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)

Spectrum Status by Circles & Operators

I thought this was an interesting data published in Business standard - http://epaper.business-standard.com/bsepaper/svww_index1.php

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)

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.

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.

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%.

SPECulation on spectrum TRUMped

As per Economic times, the indian government has today given in-principle approval for allocation of spectrum to GSM operators who have been waiting for frequency since 2006, CDMA players entering the GSM segment and to new aspirants in that order.
With this, Indian government has met GSM operators' demand that they should be given priority ahead of others in spectrum allocation. Among the beneficiaries, existing operators include Aircel, Vodafone-Essar and Idea cellular, while Reliance Communications, HFCL and Shyam Telecom would benefit under the dual technology clause. The process would begin by issuing Letters of Intent (LoIs) to all the eligible players. As regards new aspirants, according to an official statement, the government would issue LoIs to all the eligible applicants, who have applied before September 25, 2007, on a first-come-first serve basis.

The news was expected as this was an option that will ensure regular incremental income to Government of India (GOI). The government's revenue from spectrum fee levied from mobile operators is poised to more than double to Rs 7,000 crore in 2008-09, without really impacting the tariffs. The Department of Telecom (DoT) is reported to be working on enhancing spectrum charges, collected based on annual revenue, to the government and its implications on the tariff of telecom services. The idea for charging spectrum fee in this way is to ensure that the government gets incremental revenue over the years based on growth of the sector and keeps telecom services cheap as upfront auction charge would lead to higher initial investment which would be reflected in higher tariffs. In 2006-07, the government received about Rs 1,956 crore from mobile operators as spectrum charges and at current rate it is likely to increase to Rs 3,000 crore in 2007-08. However, if spectrum charges as percentage of gross revenue are enhanced by about 75 per cent, the government will get Rs 7,000 crore in 2008-09 and will grow every year without any impact on tariffs.

Currently the mobile operators pay 2 per cent of Adjusted Gross Revenue (AGR) as spectrum charges for 4.4 MHz and 3 per cent for 6.2 MHz and this goes up to five per cent for 12 MHz of spectrum. DoT is of the view that these charges can be revised and that too without any impact on the tariffs. On the other hand idea of auctioning of spectrum may lead to legal implication as it would be a major departure from the existing policy. Telecom regulator TRAI, in its recent recommendations, has also not suggested auction of 2G spectrum.

Personally I feel that auctioning of spectrum would have resulted in impractical bid prices (as happened when DoT called for licence fee bids when mobile services started in India). Those who are new entrants will pay more because by grapping the spectrum at exorbitant rates they could have blocked the expansion plans of existing players (a move that might have given serious blow to telecom expansion in India). The existing players would forcefully have bid exorbitantly knowing their future depends only on the spectrum. As a result, the overall telecom growth in India would have been jeopardised.

Indian GSM market - Customers added by various telcos in last six months

The customers added by various telcos in the Indian GSM market in last six months are shown below -

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

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. "

FIPB clears Hutch deal

India's Foreign Investment Promotion Board (FIPB) finally gave its blessing to Hutchison Telecommunications International Limited's (HTIL) $11.1 billion sale of its 52-percent controlling stake in Indian telco Hutchison Essar to Vodafone.
The group, Telecom Watchdog, charged that foreign ownership of Hutch-Essar actually is 89.03 percent, exceeding the 74-percent cap set by Indian law (TelecomWeb news break, March 9).
Still on the table, though, is a possible $1 million capital-gains tax the Indian government has been threatening to levy on HTIL.
Reports also indicate the drama surrounding the sale of control of HTIL may not be over, and that Vodafone has made another offer to buy Essar's 33-percent stake in the company on the same terms as it paid for the HTIL stake. Just how that would work, given India's foreign-ownership rules, remains to be seen.

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.

Use of telecom in South Asia by Bottom of Pyramid - research report

A study of teleuse at the bottom of the pyramid were officially released in Singapore at a media workshop on 28 February 2007. The research findings were presented to and then discussed with the journalists by Dr. Harsha de Silva and Ayesha Zainudeen of LIRNEasia and Dr. Lorraine Carlos Salazar of ISEAS, Singapore. followed by discussion with the journalists.

The presentations can be downloaded below-

Research Methodology and Key Findings Harsha de Silva

Cost Cutting Strategies at the Bottom of the Pyramid: The SMS Story, Missed Calls, and others Lorraine Carlos Salazar

The next billion customers Ayesha Zainudeen