BSNL & MTNL delay number portability in India

MNP unlikely by April

Bhaskar

What delays mobile number portability (MNP) in India? It is clearly seen that majority of private operators are ready with the implementation of the MNP in India, apart from the government PSUs --- Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL). This points fingers towards these two telcos for the delay.

A close source in the Ministry of Communications and IT has informed us that the both the PSUs (BSNL & MTNL) have been lobbying strongly against implementation of number portability in India. He said that both the PSUs foresee huge churn from their network once MNP is launched. “A large number of subscribers in the PSU network have been logged on to the network only to retain the number. Once MNP is implemented both PSUs are likely to feel the heat of subscriber churn,” the source informed.

This has already delayed the implementation of MNP in India by three months. However, this is unlikely that the MNP would be launched by April 2010.

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Three buyers in talks to buy Aircel’s 17,000 towers

Sources say Tata Quippo and GTL Infrastructure in talks to buy Aircel towers

Bhaskar Hazarika

Telecom operator Aircel is in talks with three potential buyers to sell its 17,000 telecom towers. Chief operating officer of Aircel, Gurdeep Singh said the company plans to conclude the deal in a month or two.

“We are in the final stages of negotiation with the three potential buyers to sell the towers. We have not yet reached at the conclusion but are likely to finalise it,” Singh said.

However, Singh declined to reveal the names of the companies. Of the total 38,000 towers, Aircel owns around 17,000 towers. According to industry insiders, Tata Quippo and GTL Infrastructure are the two main players in the fray.

Malaysia’s mobile operator Maxis Communications holds 74 per cent in Aircel.

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Quick Preview: Tariff war scars to show in top lines of telecom firms Q3

Strong traffic growth may help companies post moderate growth

Bhaskar Hazarika & Sanjeev Sharma

Incumbent telecom companies are likely to witness moderate growth in revenues supported by strong traffic in the third quarter. Analysts have forecast a trend reversal in minutes of usage for incumbent operators while a slight appreciation in rupee will support their performance at the PAT (profit after tax) level.

The Citigroup report said, "Bharti and Rcom should benefit from a slightly appreciating rupee. In Rcom's case, depreciation charges will be higher quarter-onquarter as GSM capex gets capitalised and the second quarter had the adjustment of depreciation change."

With the entry of new players into the telecom space, the industry saw fragmentation in minutes of usage of incumbent operators. More telecom players in each circle and introduction of one-paise per-second billing have resulted in stiff competition, putting lot of pressure on margins.

"We forecast wireless revenues for GSM incumbents (Bharti and Idea) to grow 1 per cent to 3 per cent quarter-on-quarter aided by strong traffic growth. The encouraging traffic trend is also likely to limit EBITDA margin pressures, which will mean the overall EBITDA will remain flat," said the report. The report forecasts a drop in estimated revenue per minute for pure GSM operators. "The decline for Idea could be more compared with Bharti given aggressive tariff cuts, especially in new circles.

Rcom's revenue per minute decline is also likely to get impacted due to tariff cuts announced at the beginning of the quarter," the report stated. KPMG executive director Jaydeep Ghosh said the payper-use tariff is likely to have an impact on the top line for incumbent operators in the third quarter. He said competitive packages offered by the telcos are a matter of concern. "We see a healthy trend in the minutes of usage. However, for new operators we see a challenge in the uptake of subscribers.

For incumbents, there will be a challenge in maintaining the revenue and top line," Ghosh said.

An Angel Securities report says, "Bharti Airtel, Rcom and Idea Cellular are likely report subdued top line growth to the tune of 3 per cent year-on-year and 1.4 per cent quarter-onquarter during the third quarter. We expect Bharti Airtel to report 3.4 per cent YoY in net revenues. Rcom is expected to clock 0.5 per cent YoY de-growth in net revenues.

© Financial Chronicle

NY Special: What if India leapfrogs to 4G?

Bhaskar Hazarika

New Delhi: India has already missed the bus to launch third-generation (3G) mobile services in the country. But this could be a blessing in disguise for the mobile operators if India leapfrogs to fourth-generation (4G). According to industry experts, Indian operators can move forward to 4G without rolling out 3G services. This could be another instance when India’s neighbour Pakistan is planning to leapfrog to 4G services.

Globally number of countries is testing 4G on the network after implementing 3G on the network. However, for India we are yet to log on to the third-generation services. Leapfrogging to 4G would prove to be a technology advantage for operators, since the 4G technology is 10 times spectral efficient compared to 3G. The 3G frequency bands identified by the ministry of communications and IT are compatible to roll out 4G services.

