US$161 million) for its second quarter in 2009, representing a 36.7 percent increase year-on-year. As for the online auction provider Taobao, the country’s equivalent of eBay, it had a favourable first half year of 2009 recording revenue of CNY 80.9 billion (US$11.8 billion) and it reportedly has set a target of CNY 200 billion (US$29 billion) for the whole year. Taobao is part of the Alibab group which also has interests in online payment and business-to-business platforms in 240 countries.
According to the CNNIC, the number of Chinese shopping online grew in the first six months with 14 million more shoppers to reach a total of 87.8 million. Online shoppers, however, only account for a quarter of Chinese Internet users, compared to two out of three in South Korea, the United States and Europe. Security risks of shopping on the Net may be one withholding factor.
I presume the things will not be much different in India
In China, internet service providers include companies like Baidu, Alibaba group and Tencent.
Many of these Internet service companies have carved out niches using their market knowledge to satisfy consumer demand for music, news, instant messaging and search functions with the other four popular services being in way of online gaming, videos, email and blogging. As reported in Telecommunications online, Tencent Holdings achieved a total revenue of CNY 5.38 billion (US$787.9 million), an increase of 77.5 percent increase over the same period last year. It had a cash position of CNY 7.7 billion (US$1.1 billion) at the end of first half 2009. Noted for its instant messaging service, it reportedly has 990 million user accounts of which 448 million are active.
Also reporting positive results is China’s leading Internet search provider, Baidu, which attained a turnover of CNY 1.1 billion (US$161 million) for its second quarter in 2009, representing a 36.7 percent increase year-on-year. As for the online auction provider Taobao, the country’s equivalent of eBay, it had a favourable first half year of 2009 recording revenue of CNY 80.9 billion (US$11.8 billion) and it reportedly has set a target of CNY 200 billion (US$29 billion) for the whole year. Taobao is part of the Alibab group which also has interests in online payment and business-to-business platforms in 240 countries.
According to the CNNIC, the number of Chinese shopping online grew in the first six months with 14 million more shoppers to reach a total of 87.8 million. Online shoppers, however, only account for a quarter of Chinese Internet users, compared to two out of three in South Korea, the United States and Europe. Security risks of shopping on the Net may be one withholding factor.
I presume the things will not be much different in India
Nokia Siemens makes world's first LTE call on commercial software
Nokia Siemens Networks claims that it recently made the world's first LTE ( Long Term Evolution ) call using commercial base station and fully standard compliant software. The Nokia Siemens Networks' call was made via base stations with fully complaint software to the 3GPP Rel.8 (March 2009 baseline) LTE standard, bringing LTE trials closer to the behavior of future commercial deployments. The LTE data call was conducted in Nokia Siemens Networks' R&D Centre in Ulm, Germany, with its Flexi Multiradio Base Station.
The first deployments for LTE services are foreseen for the end of 2009 with volume rollouts of commercial networks in early 2010. Nokia Siemens Networks has already shipped LTE compatible Flexi Base Station hardware to over 80 operators
The first deployments for LTE services are foreseen for the end of 2009 with volume rollouts of commercial networks in early 2010. Nokia Siemens Networks has already shipped LTE compatible Flexi Base Station hardware to over 80 operators
Nokia's market share continue to slip in Western Europe
According to IDC, The Western European Mobile Phone market recorded another quarter of year-on-year declines in the second quarter of 2009 (2Q09). Handset vendors shipped 42 million units to Western Europe, down 6% from 2Q08.
The switch from traditional mobile phones to converged mobile devices continued to be a major trend in Western Europe. Traditional mobile phones declined 12% during the quarter to 33.2 million units, and converged mobile devices (commonly known as smart phones) experienced a healthy 25% increase during the quarter to 8.8 million units, when compared to the same period last year. For the full year, IDC believes that the Western European market will decline 10%. Demand for converged mobile devices will continue to grow, but will not be strong enough to reverse the overall market decline as they represent only 21% of total shipments. On the other hand, traditional mobile phones will continue to decline, though at a lower rate, as vendors adjust their portfolios, bringing more features to the low-end devices.
But, the fact that caught my attention was that amongst the biggest handset vendors, Korean manufacturers continue to perform better than Scandinavian phone makers. For the first time, Samsung and LG together shipped more devices to Western Europe than Nokia. Nokia continues to be the market leader, with 36.3% market share, but the gap to Samsung, the second biggest vendor with 28.9% market share, continues to diminish. On the other hand, LG continues to challenge Sony Ericsson's market position, and the success of its touch screen handsets allowed LG to get 11.5% market share, the highest ever in Western Europe. The table below gives a better understanding -
Top Western European Mobile Phone Vendors,
Shipments and Market Share, 2Q09 (Units in Millions)
Vendor 2Q09 Unit 2Q09 Market 2Q08 Unit 2Q08Market 2Q09/2Q08
Shipments Share Shipments Share Change
Nokia 15.3 36% 19 43% -19%
Samsung 12.2 29% 10.9 24% 12%
Sony Ericsson 5.1 12% 6.2 14% -18%
LG 4.8 11% 2.8 6% 71%
Apple 1.4 3% 0.2 0% 600%
RIM 1.2 3% 0.8 2% 50%
Others 2 5% 4.7 11% -57%
Total 42 100% 44.6 100% -6%
Source: IDC European Quarterly Mobile Phone Tracker, August 26, 2009
Note: Vendor shipments are branded shipments and exclude OEM sales for all vendors.
Nokia needs to connect differently.
The switch from traditional mobile phones to converged mobile devices continued to be a major trend in Western Europe. Traditional mobile phones declined 12% during the quarter to 33.2 million units, and converged mobile devices (commonly known as smart phones) experienced a healthy 25% increase during the quarter to 8.8 million units, when compared to the same period last year. For the full year, IDC believes that the Western European market will decline 10%. Demand for converged mobile devices will continue to grow, but will not be strong enough to reverse the overall market decline as they represent only 21% of total shipments. On the other hand, traditional mobile phones will continue to decline, though at a lower rate, as vendors adjust their portfolios, bringing more features to the low-end devices.
But, the fact that caught my attention was that amongst the biggest handset vendors, Korean manufacturers continue to perform better than Scandinavian phone makers. For the first time, Samsung and LG together shipped more devices to Western Europe than Nokia. Nokia continues to be the market leader, with 36.3% market share, but the gap to Samsung, the second biggest vendor with 28.9% market share, continues to diminish. On the other hand, LG continues to challenge Sony Ericsson's market position, and the success of its touch screen handsets allowed LG to get 11.5% market share, the highest ever in Western Europe. The table below gives a better understanding -
Top Western European Mobile Phone Vendors,
Shipments and Market Share, 2Q09 (Units in Millions)
Vendor 2Q09 Unit 2Q09 Market 2Q08 Unit 2Q08Market 2Q09/2Q08
Shipments Share Shipments Share Change
Nokia 15.3 36% 19 43% -19%
Samsung 12.2 29% 10.9 24% 12%
Sony Ericsson 5.1 12% 6.2 14% -18%
LG 4.8 11% 2.8 6% 71%
Apple 1.4 3% 0.2 0% 600%
RIM 1.2 3% 0.8 2% 50%
Others 2 5% 4.7 11% -57%
Total 42 100% 44.6 100% -6%
Source: IDC European Quarterly Mobile Phone Tracker, August 26, 2009
Note: Vendor shipments are branded shipments and exclude OEM sales for all vendors.
Nokia needs to connect differently.
Radio Spectrum fee -Lessons from Sweden
The Swedish Post and Telecom Agency (PTS) has announced that it will gradually implement a new model for spectrum charges starting from next year that will penalise license holders who have not maximised the use of their radio spectrum. In general, it could be said that the new model means that licence holders with a large holding of spectrum and with no rollout, or a low degree of rollout, will be imposed higher charges. Licence holders with a high degree of rollout and a small holding of spectrum will have lower charges. Licence holders will have to pay more for spectrum in low frequency bands. However, the total charges imposed by PTS for the area of radio will not increase.
