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.

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.

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

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

India's Reliance communications planning to expand 30 million lines of CDMA ?

As per Local newspaper, DNA - India's Reliance Communications is reported to be considering a US$1.5 billion expansion of its CDMA network to add capacity for some 30 million additional lines. Reliance has not commented on the issue.

The company is also understood to have delayed a huge US$6 billion order for GSM network infrastructure pending clarification of spectrum allocation issues. The company has applied for licenses to cover the whole country but is waiting for policy to be announced later this year. The Department of Defence is due to release a large chunk of radio spectrum in July which could be used for GSM services.

Source - http://www.cellular-news.com/

Doordarshan will be available on Nokia handsets in India

Public broadcaster in India Prasar Bharti and world's largest mobile phone maker Nokia are all set to start a mobile TV pilot project in Indian metro cities, which will enable cellular phone users watch Doordarshan channels on their handsets. Nokia India has entered into a pilot tender with DD to launch the service, which would make DD channels available on select high-end Nokia handset models. During the pilot phase, Doordarshan will test the reception quality of the broadcast coverage. Attendant things like a revenue structure or advertising opportunities will come later.

Nokia's N92 series of handsets are capable of catching television signals. Nokia officials said it is for Doordarshan, which has put up a mobile television platform to set a time frame about commercial launch of their TV on Mobile. The company has N92- the first DVBH (digital video broadcast handheld) device. Adoption of mobile TV will ultimately give way to a more personal and private TV experience than that of traditional broadcast TV, with big implications for users, content providers and advertisers.

CAOI demands 50% cut in ADC

Cellular operators have urged the Telecom Regulatory Authority of India to reduce Access Deficit Charge by 50% to Rs 1,600 crore for 2007-08 . In their communication to Trai, COAI, the body representing all GSM operators, has demanded that the incidence of ADC should be completely removed from the domestic consumers, and for 2007-08 , this levy be recovered only from incoming international calls.

Currently ADC (the levy paid by all telecom operators to state-owned BSNL to sustain its rural operations) is charged on all STD, ISD and also on incoming international calls. Operators pay 1.5% of the annual aggregate gross revenues (AGR), Rs 1.60 per minute for all incoming international calls to India and Rs 0.80 per minute for every outgoing ISD call, towards ADC.

Justifying the demand, COAI has represented that as per Trai’s estimates, India will receive 11,376 million minutes of incoming international calls 2006-07 which was a growth of 47% over the previous year. If the same growth rate was maintained, incoming ILD traffic for 2007-08 will be at least around 16,745 million minutes. On this basis, CAOI has projected that an ADC of Rs 1 per minute on incoming ILD calls will be sufficient to meet the ADC requirements for 2007-08 .

Reliance & InterCall enters into tie-up to provide conferencing services

Reliance Communications has entered into an exclusive partnership with Chicago-based InterCall, the world's largest conferencing services provider.
As a part of this strategic tie-up, Reliance Communications has rolled out an unique pan-India integrated audio conferencing service both to and from India to its customers.
Reliance InterCall conferencing transforms a phone connection into a virtual conference room, an online auditorium, an electronic brainstorming session and an audit summit depending upon the requirements, the company said in a statement here on Tuesday.
Presently, over 30,000 organisations and 2,00,000 individual conference leaders around the world make use of InterCall's state-of-the-art conferencing facilities and these will now be available in India both for 'anytime meeting' and for reservation-based' services.

BSNL challenges TRAI's decision to cut port charges

BSNL on 8th march challenged the telecom regulator TRAI's decision to cut port charges in the tribunal TDSAT, saying the reduction in fees will lead to a loss of about Rs 100 crore every year to the company. Telecom Disputes Settlement and Appellate Tribunal accepted the petition and issued a notice to TRAI, directing it to file a reply in two weeks.

The Telecom Regulatory Authority of India by its Telecommunication Interconnection (Port Charges) Amendment Regulation on February 2, 2007 that reduced port connectivity charges by 23-29 per cent.

BSNL's major argument in its petition is - "The TRAI vide its impugned regulation is attempting to modify and substitute its regulation over the interconnect agreements entered into between BSNL and private operators so as to effect an impermissible gain for private operators and loss to BSNL." BSNL also contended that while deciding the port charges, TRAI has not taken into consideration the cost of main equipments installed by it to provide interconnection.

Tata Teleservice plans to invest Rs 3500 Cr in 2007-08

Tata Teleservices (TTSL) is planning to invest Rs 3,500 crore in the next fiscal for expanding services across the country. TTSL has applied for licences in Jammu and Kashmir, Assam and the rest of the North East. Elaborating on the telco’s expansion plans, CEO Mr Darryl Green has said, “We will add more cell cites and reach out to another 1,000 towns and if we get the spectrum, we will roll out 3G services as well.”
The company has been adding over half a million users every month. Along with subsidiary Tata Teleservices Maharashtra, TTSL has nearly 16 million users in India.