Joint secretary, department of telecom (DoT), JS Deepak said, “4G frequency bands or Long Term Evolution (LTE) is under consideration with DoT and Wireless Planning and Coordination (WPC). The ministry is carrying out a study on the 700 MHz frequency band if it could be used for WiMax or fourth generation (4G) services.” It should be noted that the government has taken a ‘technology neutral stand’ on the spectrum to be allocated for 3G services. This could be the first initiative from the government to open a window towards the 4G space.

Long Term Evolution (LTE) version 10, which is considered to be 4G, is being designed and will be available by the end of 2010. The present day LTE under implementation is considered as 3.9G. Since the spectrum for 3G will be available for private telecom operators by August 2010, it would be the right move for India to go for 4G, as the equipments for 4G will be available by the end of 2010. Union minister for communications and IT, Andimuthu Raja clearly stated, “Allotment of spectrum to maintain level playing field will be allotted to the successful bidders by August 2010.”

According to telecom expert and former advisor of Telecom Regulatory Authority of India (TRAI), Satyen N Gupta India should leapfrog to 4G and skip 3G, as there has been delay in the auction of spectrum. Gupta said that time is ripe for India to directly move to 4G. “Government and the regulator should be technologically agnostic while allocating spectrum. There should be no mandate that the proposed 3G spectrum should be used only to roll out 3G services. The operators should be given freedom to offer either 3G or 4G services,” Gupta said.

He said that the existing 3G frequency bands, which the government is planning to auction is compatible to offer 4G services. All the 3G frequency bands, which are under International Mobile Telecommunications (IMT), can be used for 4G. The Indian government has identified frequency bands in the 1.9 GHz to 2.1 GHz for auction.

Chief corporate affairs officer, Idea Cellular, Rajat Mukarji said that moving to 4G is a desirable direction… Yes, 3G can be leapfrogged. “We have been talking about 3G for more than 3 years and may be it has lost its meaning. Moving to 4G is a logical direction. We talk about mobile broadband but we should know that it is critical for the country. From the existing 2.5G to 4G is a quantum jump, but on thing that should be noted that it will be expensive to roll out 3G services at this point,” he added.

According to ABI research, the total number of 4G subscribers worldwide, including both LTE and WiMAX, is expected to exceed 90 million in 2013.

What is 4G?

4G technology is sometimes referred as ‘MAGIC,’ --- Mobile multimedia, Anytime-anywhere, Global mobility support, Integrated wireless and Customized personal service.

4G has three major characteristics: The download speed is 100 megabytes per second; It is based on internet protocol technology; Ubiquity as it is interoperable with the lower generation technologies. The distinctive quality of 4G networks is likely to use a combination of WiMAX and WiFi. The International Telecommunications Union (ITU) and The Institute of Electrical and Electronics Engineers (IEEE) have identified that 4G will have data download speed of 100-mega bit per second and it is completely based on IP technology.

© Financial Chronicle

Unbranded Chinese handset may be wiped out

30 new handset makers beeline in to India

New Delhi, Dec 27 2009

Bhaskar Hazarika

Unbranded Chinese handset likely to face death with the Indian mobile market flooded with more than 30 new handset makers. With 506 million subscribers in the country, the market is attracting entry of new players in the segment. In the present financial year, the market saw the entry of 25 new players.

The Indian handset industry shipped around 130 million units in 2009 and the numbers are likely to escalate to 150 million in 2010. According to industry estimates, the mobile handset market is pegged at Rs 35,000 crore in 2010.

Unlike the dominant handset makers such as Nokia, Samsung, Sony Ericsson and LG, the segment is witnessing entry of new handset brands, which are available at much cheaper costs with added features.

President of Indian Cellular Association, Pankaj Mohindroo said the growth in the mobile subscriber base has attracted the entry of new players in to the market. “There is a lot of space for entry of new players, which will ensure fair competition in it. Compared with the past couple of years the prices of handsets have come down reasonably. The average price of a handset has come down to Rs 2,300 from Rs 5,500 before,” he said.

Mohindroo said that the entry of affordable handsets in the market will hurt the grey market, which is flooded with unbranded Chinese brands. He said that availability of legal IMEI number on these brands is likely to have an impact on the unbranded handsets.

The new entrants into this space include Micromax, Lava Mobiles, Karbonn, Mobell, Videocon, Movil and also some known brands such as Usha, Salora, Onida and Orpat. According to market estimates, the new players have managed to attain 15 per cent market share.

Shashin Devsare, executive director of Jaina Group of Karbonn Mobiles, said, “We are competing in the GSM space, which is 8.5 to 10 million units per month. Affordable multimedia solution and features for subscribers is our business model. We are primarily targeting the tier II and III towns, where we see the next phase of growth.”

TV maker Salora has tied up with a Singapore-based mobile phone manufacturer, Mobell, to market its handsets in the country. Vice chairman and managing director of Salora, Gopal Jiwarajka, is of the view that the handset market will be robust for the next five to 10 years. “We are positioning our product for entry level and the replacement market, targeting the new subscriber base, who is a first time user. Usually the lifecycle of a handset is estimated to be around 18 months and there is a huge percentage of subscribers in the handset replacement category,” he added.