The new model for charges is technology-neutral and will be implemented gradually over the course of several years for various types of licence. The first category in line for implementation is block and television licences in 2010. RTTE fees will also be changed for block and television licences.
In The new model, Licence holders will find it easy to anticipate future annual charges, which will for example benefit the second-hand market.
The new model for charges is technology-neutral and will be implemented gradually over the course of several years for various types of licence. The first category in line for implementation is block and television licences in 2010. RTTE fees will also be changed for block and television licences.
In The new model, Licence holders will find it easy to anticipate future annual charges, which will for example benefit the second-hand market.
FCC to propose 'Net Neutrality' rule - Implementation will be a challenge
It has been reported in the media that the head of the FCC plans to propose new rules that would prohibit Internet service providers from interfering with the free flow of information and certain applications over their network. The proposal is being refered by term 'Internet neutrality' — the equal treatment of Internet traffic. This would bar Internet service providers such as Verizon Communications Inc., Comcast Corp. or AT&T Inc., from slowing or blocking certain services or content flowing through their vast networks.
Now what I am wondering is that how would a regulator ensure the implementation. If an ISP decides to interfere in access of Youtube on grounds that such high content sites actually come in way of fair use of resources by all; its difficult for the regulator to know the same. Without strict rules ensuring Net neutrality, it is feared that the communications companies could interfere with the transmission of content, such as TV shows delivered over the Internet, that compete with services the ISPs offer, like cable television.
Internet providers have opposed regulations that would inhibit the way they control their networks, arguing they need to be able to make sure applications that consume a lot of bandwidth don't slow Internet access to other users.
The FCC adopted four principles on Internet policy in 2005. Two years later, it said it would study the business practices of high-speed Internet providers and consider whether a principle of nondiscrimination in traffic should be added. The FCC's existing net neutrality principles have focused on high-speed Internet access delivered over wireline systems. But Google Inc. and other big technology companies, as well as consumer advocacy groups, have called for rules that would require wireless networks to be similarly open to all devices and applications.
Extending the principles to the wireless arena is going to be a bit difficult because the regulation of wireless is very different than the regulation of the wireline networks, where the FCC has played a much stronger role. In wireless, companies operate in a very independent market with absolutely no government subsidies or government involvement.
The FCC began wading into the issue even before Genachowski became FCC chairman. Last year the FCC rebuked Comcast for blocking or delaying some forms of Internet file-sharing. Comcast agreed to stop the practice. The new rule to the extent will be more prescriptive and implementation, I think, will remain a challenge
Now what I am wondering is that how would a regulator ensure the implementation. If an ISP decides to interfere in access of Youtube on grounds that such high content sites actually come in way of fair use of resources by all; its difficult for the regulator to know the same. Without strict rules ensuring Net neutrality, it is feared that the communications companies could interfere with the transmission of content, such as TV shows delivered over the Internet, that compete with services the ISPs offer, like cable television.
Internet providers have opposed regulations that would inhibit the way they control their networks, arguing they need to be able to make sure applications that consume a lot of bandwidth don't slow Internet access to other users.
The FCC adopted four principles on Internet policy in 2005. Two years later, it said it would study the business practices of high-speed Internet providers and consider whether a principle of nondiscrimination in traffic should be added. The FCC's existing net neutrality principles have focused on high-speed Internet access delivered over wireline systems. But Google Inc. and other big technology companies, as well as consumer advocacy groups, have called for rules that would require wireless networks to be similarly open to all devices and applications.
Extending the principles to the wireless arena is going to be a bit difficult because the regulation of wireless is very different than the regulation of the wireline networks, where the FCC has played a much stronger role. In wireless, companies operate in a very independent market with absolutely no government subsidies or government involvement.
The FCC began wading into the issue even before Genachowski became FCC chairman. Last year the FCC rebuked Comcast for blocking or delaying some forms of Internet file-sharing. Comcast agreed to stop the practice. The new rule to the extent will be more prescriptive and implementation, I think, will remain a challenge
Is WiMAX out of 4G race ?
I found the recent reports on HSPA and WiMAX users data very interesting. Does the reports indicate that the WiMAX is out of 4G race ? Pl go thru -
As per the GSM Association reports - The number of live HSPA (High Speed Packet Access) connections will pass 150 million globally this summer, while according to a report published by Marvedis this week WiMAX has just 3.5 million users. This puts HSPA firmly ahead of other mobile broadband technologies.
As per Wireless Intelligence reports , EMEA (Europe, the Middle East and Africa) have 49.5 million HSPA users currently and almost 60 million predicted by the end of the summer. Asia-Pacific is a close second at 47.7 million subscribers and by the end of September will have over 56 million. The U.S. trails significantly, with about 32 million HSPA connections growing to perhaps 37 million by September, while the rest of the Americas will hit just over four million subscribers in the same time frame.
Why HSPA may be a prefered choice to operators -
HSPA is an attractive option for mobile operators as the technology allows operators to upgrade their existing 3G networks, often by simply upgrading the software. This gives HSPA a leg up over WiMAX, which requires new network infrastructure. Further, its performance rates are attractive, as well. HSPA download rates range from 3.6 Mbps to 14.4 Mbps, and a handful of operators are beginning to roll out 21 Mbps using HSPA+.
The GSMA reports that there are more than 300 upgraded networks across 127 countries. More than 1500 HSPA-enabled devices are on the market. Its rapid adoption — faster even than SMS — has led the organization to embrace HSPA as the dominant mobile broadband technology.
The report expects growth to continue at a rapid pace, predicting 200 million connections by the first quarter of 2010.
As per the GSM Association reports - The number of live HSPA (High Speed Packet Access) connections will pass 150 million globally this summer, while according to a report published by Marvedis this week WiMAX has just 3.5 million users. This puts HSPA firmly ahead of other mobile broadband technologies.
As per Wireless Intelligence reports , EMEA (Europe, the Middle East and Africa) have 49.5 million HSPA users currently and almost 60 million predicted by the end of the summer. Asia-Pacific is a close second at 47.7 million subscribers and by the end of September will have over 56 million. The U.S. trails significantly, with about 32 million HSPA connections growing to perhaps 37 million by September, while the rest of the Americas will hit just over four million subscribers in the same time frame.
Why HSPA may be a prefered choice to operators -
HSPA is an attractive option for mobile operators as the technology allows operators to upgrade their existing 3G networks, often by simply upgrading the software. This gives HSPA a leg up over WiMAX, which requires new network infrastructure. Further, its performance rates are attractive, as well. HSPA download rates range from 3.6 Mbps to 14.4 Mbps, and a handful of operators are beginning to roll out 21 Mbps using HSPA+.
The GSMA reports that there are more than 300 upgraded networks across 127 countries. More than 1500 HSPA-enabled devices are on the market. Its rapid adoption — faster even than SMS — has led the organization to embrace HSPA as the dominant mobile broadband technology.
The report expects growth to continue at a rapid pace, predicting 200 million connections by the first quarter of 2010.
Clearwire pushing WiMAX in USA
Clearwire Communications is moving forward WiMAX deployment in the United States at a quick pace, announcing the latest launch of its mobile WiMAX service, CLEAR, in Las Vegas, Nev., just one month after its Atlanta, Ga. service rollout. The new service covers approximately 638 square miles, making WiMAX available to an estimated 1.7 million people.
Providing backhaul for the 4G service is Ciena Corporation. Motorola is the end-to-end system provider for this launch. In addition to providing 4G connectivity with wired and wireless modems operating in the 2.5 GHz frequency band, more than 300 cell sites in the Las Vegas area utilize the company's WAP 400 Diversity Access Point product.