BSNL added over 10 lakh GSM subscribers in Feb 2007

In a statement released by Cellular Operators Association of India (COAI), the GSM-based cellular industry has added about 50 lakh subscribers in February. With this, the all-India GSM subscriber base has touched 11.53 crore at the end of February 2007 compared to 11.05 crore as on end of January 2007 with Bharti Airtel .

The Indian GSM industry is a key contributor in the 200 million milestone reached by the telecom sector in India as a whole in February.
In February, the cellular subscriber base of Bharti touched 3.54 crore with additions of over 17 lakh users, capturing 30.74 per cent of the market share. BSNL at 2.54 crore with a marketshare of 22.07 per cent and additions of over 10 lakh subscribers.
Hutch-Essar added 9.28 lakh subscribers and now has 2.53 crore subscribers, taking its market share to 21.98 per cent.
Idea added 5.6 lakh mobile users with a market share of 11.83 per cent has 1.36 crore subscribers in February.
MTNL's GSM subscriber base in Delhi and Mumbai touched 25.78 lakh, while Spice Telecom has also over 25 lakh subscribers.
Aircel's user base in February stood at 50.94 lakh, followed by Reliance Telecom's 41.1 lakh subscribers.

Indian Telcos planning to spin off mobile tower business into seperate units

Tata Teleservices is said to be in talks with several firms about spining off its mobile phone towers into a separate unit, part or all of which could then be sold. As per media guesses (reported by Economic Times), Singapore state investor Temasek Holdings and wireless tower operator Crown Castle International are in talks to buy close to 15 per cent in the mobile phone towers business of Tata Teleservices Ltd.
The industry analysts valued the tower business at up to $1 billion. Tata Teleservices has more than 5,000 mobile phone towers. Tata Teleservices, along with subsidiary Tata Teleservices (Maharashtra) Ltd, has more than 15.5 million subscribers in India.

Reliance Communications Ltd had also said it would spin off its towers business into a separate unit, and leading mobile services provider Bharti Airtel Ltd has said it would do the same. Newspapers have indicated American Tower Corp, as well as private equity firms including Blackstone, Carlyle and Temasek were interested in Reliance Communications' towers unit.

The 'Idea' of investing $2bn

Idea Celluar, the Aditya Birla Group owned telecom company, currently operates in 11 circles out of 13 for which it has been issued license. It has applied for license in nine new circles. In the past six months the company has launched operations in Himachal Pradesh, Rajasthan and Eastern Uttar Pradesh. It will launch operations in Mumbai and Bihar this year.

As per a press release, Idea is planning tol invest $2 billion in the next two years to compete in the booming Indian telecom market. Aditya Birla Group and Idea Cellular Chairman Kumar Mangalam Birla meanwhile ruled out any tie-up to compete with rivals like Vodafone.

After Hutch, FIPB eyeing at Aircel ?

As per a latest news in Economic Times, after Hutch the shareholding structure of Aircel Cellular can also come under the lens of the Foreign Investment Promotion Board (FIPB). Like Hutch, Maxis Communications too consolidates nearly 100% of its stake in Aircel in its overseas accounts though its equity stake in the Chennai-based operator stands at just 74%. As per the filing by the company to the Malaysian stock exchange Bursa Malaysia in March 2006 - "With equity interest of 74% in Aircel (comprised 65% direct interest and 9% indirect interest) and 100% subscription of cumulative redeemable non-convertible preference shares in Deccan Digital, this effectively gives the group 99.3% economic returns from the investment in Aircel,” . Maxis had teamed up with the Pratap Reddy family and incorporated a joint venture company, Digital Networks Private Ltd, in India to buy Aircel in 2005-06. Maxis subscribed to the non-convertible preference shares in this company, giving the group nearly 100% economic interest in Aircel. Indian investment rules stipulate that foreign investors can own only up to 74% in an Indian company and that domestic investors should own the remaining. However, in some cases such as Hutch-Essar, the foreign company is also enjoying the economic benefits of the entire 100% raising questions as to whether this violates the investment guidelines. On February 28, the Foreign Investment Promotion Board (FIPB) wrote a letter to Hutchison Essar asking them to name the beneficial owners of the entities controlled by Indians.
Aircel provides cellular services in nine circles and has over 5 million subscribers.

Indian Telecom sector to get a unified tax structure?

Finance Minister P Chidambaram has asked Department of Telecom to commission a study for working out a unified tax structure for the sector. At present, total levies in the telecom sector, including the annual revenue share that the companies pay to the government stand between 28-30 per cent, which operators feel is very high. The annual revenue share ranges between 6-10 per cent of their revenues depending upon the circle where they operate.

GSM modems - $10 billion sale expected by 2012?

