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. 

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)

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.

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

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


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


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


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

GSM players in India add 5.4 m subscribers in June 07

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



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



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

Hutch Essar may soon be no. 2 GSM operator - ready to over take BSNL

In April, the cellular subscriber base of Bharti touched 3.88 crore with additions of 17.51 lakh users, followed by BSNL at 2.77 crore with a market share of 22.10 per cent and additions of 3.26 lakh subscribers.
Hutch-Essar has 2.77 crore subscribers, taking its market share to 22.06 per cent and Idea with a market share of 11.60 per cent has 1.45 crore subscribers in April.
Hutch-Essar added 12.61 lakh subscribers in the month of April(against 3.26 of BSNL), while Idea added 5.52 lakh mobile users in the same month. If trend continues , by May end Hutch will over take BSNL as no 2 GSM operator.

Sustaining its aggressive growth in subscriber additions, the GSM-based cellular industry has added over 41 lakh subscribers in April with Bharti Airtel capturing 30.97 per cent of the market share.
With this, the all-India GSM subscriber base has touched 12.55 crore at the end of April 2007 compared to 12.14 crore at the end of March 2007, reflecting a growth rate of 3.40 per cent, the Cellular Operators Association of India (COAI) said in a statement.
CDMA mobile figures are yet to be out.
MTNL's GSM subscriber base in Delhi and Mumbai touched 24.83 lakh, while Spice Telecom has over 28 lakh subscribers.
Aircel's user base in April stood at 59.27 lakh, followed by Reliance Telecom's 43.47 lakh subscribers.

BSNL & Reliance Industries Ltd (RIL) set to enter into telecom solution deal

Mukesh Ambani’s Reliance Industries Ltd (RIL) is set to sign a five-year communications solutions deal with Bharat Sanchar Nigam Ltd (BSNL) estimated to be worth Rs 500 crore - reported Economic times. As per the deal, BSNL will link all undertakings of the group during this period, connecting 2,500 petrol pumps, about 15,000 retail outlets, 14 manufacturing units, all its upcoming SEZs and also provide global connectivity to RIL, sources close to the development told ET. The deal envisages that BSNL provide mobile, basic, broadband services, leased lines, virtual private network (VPN), multi-protocol label switching (MPLS) and enterprise solutions to RIL. BSNL will also provide the bandwidth for RIL’s captive network, which interconnects all its outlets and offices. Reports also indicated that the contract would involve providing about 60,000 mobile connections to RIL employees, which could be scaled up later.
The contract with RIL, when signed, would be similar to its agreement with ICICI. BSNL interconnects and provides telecom solutions to all ICICI outlets (including ATMs) in the country, and industry sources estimate the value of this contract to be Rs 100 crore per year. State-owned MTNL, which offers telecom services in Delhi and Mumbai, also stands to gain from BSNL’s contract with RIL. This is because, MTNL will provide all communication solutions to RIL in the two metros, where BSNL is not present.

Earlier, this year, RIL had joined hands with the Bharti group to source mobile and enterprise communication services, which includes mobile, broadband and leased line services, for its retail venture. However, the catch here is that Bharti also plans to use these solutions for captive use for its own retail venture with Wal-Mart. At the same time, Reliance is also planning a pan-India WiMax network for back-end communication needs of its SEZs, which may be extended to meet needs of its retail venture in the long run. Reliance plans to invest about $750 million (Rs 3,400 crore) to obtain spectrum and lay out the network.