Pricing options start at $20 per month for home Internet service or $30 per month for mobile Internet. Customers can purchase day passes for $10
Providing backhaul for the 4G service is Ciena Corporation. Motorola is the end-to-end system provider for this launch. In addition to providing 4G connectivity with wired and wireless modems operating in the 2.5 GHz frequency band, more than 300 cell sites in the Las Vegas area utilize the company's WAP 400 Diversity Access Point product.
Pricing options start at $20 per month for home Internet service or $30 per month for mobile Internet. Customers can purchase day passes for $10
Indian GSM operators add 9 million users in June
India’s GSM-based mobile operators added close to nine million users in June, up from 8.3 million in May, as per the data released by GSM operators’ body. The GSM subscriber base stood at 315.7 million in June end. The data compiled by Cellular Operators’ Association of India (COAI) does not include user figures for GSM operator Reliance Telecom. As per COAI, GSM operator Bharti Airtel led in terms of user additions in June, acquiring 2.8 million subscribers. It became the first operator to cross the 100-million subscriber mark, ending the month with 102.3-million users.
China surpasses USA in web users population
China's population of Web users hits 338 million, surpassing population of the United States
The country's rapid economic growth and expansion of Internet access in more areas has fueled a sharp increase in Internet users, totaling 338 million by the end of June, a government-sanctioned research group said. The latest U.S. Census Bureau's figure says the population of the U.S. is just under 307 million. China's population is more than 1.3 billion. China's population of Internet users has been growing at explosive rates despite government efforts to block access to material deemed subversive or pornographic.
But Internet penetration is still only 25.5 percent. The Pew Internet and American Life Project places U.S. online penetration at more than 70 percent. Internet use on mobile phones has increased 32.1 percent since the beginning of the year to 155 million led by rising use by rural dwellers, the report said. China this year rolled out its third-generation mobile phone service — which supports wireless Web surfing — which is expected to set off a new surge in Internet use.
The country's rapid economic growth and expansion of Internet access in more areas has fueled a sharp increase in Internet users, totaling 338 million by the end of June, a government-sanctioned research group said. The latest U.S. Census Bureau's figure says the population of the U.S. is just under 307 million. China's population is more than 1.3 billion. China's population of Internet users has been growing at explosive rates despite government efforts to block access to material deemed subversive or pornographic.
But Internet penetration is still only 25.5 percent. The Pew Internet and American Life Project places U.S. online penetration at more than 70 percent. Internet use on mobile phones has increased 32.1 percent since the beginning of the year to 155 million led by rising use by rural dwellers, the report said. China this year rolled out its third-generation mobile phone service — which supports wireless Web surfing — which is expected to set off a new surge in Internet use.
UK telecom market sees its first quaterly net loss of mobile customers
In Q1 09, the UK mobile market saw its first quarterly net loss of customers for three years. The total customer base contracted by 0.56m to finish the quarter on 75.59m, equivalent to a penetration rate of 123.8%. The proportionate annual growth rate fell to 3.9% from 4.9% a year earlier, and in fact this was the second lowest rate ever seen in the UK market, the lowest being the 3.1% recorded in 2006. This may not be indicative of a long-term decline in growth, however. The Q4 06 figure of 3.1% was followed by eight quarters in which annual growth hovered around 5%, and the Q1 09 rate may prove to be a similar blip.
The greatest loss in Q1 09 was suffered by Vodafone, which shed 0.45m customers to take its total to 18.72m. A year earlier Vodafone was the UK's market leader (if we exclude O2's customers through its Tesco MVNO), but at the end of Q1 09 it was 0.86m adrift of O2. Although its second place remains secure, this was the biggest quarterly decline in customers Vodafone has ever seen. On an annual basis, it added just 0.18m.
However, T-Mobile's annual performance was even worse, a 0.26m loss taking its total customer base back under 10m for the second time, with an end-quarter figure of 9.99m. Its Q1 09 loss stood at 0.21m. Virgin, which operates as an MVNO on T-Mobile's network, was the only other major operator to lose customers in Q1 09, a 94.3k decline taking its base to 4.02m. This was its fifth successive quarterly decline, and on an annual basis it lost 0.41m customers. The other operators may not have lost customers, but they did not perform well. O2 top-scored with a gain of just 110.6k, which took its total base to 19.58m. Tesco added around 40k to break the 2m barrier, Orange was up 32k to 16.44m and Hutchison gained half this number to finish on 4.43m.
The ARPU figures provided no respite from this somewhat gloomy picture. O2 was down 19.6% to €24.20 and T-Mobile down 19.2% to €21, although the strengthening of the Euro had a part to play here. Vodafone was also down, losing 3.7% to record £20.80, whilst Orange was up 1.1% to £22.58, although its rolling annual average figures obscure the real quarterly trend.
The greatest loss in Q1 09 was suffered by Vodafone, which shed 0.45m customers to take its total to 18.72m. A year earlier Vodafone was the UK's market leader (if we exclude O2's customers through its Tesco MVNO), but at the end of Q1 09 it was 0.86m adrift of O2. Although its second place remains secure, this was the biggest quarterly decline in customers Vodafone has ever seen. On an annual basis, it added just 0.18m.
However, T-Mobile's annual performance was even worse, a 0.26m loss taking its total customer base back under 10m for the second time, with an end-quarter figure of 9.99m. Its Q1 09 loss stood at 0.21m. Virgin, which operates as an MVNO on T-Mobile's network, was the only other major operator to lose customers in Q1 09, a 94.3k decline taking its base to 4.02m. This was its fifth successive quarterly decline, and on an annual basis it lost 0.41m customers. The other operators may not have lost customers, but they did not perform well. O2 top-scored with a gain of just 110.6k, which took its total base to 19.58m. Tesco added around 40k to break the 2m barrier, Orange was up 32k to 16.44m and Hutchison gained half this number to finish on 4.43m.
The ARPU figures provided no respite from this somewhat gloomy picture. O2 was down 19.6% to €24.20 and T-Mobile down 19.2% to €21, although the strengthening of the Euro had a part to play here. Vodafone was also down, losing 3.7% to record £20.80, whilst Orange was up 1.1% to £22.58, although its rolling annual average figures obscure the real quarterly trend.
Mobile broadband expected to reach 418m Worldwide by 2017
Newly released forecasts from Coda Research Consultancy's report show that portable laptop and netbook users accessing the internet via mobile broadband will produce US$48bn in operator revenues in 2017, will number 418m worldwide, and will generate and consume an immense 1.8 exabytes of traffic per month - a forty fold increase over 2009.
The most significant growth will occur in the Asia-Pacific region, where users will amount to 162m by 2017. Europe will account for 94m users, and North America for 58m users. Impacts of Long Term Evolution (LTE) will be dramatic, with half of all mobile broadband via netbook and laptop users employing LTE worldwide in 2017. LTE users will hit 38m in 2013 after a ramp up in LTE production in 2012, and will rise to 209m by 2017, a 1100% increase over 2012. Three quarters of users in Europe and nearly two thirds of users in North America will employ LTE in 2017. This contrasts with just over half of users in Asia Pacific, and 12% in Central and South America. LTE take up will be greatly skewed toward European and North American markets in the short to medium term, where ARPU will be highest. However, report envisage significant take up in China, and see countries like India bypass 3G altogether, and move straight to LTE.
More generally, mobile broadband user growth will not correspond with operator revenue growth, particularly in less wealthy regions of Asia-Pacific, thus significantly impacting mobile broadband ARPU. For example, operator revenues from Asia Pacific will grow at only 50% of the rate of users, which contrasts with 63% for Europe. The silver lining however, is that LTE ARPU will be 17% higher than for mobile broadband in general.
