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

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

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

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

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

Etisalat yet to get an IDEA about Indian Telecom Market

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

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

Will MNP implementation deadline in India be deferred again

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

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

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

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

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

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

The FCC is still studying possible uses of the spectrum.

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

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

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

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

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

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

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

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

Zain Telecom emerges as clear winner

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

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

GSM subscriber figures for Feb 2010 in India

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

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

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

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

China Mobile sees reversal in ARPU trends!

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

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

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

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

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

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

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