BSNL should share interconnection port charges - Argues COAI

the Cellular Operators Association of India has submitted before tribunal TDSAT, which is hearing a matter on call congestion that "Network congestion is due to lack of Points of Interconnection (point where different networks meet) provided by BSNL... We have no option and the fault is with BSNL,"
Private cellular operators, nursing a grudge against regulator TRAI for making them pay for interconnection with BSNL, gave vent to their feelings by blaming the authority for poor quality of mobile services.
COAI further blamed TRAI for formulating wrong policies on the interconnection front, saying the regulator had put the onus on private operators to get interconnection with BSNL and also bear the entire cost of the exercise.
They demanded that BSNL also share the cost of interconnection.
The operators sought to highlight contradictory stands taken by TRAI, saying the regulator at one time attributed the poor quality to BSNL's failure to provide interconnection and on the other blamed private operators for lack of efforts to get timely access to BSNL network.
The COAI, in a rejoinder filed through advocate Naveen Chawla to BSNL's reply on the matter, stated that at time of framing of rules, the telecom PSU was only a fixed line operator.
BSNL, which subsequently launched Cellone, started routing all the outgoing and incoming calls traffic through the ports installed by them. Hence, the state-run company must share cost of interconnection, COAI argued.

BSNL ready to issue orders for its 45.5 million lines GSM tender

As reported by Economic times - "State run BSNL is likely to place a Rs 20,000 crore mobile telephony order with the two winners of the contract - Ericsson and Nokia by second week of May to increase the capacity of its network.

When issued, this would be the world's largest ever single tender for 45.5 million lines of GSM telephones. - By December, the first phase of BSNL's GSM expansion is expected to be in place. The first phase is for 17.5 million lines while the second and the third phases are for 14 million lines each.
With this, the pressure on BSNL's mobile service will ease off and quality of service will improve.
In March, the PSU topped the charts in subscriber addition with 1.98 million GSM subscribers, increasing its total user base to 2.74 crore.
The order got delayed by six months since as one of the disqualified bidders - Motorola went to court challenging the tendering process. The process could start only after Motorola withdrew the case.
Telecom Minister Dayanidhi Maran has announced a 500 million telephone target by 2010 and also on an average 3 million GSM additions per month from 2008-2010.
Any further delay in the project could not only result in BSNL losing its third position in terms of mobile subscribers, but also derail the Minister's vision.
As per the terms of the tender, Ericsson, which had emerged as the lowest bidder, will get 60 per cent of the 45.5 million lines while the second lowest bidder Nokia would get the remaining 40 per cent.
BSNL has already stated that, if necessary, it could scale-up the tender size by 50 per cent and possibly even 100 per cent after the initial orders have been placed.
The vendors will be allowed to import only for the first phase. From the second phase onward, the specified core components of the network will have to be manufactured in India. Also, the minimum value addition of indigenization of such core components must be 30 per cent. "

BSNL loosing fast on 7000 Cr PCO market

As per an article in economic times - "Years after acting as the original harbingers of the telecom revolution, the yellow and black brand ambassadors of BSNL and MTNL have started losing out to the fancier red and blue phone booths of private operators. The change has been so dramatic that with private players collectively commanding 56% share of the Rs 7,000-crore PCO market. PCO owners have been moving away from the state-owned telecom companies for a number of reasons such as inadequate marketing, legacy networks and less enticing commissions. According to a survey conducted by the telecom regulator Trai, BSNL saw a reduction of 10,518 PCOs during the quarter ended December 31, 2006, while the number for MTNL was 1,543. At the same time private operators are rapidly adding to their numbers with Tata TeleServices (TTSL) adding 81,239 and Reliance Communications adding 1,20,855 PCOs during the same period. Other private operators like Bharti Airtel, HFCL and Shyam Telelink have also been growing their PCO business in recent times. What makes the slump even more painful for government companies is the fact that this is both an extremely fast growing and lucrative segment in the telecom space. The October-December 2006 quarter saw a total addition of 1.83 lakh new PCOs, taking the total number of PCOs in the country to over 53 lakh. But more than volume growth it is also a high-value business. TTSL business access unit head Vikas Shah points out that the average revenue from a PCO is almost four times the blended ARPU (average revenue per user) from a mobile subscriber. The Tatas-owned telco plans to triple the revenues from the PCO business. The segment contributed around 25% to its revenues in FY07 and is expected to go up to 30% this fiscal. "