LTE operator revenues will be greatest in Europe, where they will rise by a CAGR of 47% from 2012 to 2017, and will form 83% of all mobile broadband revenues in that region. LTE revenues from North America will grow significantly more, at a CAGR of 59% between 2012 and 2017, and LTE will form 72% of its mobile broadband revenues. In contrast, LTE revenues will form only 13% of all mobile broadband revenues in Middle East and Africa.
LTE usage via portables will lead to more traffic per user than for mobile broadband in general. This will further increase pressure upon network capacity, and will hit 1.1 exabytes per month in 2017. Asia Pacific alone will take up 45% of this, whilst Europe will take up a third, and North America 17%.
Video will dominate mobile broadband traffic to and from portables, and will account for over half (53%) of traffic by 2017. The bad news for rights' holders is that one fifth of all traffic will be P2P. Nearly half of video traffic (47%) and nearly two thirds of P2P traffic will be consumed in Asia Pacific. This reflects the dominant position this region will play in mobile broadband usage and how mobile broadband will continue to be the sole vehicle for many people to gain broadband connectivity in developing countries such as India and China.
In summing up the report's forecasts, Steve Smith said, "Clearly, tremendous opportunities for both operators and device and component vendors exist, but the risks are significant. With enormous growth in traffic and considerable decline in ARPU, operators will need to be ruthlessly efficient. Asia Pacific is going to be the hotbed for growth, but it is a complex picture of emerging markets, developed markets and even markets that will leapfrog 3G altogether. LTE is going to be an important cushion for operators, but our research shows they will need to take into account the very different factors impacting 3G and 3G+ growth across regions and decide carefully how, when and where to market LTE."
The most significant growth will occur in the Asia-Pacific region, where users will amount to 162m by 2017. Europe will account for 94m users, and North America for 58m users. Impacts of Long Term Evolution (LTE) will be dramatic, with half of all mobile broadband via netbook and laptop users employing LTE worldwide in 2017. LTE users will hit 38m in 2013 after a ramp up in LTE production in 2012, and will rise to 209m by 2017, a 1100% increase over 2012. Three quarters of users in Europe and nearly two thirds of users in North America will employ LTE in 2017. This contrasts with just over half of users in Asia Pacific, and 12% in Central and South America. LTE take up will be greatly skewed toward European and North American markets in the short to medium term, where ARPU will be highest. However, report envisage significant take up in China, and see countries like India bypass 3G altogether, and move straight to LTE.
More generally, mobile broadband user growth will not correspond with operator revenue growth, particularly in less wealthy regions of Asia-Pacific, thus significantly impacting mobile broadband ARPU. For example, operator revenues from Asia Pacific will grow at only 50% of the rate of users, which contrasts with 63% for Europe. The silver lining however, is that LTE ARPU will be 17% higher than for mobile broadband in general.
LTE operator revenues will be greatest in Europe, where they will rise by a CAGR of 47% from 2012 to 2017, and will form 83% of all mobile broadband revenues in that region. LTE revenues from North America will grow significantly more, at a CAGR of 59% between 2012 and 2017, and LTE will form 72% of its mobile broadband revenues. In contrast, LTE revenues will form only 13% of all mobile broadband revenues in Middle East and Africa.
LTE usage via portables will lead to more traffic per user than for mobile broadband in general. This will further increase pressure upon network capacity, and will hit 1.1 exabytes per month in 2017. Asia Pacific alone will take up 45% of this, whilst Europe will take up a third, and North America 17%.
Video will dominate mobile broadband traffic to and from portables, and will account for over half (53%) of traffic by 2017. The bad news for rights' holders is that one fifth of all traffic will be P2P. Nearly half of video traffic (47%) and nearly two thirds of P2P traffic will be consumed in Asia Pacific. This reflects the dominant position this region will play in mobile broadband usage and how mobile broadband will continue to be the sole vehicle for many people to gain broadband connectivity in developing countries such as India and China.
In summing up the report's forecasts, Steve Smith said, "Clearly, tremendous opportunities for both operators and device and component vendors exist, but the risks are significant. With enormous growth in traffic and considerable decline in ARPU, operators will need to be ruthlessly efficient. Asia Pacific is going to be the hotbed for growth, but it is a complex picture of emerging markets, developed markets and even markets that will leapfrog 3G altogether. LTE is going to be an important cushion for operators, but our research shows they will need to take into account the very different factors impacting 3G and 3G+ growth across regions and decide carefully how, when and where to market LTE."
Encouraging number portability results in Israel
Since we are looking forward towards introduction of number portability in India, I thought this information would be interesting - Over 600,000 Mobile Numbers Ported in Israel Since MNP Introduced.
Over a year and a half since number portability plan was implemented in Israel, 607,000 mobile subscribers and 418,000 fixed subscribers have switched companies, reports the Ministry of Communications.
According to figures from the Mobile World, Israel ended Q1 '09 with an estimated 8.7 million mobile phone subscribers, with an additional 500,000 subscribers from the Palestinian Territories.
Over a year and a half since number portability plan was implemented in Israel, 607,000 mobile subscribers and 418,000 fixed subscribers have switched companies, reports the Ministry of Communications.
According to figures from the Mobile World, Israel ended Q1 '09 with an estimated 8.7 million mobile phone subscribers, with an additional 500,000 subscribers from the Palestinian Territories.
Silver lining for fixed access opearators - Mobile broadband in UK fail to live upto expectation
According to the latest data from the UK broadband comparison website Broadband Genie, only around one in ten (11 per cent) mobile broadband users are satisfied with the speed of their mobile broadband. While around a quarter were undecided, two thirds claimed their 3G broadband wasn't fast enough. According to Genie - Mobile Broadband Fails Miserably to Live Up to Consumer Expectations. The public perception of mobile broadband is often of a service that is comparable in speed and stability to fixed-line broadband, which simply isn't the case - and won't be for the foreseeable future. Exaggerated advertising and unrealistic 'up to' speed claims have given the public a rose-tinted idea of mobile broadband that the service cannot, in most cases, hope to live up to.
China 3 G tender - 5 firms to divide the pie
Huawei, Motorola and Ericsson are reported to have been the biggest winners in the latest WCDMA infrastructure tender from China Unicom. The firm believed to have issued a tender to cover 55 cities in 30 provinces - the first stage in a rollout to cover 282 cities with a total CAPEX of around US$11 billion during 2009. Huawei is understood to have won 30.6% of the tender - and will carry out the work in cooperation with Motorola, which outsourced manufacturing parts to Huawei. Ericsson and its partners (New Postcom and FiberHome) secured a 25.6 per cent share.
In a move which surprised industry watchers, ZTE managed to take 21.5% of the tender - despite being weaker in the WCDMA market than its rivals. Nokia Siemens Networks took 11.1% of the tender, followed by Alcatel-Lucent which picked up 10.2 percent.
China Unicom is pushing to launch its 3G network by the middle of May this year - in an effort to catch up with China Mobile which has been building its own trial 3G network for over a y
In a move which surprised industry watchers, ZTE managed to take 21.5% of the tender - despite being weaker in the WCDMA market than its rivals. Nokia Siemens Networks took 11.1% of the tender, followed by Alcatel-Lucent which picked up 10.2 percent.
China Unicom is pushing to launch its 3G network by the middle of May this year - in an effort to catch up with China Mobile which has been building its own trial 3G network for over a y
Is the hype about infrastructure sharing over in India ?
Here is a news item from ET which suggests that the hype about infrastructure sharing may be over in India.
"Mumbai based telecom network services company GTL has cut its revenue growth guidance from 11-12% to 6-7% for FY 2009 citing increased pressure on pr
icing and slower rollout from the telecom operators.