Managing director of LG Electronics, Moon B Shin, said there is space for new layers in the handset space. “The market is not saturated in this space. We have 6 per cent market share and are targeting 10 per cent next year. The market will witness entry of players and the ones that meet customer requirements will stand the competition,” he said.

© Financial Chronicle

Stay on 10-digit mobile number, 'ENUM' the solution

E-numbering can help avoid 11-digit regime

Bhaskar Hazarika

New Delhi, December 23: India can adopt telephone number mapping to avoid migrating from 10-digit mobile number to an 11-digit number. The ever-increasing number of fresh subscribers every month has exhausted the allotment of new serial mobile numbers available with the department of telecom (DoT), forcing the industry to seek migration to the 11-digit solution.

The national numbering plan 2003 was formulated to meet the growing mobile subscriber base in the country. The 10-digit numbering pattern was projected to meet the industry growth figures for the next 50 years. However, the 10-digit number series has already got exhausted in six years.

The ENUM or electronic numbering is a technology adopted by some of the mobile-rich countries to meet the growing requirement of the mobile industry. The ENUM technology is being adopted by Malaysia and the UK to meet the increasing number of telecom subscribers.

Telephone number mapping is the process through which the telephone network (public-switched telephone network) is unified with the Internet address using the Internet protocol (IP). This technology will be similar to the model available in Internet connectivity whereby each Internet connection has a unique IP address.

According to telecom expert Satyen N Gupta, “The problem of a single universal personal identifier for multiple communication services can be resolved using this technology. Once adopted, the numbering pattern will not require migrating from 10 to 11 digit or more despite surge in the mobile subscriber base.”

A senior DoT official told Financial Chronicle, “So-me countries where there is unprecedented growth in mobile (subscribers) are adopting new technology to meet the number crunch. We are aware of ENUM or telephone number mapping, but have not taken up the project.”At present, technology companies such as Telcordia Technologies and Neustar Inc are offering the number mapping.

When contacted, secretary general of Association of Unified Service Providers of India (Auspi), S C Khanna said, “There are technologies that could be adopted to meet the growing demand but migration to 11 digit is an easier route. With more than 8 to 9 operators in a single circle and a couple of new operators likely to launch services, we need to meet the crunch.”

© Financial Chronicle

Multiple SIM usage to impact top line margin for telcos

Bhaskar Hazarika & Sanjeev Sharma

New Delhi, December 20: The increasing usage of multiple SIMs will have an adverse impact on the revenue of operators in the long-term. With dual and three SIM phenomenon there will be a fragmentation in the minutes of usage on the operators.

According to a Macquarie report, “Subscribers take-up activity is becoming increasingly irrelevant, with dual and three SIM phenomenon increasingly visible. Minutes of usage fragmentation across multiple SIMs from different operators will pressure telcos top line.”

According to data from the Cellular Operators Association of India, GSM operators (excluding GSM SIMs for the two large CDMA operators Reliance Communications and Tata DoCoMo) added 11.1 million SIMs in November. In October the GSM operators added 10.3 million SIMs, 8.6 million in September, 9.3 million in August.

President of Indian Cellular Association, Pankaj Mohindroo said that there has been significant increase in the number of multiple SIM usage among the subscribers. “According to industry estimates the dual SIM card handset users in the market is around 25 million. If you take in to account the Delhi circle there are 25 million subscribers compared to the total population of 17 million. This clearly states that the number of SIM cards has surpassed the total population,” he said.

Chief corporate affair officer of Idea Cellular, Rajat Mukherji told Financial Chronicle that multiple SIM usage is witnessed predominantly in the circles where the tele-density is relatively higher. “The premium markets are witnessing the growth of multiple SIMs. However, there is a clear distinction between the voice and the non-voice segment. When an individual uses two SIM cards, he makes clear distinction in his usage pattern --- one for voice usage and the other for data, vas services,” he said.

Mukherji added that a lot of BlackBerry subscribers have their second phone, which is used primarily for calling. “Since the tariffs are already low for almost all the operators, we do not see any tariff arbitrage in this case. This is an industry wide phenomenon, which all the operators are likely to face,” he added.

Emails sent across to Vodafone, Bharti Airtel and Aircel did not elicit any response.

With cloud of uncertainty hovering over the mobile number portability (MNP), the consumer is left with no other option than to get an additional SIM card for his use. It may be noted that the existing SIM card continues to be under usage, only to retain the number. Mobile number portability was earlier slated to be launched on December 31, but has been deferred by three months. The operators have expressed their inability to launch the service stating that the implementation of the service is not complete.

© Financial Chronicle