The sales of GSM modems is finally picking up. Although shipments of cellular modems in 2006 were slightly below expectations, the momentum is building for this market to reach sales of 68 million units worth nearly $10 billion by 2012, a 47-percent compound annual growth rate.
The growth will come from the proliferation of 3G networks and better cellular broadband pricing.

China Unicom's new strategy - Growth centered around CDMA

China Unicom has sold about 8 million CDMA2000 mobile phones in 2006.
According to the CDMA Development Group (CDG), 70 percent of the CDMA handsets sold in China were priced at less than $129, making them quite affordable and contributing to China Unicom's ending the year with 37 million CDMA2000 subscribers.

In June 2006, South Korea's SK Telecom (SKT) purchased a 6.67-percent stake in China Unicom. The partnership reportedly has strengthened China Unicom's CDMA business by providing additional working capital for advanced mobile handsets, network enhancements and the marketing of value-added services. The increased availability of low-cost handsets and dual-mode (CDMA & GSM) devices, several marketing campaigns and reduced operating costs helped the company attain profitability within the third quarter of 2006. There are as many as 19 dual-mode phones, also known as Worldwind phones, available in China. By the end of 2006, the average selling price for China Unicom's CDMA handset portfolio was less than for its GSM portfolio, which spans from low-cost to high-end dual-mode phones. By the end of 2007, it is expected that sales of low-cost and Worldwind phones in China will hit 5.5 million and 3 million, respectively. China Unicom also introduced a new logo and reorganized its consumer and corporate services branding structure. Its "Rural New Time Space" campaign targeted rural markets by enabling farmers to access agricultural information using SMS or WAP. Plans this year include continued cooperation with CDMA producers to promote performance and price ratios, and to produce more low-cost CDMA handsets set to launch in rural markets.

Remit money to India through mobile

India's Bharti Airtel has joined hands with The GSM Association to launch a pilot programme that will eventually enable over 25 million Indians abroad to remit money to India through their mobile phones. State BAnk of India has piloted a project in a small Himalayan village of Pithoragarh in India with Airtel. The project is seen to have potential of transforming the lives and economies across the globe.

India is the biggest recipient of overseas remittances in the world at US$25 billion, accounting for around 10% of the world market. The remittances market is growing by 20% in India every year. This programme will enable global Indians to easily and securely send remittances to their dependents, many of whom don't have bank accounts. Intent is to enable individuals access to the benefits of a full range of financial services regardless of socio economic level or geographical location using the ubiquity and ease of mobile communications. The programme will complement existing local remittances channels and make transferring money internationally significantly more affordable.

By 2012 operators will be making $67bn of revenues through SMS?

As per a new report from Portio Research - by 2012 global SMS revenues are expected to reach US$67 billion, driven by 3.7 trillion messages. Though
the growth of SMS revenues will not be as aggressive as the growth of SMS volumes due to declining prices,

SMS continues to be a phenomenal success as the cheapest, quickest and easiest to use form of peer-to-peer mobile communication. Markets have continued to grow and greatly exceeded the predictions of similar research carried out in 2005.

By 2011, the report predicts, mobile instant messaging (MIM), especially in markets such as North America, will supplant SMS as the mainstream messaging service as smartphones and wireless Internet proliferate.
Operators, the report suggests, need to strike a balance between SMS and IM pricing in order to prevent the cannibalisation of SMS revenues in the future.

India now the third largest CDMA market in world

Indian wireless customer numbers moved close to 150m by the end of January 2007, an increase of 85% year on year. Customer numbers climbed over 6.6m in January alone with over 213,000 net new connections being made per day during the month.



The total CDMA base which accounted for just over a quarter of the total wireless customer count at the end of January stood at 39m customers.
India is now the third largest CDMA market in the world, having overtaken China towards the end of December 2006.



It is estimated that by the beginning of March the size of the Indian CDMA customer base will exceed that of South Korea, which ended 2006 with 40.2m CDMA customers, moving India into second place behind the United States.


Indian wireless market is also expected to go third in the world overall, ahead of Russia. Russia itself broke the 150m barrier in December, but is growing much slower than India - around 2.05m customers per month on average in 2006, versus 5.55m on the sub-continent



By early 2008 India may reach the second place, overtaking the United States which currently occupies the position.


Source - http://www.cellular-news.com

US to reach 50% broadband penetration by year end

U.S. may finally reach that 50% mark for broadband penetration by the end of the year. High Speed Internet connections grew by 20% last year hitting 47% of all U.S. households.
While it is good news that broadband penetration is becoming a mainstay in the American home, US still lags behind Denmark, the Netherlands, Iceland, Korea, Switzerland, Finland, Norway, Sweden, Canada, the UK and Belgium in per-capita broadband deployment. The U.S. still lags greatly in the number of fiber connections with just over 500,000 while countries like Japan have 6 million or more.