The company posted 18% fall in its net profit (PAT) at Rs 32.1 crore for the quarter ended December 2008. The drop in PAT was despite 5% rise in consolidated sales at Rs 467.8 crore as the company reeled under the pressure on its margins. Operating profit grew by 5% to Rs 56.8 crore.
It's performance during the third quarter has been quite muted compared to the previous two quarters of the current fiscal when both sales and profits had witnessed double digit growth. On margin front, the company could maintain its operating margin at 12% compared to the year-ago number thanks to cost cutting measures.
Going ahead, the company has signaled delay in new network rollout by telecom operators given tighter credit situation in international market and slowing pace of economic activities. This is likely to keep the business growth sluggish in the coming quarters.
The company has recommended buy back of shares at a price not exceeding Rs 260 per share for a cost of Rs 225 crore. The stock ended at Rs 220.8 on NSE on Thursday, a rise of 0.8% over the previous day's close. "
"Mumbai based telecom network services company GTL has cut its revenue growth guidance from 11-12% to 6-7% for FY 2009 citing increased pressure on pr
icing and slower rollout from the telecom operators.
The company posted 18% fall in its net profit (PAT) at Rs 32.1 crore for the quarter ended December 2008. The drop in PAT was despite 5% rise in consolidated sales at Rs 467.8 crore as the company reeled under the pressure on its margins. Operating profit grew by 5% to Rs 56.8 crore.
It's performance during the third quarter has been quite muted compared to the previous two quarters of the current fiscal when both sales and profits had witnessed double digit growth. On margin front, the company could maintain its operating margin at 12% compared to the year-ago number thanks to cost cutting measures.
Going ahead, the company has signaled delay in new network rollout by telecom operators given tighter credit situation in international market and slowing pace of economic activities. This is likely to keep the business growth sluggish in the coming quarters.
The company has recommended buy back of shares at a price not exceeding Rs 260 per share for a cost of Rs 225 crore. The stock ended at Rs 220.8 on NSE on Thursday, a rise of 0.8% over the previous day's close. "
More than 500 million mobile financial services users expected by 2013 !
The number of mobile phone subscribers that use their phones for mobile banking transactions will exceed 150m globally by 2011, according to a new study by Juniper Research. These figures refer to additive banking which is focused on developed markets rather than transformational banking. Additive banking in this context adds further choices or distribution channels for banks to serve their customers or make the banking experience more convenient for existing customers.
The Juniper Research report determined that the mobile banking market is currently most advanced in the Far East, but that growing numbers of mobile banking services are being offered in North America and Western Europe. The developed nations of the Far East, North America and Western Europe are forecast to account for over 70% of the user base by 2011.
Transactional or "push" mobile banking is being offered increasingly by banks via downloadable applications or the mobile web, complementing existing SMS messaging services for balance and simple information enquiries. Mobile banking is a key element in banks' distribution channel strategies as they compete to attract and retain customers. The Juniper report highlighted the extra user convenience as a key benefit. The mobile phone is the device that people - especially Generation Y - will not leave home without. Mobile banking is an addition to the wide choice of applications and services that they can access through their handsets to make life easier, especially via smart phones such as the iPhone.
However the report identified several factors that will need addressing to really foster market development including financial regulations which vary from country to country, application slickness, and security. Whatever the reality of the strength of the security, it is the perception and image in the mind of the user that dictates whether they will trust the service.
Mobile technology market-watchers are always on the lookout for the next “killer app,” and according to ABI Research, mobile financial services are very likely to become the “next big thing” that will attract many millions of consumers.
“Mobile financial services have the potential to be bigger than mobile TV and premium mobile content in terms of numbers of subscribers,” says senior analyst Mark Beccue. “They have the broadest demographic appeal: almost anybody over the age of 18 is a potential user.”
Mobile financial services are of three kinds: mobile banking (essentially a mobile form of today’s online banking), mobile domestic person-to-person payments, and international person-to-person payments.
While mobile banking services are likely to find their greatest market in the industrialized world, mobile domestic and international person-to-person payments may be game-changing developments in less prosperous regions, enabling commerce, extending services to rural regions, and possibly even helping people previously excluded from the financial system to lift themselves out of poverty.
The major promoters of this market, will be banking institutions. It allows banks to increase customer ‘stickiness,’ to cut costs and automate, and most importantly, to reach the unbanked. They are scrambling for ways to do it. Moreover this market is largely recession-proof because with few exceptions it’s not about consumers spending their money, but managing it.
When it comes to mobile banking, Bank of America has been a leader. It launched its mobile banking services in May 2007 and by June of the following year already had a million mobile banking customers. Currently the service covers about 1.5 million subscribers.
The Juniper Research report determined that the mobile banking market is currently most advanced in the Far East, but that growing numbers of mobile banking services are being offered in North America and Western Europe. The developed nations of the Far East, North America and Western Europe are forecast to account for over 70% of the user base by 2011.
Transactional or "push" mobile banking is being offered increasingly by banks via downloadable applications or the mobile web, complementing existing SMS messaging services for balance and simple information enquiries. Mobile banking is a key element in banks' distribution channel strategies as they compete to attract and retain customers. The Juniper report highlighted the extra user convenience as a key benefit. The mobile phone is the device that people - especially Generation Y - will not leave home without. Mobile banking is an addition to the wide choice of applications and services that they can access through their handsets to make life easier, especially via smart phones such as the iPhone.
However the report identified several factors that will need addressing to really foster market development including financial regulations which vary from country to country, application slickness, and security. Whatever the reality of the strength of the security, it is the perception and image in the mind of the user that dictates whether they will trust the service.
Mobile technology market-watchers are always on the lookout for the next “killer app,” and according to ABI Research, mobile financial services are very likely to become the “next big thing” that will attract many millions of consumers.
“Mobile financial services have the potential to be bigger than mobile TV and premium mobile content in terms of numbers of subscribers,” says senior analyst Mark Beccue. “They have the broadest demographic appeal: almost anybody over the age of 18 is a potential user.”
Mobile financial services are of three kinds: mobile banking (essentially a mobile form of today’s online banking), mobile domestic person-to-person payments, and international person-to-person payments.
While mobile banking services are likely to find their greatest market in the industrialized world, mobile domestic and international person-to-person payments may be game-changing developments in less prosperous regions, enabling commerce, extending services to rural regions, and possibly even helping people previously excluded from the financial system to lift themselves out of poverty.
The major promoters of this market, will be banking institutions. It allows banks to increase customer ‘stickiness,’ to cut costs and automate, and most importantly, to reach the unbanked. They are scrambling for ways to do it. Moreover this market is largely recession-proof because with few exceptions it’s not about consumers spending their money, but managing it.
When it comes to mobile banking, Bank of America has been a leader. It launched its mobile banking services in May 2007 and by June of the following year already had a million mobile banking customers. Currently the service covers about 1.5 million subscribers.
Will Indian Telecom sector M&A activity shrink in 2009?
For Indian telecom’s M&A story, 2009 will be all about making meaningful acquisitions where firms looking at India and Indian firms planning to buy overseas will look for clear value. The year ahead may not present too many huge billion dollar plus deals, but the M&A saga will continue. The paucity of funds will be a deterrent and that is expected to bring in deals with more competitive valuations.
By all counts, 2009 will be a year which will be characterised by limited access to funds and valuations that are likely to be more compelling. The symptoms were actually being felt this year which had its fair share of deals with a ticket value of $1 billion.
Among them were Norway’s Telenor deciding to pick up a 60% stake in Unitech for $1.2 billion and the more recent instance of Japan’s NTT DoCoMo acquiring a 26% stake in unlisted Tata Teleservices for $2.7 billion.
The total value of all telecom M&A deals for 2008 has been just over $9 billion which was less than half of the $22 billion clocked for 2007, according to Thomson Reuters’ data. The year 2007 witnessed the sale of Hutchison’s telecom business in India to Vodafone for $10.8 billion. This accounted for a huge chunk of the $22 billion.
Interestingly, 2008 has been a year that witnessed the entry of new operators like Etisalat, Telenor and NTT DoCoMo. Consolidation in telecom accounted for one-third of the total M&As in the country. The largest of around 20 deals this year was Japanese major NTT DoCoMo's purchase of a 26 per cent stake in Tata Teleservices. In another deal, Dubai-based Emirates Telecommunications Corp (Etisalat) bought a 45 per cent stake in Swan Telecom in cash for USD 900 million.
But 2009 may see M&A activity to emerge in infrastructure business. Please CLICK HERE to read related article.
By all counts, 2009 will be a year which will be characterised by limited access to funds and valuations that are likely to be more compelling. The symptoms were actually being felt this year which had its fair share of deals with a ticket value of $1 billion.
Among them were Norway’s Telenor deciding to pick up a 60% stake in Unitech for $1.2 billion and the more recent instance of Japan’s NTT DoCoMo acquiring a 26% stake in unlisted Tata Teleservices for $2.7 billion.
The total value of all telecom M&A deals for 2008 has been just over $9 billion which was less than half of the $22 billion clocked for 2007, according to Thomson Reuters’ data. The year 2007 witnessed the sale of Hutchison’s telecom business in India to Vodafone for $10.8 billion. This accounted for a huge chunk of the $22 billion.
Interestingly, 2008 has been a year that witnessed the entry of new operators like Etisalat, Telenor and NTT DoCoMo. Consolidation in telecom accounted for one-third of the total M&As in the country. The largest of around 20 deals this year was Japanese major NTT DoCoMo's purchase of a 26 per cent stake in Tata Teleservices. In another deal, Dubai-based Emirates Telecommunications Corp (Etisalat) bought a 45 per cent stake in Swan Telecom in cash for USD 900 million.
But 2009 may see M&A activity to emerge in infrastructure business. Please CLICK HERE to read related article.
Mobile tariffs to lower further in 2009?
As per reports in Economic Times, come 2009, telecom tariffs are set to fall significantly! Sector regulator TRAI on Wednesday set the ball rolling for lower tariffs by seeking the industry's views on reducing the interconnect charges (IUC).
Since IUC charges constitute a significant amount of the call charges, any reduction in this will reflect in a direct fall in tariffs. A reduction in IUC tariffs coupled with increased competition with the entry of several new players could lead to local call tariffs being as low as 10 paise per minute and STD at about 25-35 paise per minute by 2010.
Inetrconnect Usage Charges are those charges that are payable by one telecom operator to the others for use of their networks either for origination, termination or carriage of a call. Inter operator calls constitute a major part of the total calls handled by the telecommunications network. These charges are important as they can transfer network costs between operators and thus affect their relative scale and prosperity.
The current regime is as follows:
Mobile termination charge ranges from Rs 0.13 to Rs 0.30 per minute
Fixed termination charge varies from Rs 0.19 to Rs 0.28 minute
Average Carriage Charges per minute after considering the cost in respect of all NLDOs ranges from Rs 0.16 to Rs 0.72 per minute
These charges were fixed way back in 2002-03 and have not been reviewed since then, even as the overall call tariffs have by over 300% during the same time period.
The regulator will announce a reduction in IUC charges after it receives inputs from the industry.
In addition to lower tariffs, a reduction in IUC charges will also enable several of the new players who were granted telecom licences earlier this year to reduce their operational costs when they launch services. New entrants and some of the existing operators have been demanding a reduction in IUC tariffs for a long time.
Since IUC charges constitute a significant amount of the call charges, any reduction in this will reflect in a direct fall in tariffs. A reduction in IUC tariffs coupled with increased competition with the entry of several new players could lead to local call tariffs being as low as 10 paise per minute and STD at about 25-35 paise per minute by 2010.
Inetrconnect Usage Charges are those charges that are payable by one telecom operator to the others for use of their networks either for origination, termination or carriage of a call. Inter operator calls constitute a major part of the total calls handled by the telecommunications network. These charges are important as they can transfer network costs between operators and thus affect their relative scale and prosperity.
The current regime is as follows:
Mobile termination charge ranges from Rs 0.13 to Rs 0.30 per minute
Fixed termination charge varies from Rs 0.19 to Rs 0.28 minute
Average Carriage Charges per minute after considering the cost in respect of all NLDOs ranges from Rs 0.16 to Rs 0.72 per minute
These charges were fixed way back in 2002-03 and have not been reviewed since then, even as the overall call tariffs have by over 300% during the same time period.
The regulator will announce a reduction in IUC charges after it receives inputs from the industry.
In addition to lower tariffs, a reduction in IUC charges will also enable several of the new players who were granted telecom licences earlier this year to reduce their operational costs when they launch services. New entrants and some of the existing operators have been demanding a reduction in IUC tariffs for a long time.
Indian telecom tower industry heading for capacity surplus?
The telecom tower industry in India seems to be heading for a capacity glut. The sector will close this fiscal with over 2,50,000 towers owned by operators and stand-alone firms. With companies having aggressive tower rollout targets for years ahead, India could end up with more number of towers than required. The telecom regulator Trai has said the industry requires 3,00,000 towers by FY11.
The over-capacity situation will not only lead to longer pay-back periods for tower companies, but will also trigger consolidation in the sector. Also, tower companies will have to lower the rentals amid fierce competition, feel analysts. The announcement of merger of Quippo Telecom Infrastructure with Tata Teleservices’ tower arm alludes to significantly falling valuations in the sector. Capacity creation has risen much ahead of the aggregate minutes of usage (MoU), putting pressures on incremental margins. We are likely to see two parallel but mutually contradicting trends. With the advent of 3G services and increasing MoU in the urban markets, we are likely to see good growth in utilisation, fresh investments and rentals. But rentals and utilisation in the low population density rural markets are likely to remainunder pressure for the next 2-3 years.
Indus Towers, the joint venture between Bharti Airtel, Vodafone Essar and Idea Cellular is expected to have 95,000 towers by March this year while the figures for Bharti’s tower arm Bharti Infratel is 27,000 and for Reliance Infratel is 48,000. Besides this, Vodafone has 5,000 towers (ex-Indus), BSNL 39,000, Tata-Quippo joint venture 18,000 and GTL Infrastructure is targeting 10,000 towers by fiscal-end. This takes the total count to 2,43,000 and excludes those owned by MTNL, Idea, Aircel and tower firms like Excel and Essar Telecom Infrastructure.
As far as capacity is concerned, the sector will have more than it may require. There is going to be consolidation. Only those companies that have tenancy ratios of two and above will be profitable. In the meantime, rentals will have to take a hit.
Companies, however, have big expansion plans going forward. While Tata-Quippo is looking at a portfolio of 50,000 towers by 2012, GTL is eyeing 25,000 towers by 2011. Indus is learnt to be adding 3,000-4,0000 towers every month. By March 2010, RCOM wants to expand tower infrastructure to over 70,000 multi-tenancy towers, each capable of supporting four or more operators.
But the big question is where is the demand going to come from. While new operators like Unitech and Swan Telecom are readying to roll out operations, they will not be able to make a big difference to the demand-supply situation in the sector. Also viability of these new players remains questionable.
The over-capacity situation will not only lead to longer pay-back periods for tower companies, but will also trigger consolidation in the sector. Also, tower companies will have to lower the rentals amid fierce competition, feel analysts. The announcement of merger of Quippo Telecom Infrastructure with Tata Teleservices’ tower arm alludes to significantly falling valuations in the sector. Capacity creation has risen much ahead of the aggregate minutes of usage (MoU), putting pressures on incremental margins. We are likely to see two parallel but mutually contradicting trends. With the advent of 3G services and increasing MoU in the urban markets, we are likely to see good growth in utilisation, fresh investments and rentals. But rentals and utilisation in the low population density rural markets are likely to remainunder pressure for the next 2-3 years.
Indus Towers, the joint venture between Bharti Airtel, Vodafone Essar and Idea Cellular is expected to have 95,000 towers by March this year while the figures for Bharti’s tower arm Bharti Infratel is 27,000 and for Reliance Infratel is 48,000. Besides this, Vodafone has 5,000 towers (ex-Indus), BSNL 39,000, Tata-Quippo joint venture 18,000 and GTL Infrastructure is targeting 10,000 towers by fiscal-end. This takes the total count to 2,43,000 and excludes those owned by MTNL, Idea, Aircel and tower firms like Excel and Essar Telecom Infrastructure.
As far as capacity is concerned, the sector will have more than it may require. There is going to be consolidation. Only those companies that have tenancy ratios of two and above will be profitable. In the meantime, rentals will have to take a hit.
Companies, however, have big expansion plans going forward. While Tata-Quippo is looking at a portfolio of 50,000 towers by 2012, GTL is eyeing 25,000 towers by 2011. Indus is learnt to be adding 3,000-4,0000 towers every month. By March 2010, RCOM wants to expand tower infrastructure to over 70,000 multi-tenancy towers, each capable of supporting four or more operators.
But the big question is where is the demand going to come from. While new operators like Unitech and Swan Telecom are readying to roll out operations, they will not be able to make a big difference to the demand-supply situation in the sector. Also viability of these new players remains questionable.
8 million GSM mobile customers added in Dec 2008 in India
India's GSM players have added over 8 million mobile customers in December 08.
As per the latest data compiled by the Cellular Operators Association of India (COAI), the GSM subscriber base has touched 258 million as of December 2008, up 3.25 % from 249.7 million in November 08. The growth witnessed in December was lead by Bharti Airtel, which added over 2.7 million new users taking its subscriber base to about 87 million. Bharti now commands a market share of 33.22% in the GSM place.
Vodafone Essar with a market share of 23.63% added 2 million subscribers in December 08 taking its total subscriber base to about 60 million. Idea Cellular added close to 1 million subscribers during the same period taking its total subscriber base to 38 million.
State-owned Bharat Sanchar Nigam Limited (BSNL) recorded a positive growth with about over 8 lakh additions in the given period, taking its all India subscriber base to 41 million.
Interestingly, among all circles, category C circle witnessed the highest rate of growth at 3.83%, followed by category B circle at 3.56%, with metros recording the lowest growth rate of 2.3%.
As per the latest data compiled by the Cellular Operators Association of India (COAI), the GSM subscriber base has touched 258 million as of December 2008, up 3.25 % from 249.7 million in November 08. The growth witnessed in December was lead by Bharti Airtel, which added over 2.7 million new users taking its subscriber base to about 87 million. Bharti now commands a market share of 33.22% in the GSM place.
Vodafone Essar with a market share of 23.63% added 2 million subscribers in December 08 taking its total subscriber base to about 60 million. Idea Cellular added close to 1 million subscribers during the same period taking its total subscriber base to 38 million.
State-owned Bharat Sanchar Nigam Limited (BSNL) recorded a positive growth with about over 8 lakh additions in the given period, taking its all India subscriber base to 41 million.
Interestingly, among all circles, category C circle witnessed the highest rate of growth at 3.83%, followed by category B circle at 3.56%, with metros recording the lowest growth rate of 2.3%.
SMS will continue to be the cash cow of mobile data revenues
A new report from Portio Research focused on mobile messaging suggests that SMS will continue to be the cash cow of mobile data revenues for some time to come. The whole mobile messaging industry worth USD 130 billion in 2008 is predicted to be worth USD 224 billion by 2013, 60 percent of non-voice service revenues. The report, ‘Mobile Messaging Futures 2008 – 2013’ ventures that there is nothing likely to stop continued growth of mobile messaging in the short term, driven by a cocktail of ubiquitous SMS, media rich MMS, enterprise based mobile email and youth conscious mobile IM.
SMS remains ‘King’ because there is no cheap, easy to use alternative that will work with all phones and across all networks, it is loved the world over. Indeed in the US market, where SMS was a comparative slow starter, use per subscriber per month is now almost double the European average. In China average users send over 100 messages each month whereas the Filipinos continue to be the leading exponents with 755 messages each month.
Portio also predict a bright future for mobile email even though Japan is the only market where consumer mobile e-mail has surpassed the use of SMS. Email is still the most popular form of business communication and the report suggests that mobile e-mail users worldwide will quadruple from approximately a quarter of a billion users in 2008 to over a billion users by the end of 2013.
The rising star in the mobile messaging constellation is mobile instant messaging (MIM), which is still beset by the technical problems of interoperability. Portio however predict exponential growth in mobile IM users, surging from a worldwide total of 111 million users in 2008 to hit a massive 867 million users by the close of 2013. This massive growth in users will be accompanied by an equally impressive 5-fold increase in revenues from approximately USD 2.5 billion in 2008 to approximately USD 12.4 billion in 2013.
Since MMS hit the mainstream in 2004 the press and analysts have been critical about its level of success. Back then, they wanted to MMS reach the same value as SMS, USD $30bn, for it be considered a success; finally in 2009 this will be a reality. MMS is growing fast and certain countries, such as China and the United States, are becoming very big markets. Worldwide MMS traffic of 75 billion messages in 2008 is impressive, and the future growth looks very good in Asia, as affordable camera-equipped handsets flood the market with China leading the way.
SMS remains ‘King’ because there is no cheap, easy to use alternative that will work with all phones and across all networks, it is loved the world over. Indeed in the US market, where SMS was a comparative slow starter, use per subscriber per month is now almost double the European average. In China average users send over 100 messages each month whereas the Filipinos continue to be the leading exponents with 755 messages each month.
Portio also predict a bright future for mobile email even though Japan is the only market where consumer mobile e-mail has surpassed the use of SMS. Email is still the most popular form of business communication and the report suggests that mobile e-mail users worldwide will quadruple from approximately a quarter of a billion users in 2008 to over a billion users by the end of 2013.
The rising star in the mobile messaging constellation is mobile instant messaging (MIM), which is still beset by the technical problems of interoperability. Portio however predict exponential growth in mobile IM users, surging from a worldwide total of 111 million users in 2008 to hit a massive 867 million users by the close of 2013. This massive growth in users will be accompanied by an equally impressive 5-fold increase in revenues from approximately USD 2.5 billion in 2008 to approximately USD 12.4 billion in 2013.
Since MMS hit the mainstream in 2004 the press and analysts have been critical about its level of success. Back then, they wanted to MMS reach the same value as SMS, USD $30bn, for it be considered a success; finally in 2009 this will be a reality. MMS is growing fast and certain countries, such as China and the United States, are becoming very big markets. Worldwide MMS traffic of 75 billion messages in 2008 is impressive, and the future growth looks very good in Asia, as affordable camera-equipped handsets flood the market with China leading the way.
More than 5 billion mobile subscribers worldwide by 2013 !
According to Informa Telecoms & Media, by 2013 the number of subscriptions worldwide will have risen to more than 5.3 billion and annual revenues from the global mobile market will top USD 1.03 trillion. From end-2007 to end-2013, the global mobile market will see huge growth, increasing in size by over half (56%), according to the latest edition of Informa Telecoms & Media’s Global Mobile Forecasts to 2013.
It took over 20 years to reach 3 billion subscriptions, but another 1.9 billion net additions are forecast in just six years, with the global total nudging past the 5-billion milestone in 2011. With this extraordinary growth, total annual revenues derived from mobile operators will grow by over a third (33.9%), jumping from USD 769 billion in 2007 to USD 1.03 trillion six years later.
Informa Telecoms & Media forecasts more than three quarters (78%) of global net additions between 2007 and 2013 to come from markets in Asia Pacific, Africa and Latin America, which will be the powerhouses of organic growth over the next five years. Astonishingly, nearly half (47%) of the 1.9 billion global net adds will come from just five markets – India, China, Indonesia, Brazil and Russia. By contrast, the mature markets of North America and Western Europe will in total contribute just 8% of global net adds, reflecting the high level of saturation in these markets.
Globally, subscription penetration will approach the 75% mark in 2013, while some countries will push past the 150% barrier – Romania (152%), Russia (153%), Italy (168%), Ukraine (173%) and Greece (183%). Growth in subscriptions (the number of SIMs) will outstrip growth in subscribers (the number of unique users), pointing to greater multi-SIM ownership. The global ratio of subscriptions to subscribers will increase from 1.29 in 2007 to 1.32 in 2013. In Western Europe, the ratio will reach 1.55 in 2013, and even higher (1.75) in Eastern Europe.
As the global subscription base expands, total annual revenues will increase to over USD 1 trillion in 2012. Voice revenues will continue to make up the lion’s share of total revenues, but will see slowing growth, and even a decline from 2010 onwards. With regulators worldwide looking to promote competition, forcing operators to push down voice tariffs, Informa Telecoms & Media expects voice revenues to peak as soon as 2009 in Western Europe, and even by end-2008 in North America. In more developing markets such as the Middle East and Asia Pacific, voice revenues will not peak until 2011, and 2012 in Latin America and the Caribbean.
Operators globally will be challenged to generate sustainable revenues as average revenue per user (ARPU) continues to drop. To keep annual revenues on the up, operators will need to promote usage of data services. Annual data revenues, unlike voice revenues, will go from strength to strength, and will more than double from USD 148 billion in 2007 to USD 347 billion in 2013. As a result, the proportion of total revenues generated by data services will increase from less than a fifth (19.2%) in 2007 to over a third (33.7%) at the end of the forecast period.
With voice revenue streams diminishing, industry players will encourage data spend among subscribers by innovating in non-voice services and differentiating their data service offerings from those of their competitors. While 2G will remain the dominant technology generation by subscription numbers until 2013, its market share will fall from over two thirds (66.9%) in 2007 to less than one third (32.7%) in 2013, as 3G+ technologies continue to gain ground. 3.5G technologies accounted for just 1.2% of total subscriptions in 2007, but will represent nearly a quarter (22.9%) of the global subscription base by 2013 and exceed the number of 3G subscriptions.
It took over 20 years to reach 3 billion subscriptions, but another 1.9 billion net additions are forecast in just six years, with the global total nudging past the 5-billion milestone in 2011. With this extraordinary growth, total annual revenues derived from mobile operators will grow by over a third (33.9%), jumping from USD 769 billion in 2007 to USD 1.03 trillion six years later.
Informa Telecoms & Media forecasts more than three quarters (78%) of global net additions between 2007 and 2013 to come from markets in Asia Pacific, Africa and Latin America, which will be the powerhouses of organic growth over the next five years. Astonishingly, nearly half (47%) of the 1.9 billion global net adds will come from just five markets – India, China, Indonesia, Brazil and Russia. By contrast, the mature markets of North America and Western Europe will in total contribute just 8% of global net adds, reflecting the high level of saturation in these markets.
Globally, subscription penetration will approach the 75% mark in 2013, while some countries will push past the 150% barrier – Romania (152%), Russia (153%), Italy (168%), Ukraine (173%) and Greece (183%). Growth in subscriptions (the number of SIMs) will outstrip growth in subscribers (the number of unique users), pointing to greater multi-SIM ownership. The global ratio of subscriptions to subscribers will increase from 1.29 in 2007 to 1.32 in 2013. In Western Europe, the ratio will reach 1.55 in 2013, and even higher (1.75) in Eastern Europe.
As the global subscription base expands, total annual revenues will increase to over USD 1 trillion in 2012. Voice revenues will continue to make up the lion’s share of total revenues, but will see slowing growth, and even a decline from 2010 onwards. With regulators worldwide looking to promote competition, forcing operators to push down voice tariffs, Informa Telecoms & Media expects voice revenues to peak as soon as 2009 in Western Europe, and even by end-2008 in North America. In more developing markets such as the Middle East and Asia Pacific, voice revenues will not peak until 2011, and 2012 in Latin America and the Caribbean.
Operators globally will be challenged to generate sustainable revenues as average revenue per user (ARPU) continues to drop. To keep annual revenues on the up, operators will need to promote usage of data services. Annual data revenues, unlike voice revenues, will go from strength to strength, and will more than double from USD 148 billion in 2007 to USD 347 billion in 2013. As a result, the proportion of total revenues generated by data services will increase from less than a fifth (19.2%) in 2007 to over a third (33.7%) at the end of the forecast period.
With voice revenue streams diminishing, industry players will encourage data spend among subscribers by innovating in non-voice services and differentiating their data service offerings from those of their competitors. While 2G will remain the dominant technology generation by subscription numbers until 2013, its market share will fall from over two thirds (66.9%) in 2007 to less than one third (32.7%) in 2013, as 3G+ technologies continue to gain ground. 3.5G technologies accounted for just 1.2% of total subscriptions in 2007, but will represent nearly a quarter (22.9%) of the global subscription base by 2013 and exceed the number of 3G subscriptions.
China ready to go 3G finally !
China's government has finally issued the 3G network licenses after years of waiting. The announcement is excepted to trigger hot competition for among the network equipment companies. Chinese carriers are expected to spend 280 billion yuan on base stations, switching gear, transmission networks and other infrastructure.
The government will issue licenses for three different 3G standards: WCDMA, CDMA200 and a homegrown Chinese standard, TD-SCDMA. They all fulfill the ITU requirements for 3G standards. By developing its own standard, Chinese telecommunications companies will be able to reduce high royalty and patent payments for the use of foreign technologies. The announcement did not say which companies would receive licenses. But earlier it has been reported that China Mobile Ltd., the dominant carrier, would be assigned the TD-SCDMA standard. The WCDMA will go to China Unicom Ltd. and the TD-SCDMA to China Telecom Ltd.
Beijing repeatedly postponed issuing licenses while it tried to develop its own standard to compete with the global systems. At the same time the operators have been setting up large test networks for at least three years.
The issuance of licenses means some of the world’s biggest telecommunications companies could profit from huge spending on network and mobile phone upgrades, including phone towers and switches. China now has more than 600 million mobile subscribers, and there is fierce competition among international companies to capture market share.
By some estimates, China could have 150 million 3G cellphone subscribers by 2010.
The government will issue licenses for three different 3G standards: WCDMA, CDMA200 and a homegrown Chinese standard, TD-SCDMA. They all fulfill the ITU requirements for 3G standards. By developing its own standard, Chinese telecommunications companies will be able to reduce high royalty and patent payments for the use of foreign technologies. The announcement did not say which companies would receive licenses. But earlier it has been reported that China Mobile Ltd., the dominant carrier, would be assigned the TD-SCDMA standard. The WCDMA will go to China Unicom Ltd. and the TD-SCDMA to China Telecom Ltd.
Beijing repeatedly postponed issuing licenses while it tried to develop its own standard to compete with the global systems. At the same time the operators have been setting up large test networks for at least three years.
The issuance of licenses means some of the world’s biggest telecommunications companies could profit from huge spending on network and mobile phone upgrades, including phone towers and switches. China now has more than 600 million mobile subscribers, and there is fierce competition among international companies to capture market share.
By some estimates, China could have 150 million 3G cellphone subscribers by 2010.
Subscribe to:
Posts (Atom)