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| Thursday, January 29, 2009 |
| VoIP + Inter Operator NLD + IPv6 - To be Reviewed |
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The Telecom Commission [Upper decision making body of the DoT] which came under criticism from outgoing TRAI Chairman, Mr. Misra has said that they will take up the following recommendations of TRAI for implementation.
- VoIP - VoIP calling within India is currently il-legal. However, ILD VoIP is legal and TRAI has recommended to open the sector internally. If VoIP within India is legalized, then we will be able to terminate our calls from PC on your mobile or land line. With interconnect fee expected to go down, VoIP within India will be much cheaper than current NLD rates of Rs 1 / minute.
- Inter Operator STD / NLD - Currently Indian telecom users don't have a choice on choosing their NLD operator but by default access the service from their service provider. TRAI has recommended that the user be given a choice so that an Airtel subscriber can use a Reliance Calling Card to complete his STD calling
- IPv6 - Indian telecom has been reformed late, a blessing in disguise. With 5.45 mn broadband subscribers and 45 mn active internet users in India, it is still far that India will run out of IPv4 blocks but TRAI wants us to migrate to IPv6 before the last hour
- NIXI - national Internet Exchange of India came into force to route internal traffic efficiently. Since its implementation, TRAI wants DoT to benchmark and measure its effectiveness.
Upon accepting recommendations from TRAI in partial or entirety by the telecom commission, DoT will implement the same. So lets hope VoIP calling becomes legal within India in 2009. Tags: Telecom India, VoIP India, IPv6, Broadband India |
Published on Thursday, January 29, 2009 at 3:27 PM  |
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| Saturday, January 24, 2009 |
| Idea Cellular - Lags GSM Peers - Airtel & Vodafone |
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We attended the conference call of Idea Cellular and here is the highlights of the same.
- Idea, including service areas of Spice (Punjab and Karnataka), added 4.03 million subscribers during the quarter with total subscriber base of 38.01 million at the end of 31st December 2008, reflecting a national market share of 11%.
- On Q-o-Q basis the ARPU has improved by 2% to Rs 266 from Rs 261 and the average realized rate (ARR) per minute increased from Rs 0.62 in Q2 FY09 to Rs 0.64 in Q3 FY09. Far lower than Rs 324 earned by Bharti Airtel.
- The average minutes of use per user has declined from 417 minutes in Q2 FY09 to 410 minutes in Q3 FY09. For Q3 FY09 the revenue from Value Added Services (VAS) stood at 9.5% of the ARPU against 9.8% in Q2 FY09.
- The ARPU of 2 circles of Spice has improved from Rs 259 to Rs 279 sequentially while the average minutes of usage have increased from 434 minutes to 494 minutes sequentially. However, the average realized rate dipped from Rs 0.60 to 0.56 sequentially.
- The company has been allocated Spectrum in telecom service areas of Kolkata, Assam, North-East and Jammu & Kashmir during December 2008 and for West Bengal during January 2009.
- The company will be launching its services in remaining 8 circles by the end of calendar year 2009 and then it would be Pan India player.
- At present Idea is market leader in 23% wireless market and at second or very close to second position in about 50% market.
- Due to transfer of its 11,100 towers to Indus Towers, the EBIDTA margin of the company will be lower by 400-500 bps in FY10 due to higher opex and at PAT level the company's margin will be lower by 200-250 bps due to lower depreciation and interest costs. However, on consolidated basis the impact on PAT would be neutral.
- As on 31st December 2008, the company has about 39,289 BTS sites (21,197 by Dec'07), thus the investment in network has increased by 85% on Y-o-Y basis which will benefit the company in future. Out of 39,289 cites the company has 17830 sites on owned towers and rest 21,459 rented sites (146% higher on Y-o-Y).
- Out of owned sites the company will transfer about 11,100 towers (each tower having one cell site) to Indus Towers w.e.f. 1st January 2009. The book value of these 11,100 towers is about Rs 1450 crore. All towers in Madhya Pradesh, Himachal Pradesh and about 1000 towers in Maharashtra will remain with the company.
- At present the company is carrying about 25% of its traffic on its own network and expects it to improve to 50% by March 2009, which will positively impact the EBIDTA margin.
- The company targets to have 45000-46000 cell sites by March 2009.
- The loss of company at EBIT level for Bihar circle may increase as more sites to roll out. However, in Mumbai the sites roll out will slow down and so the loss at EBIT level will reduce.
- The company estimates that all of its circles including Punjab and Karnataka will be eligible to get reduction in USO fund contribution, when implemented next fiscal.
- As of 31st December 2008 the company has cash and cash equivalents of Rs 8161 crore on consolidated basis and debt of Rs 10778 crore.
- The company estimated capex of Rs 6000 crore for FY10 against Rs 6500 crore in FY09. This capex for FY10 does not include capex for 3G licenses and roll out, but include capex in Punjab and Karnataka circles (acquired through Spice Communication).
Idea Cellular needs some major investments immediately for expansion as new operators and Reliance Mobile have entered the wireless battle. |
| Published on Saturday, January 24, 2009 at 4:26 PM |
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| Tuesday, January 20, 2009 |
| Batelco takes stake in S Tel |
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Batelco, Bahrain's telecom operator has partnered with Millennium Private Equity to pick up 49% stake for $225m in new Indian operator S Tel. The deal values S Tel at $459m, which has license to operate in 6 circles in India. Given that these 6 circles account for 11% of total wireless subscribers in India, the valuation is largely inline with the US$ 1.8-2 billion Telenor paid for Unitech and Etisalat paid for Swan.
S Tel has licenses in 6 circles in India, which include Bihar, Orissa, Jammu & Kashmir, Himachal Pradesh, the Northeast and Assam. These circles are all "C" category and have significantly lower penetration at 20% compared to total penetration of 31% for total Indian market. As a result, growth rate in these circles could be faster over the coming 5-10 years. |
| Published on Tuesday, January 20, 2009 at 7:03 AM |
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| Wednesday, January 14, 2009 |
| 3G auction - Battleground for DoT + Trai |
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The Department of Telecommunications (DoT) and the telecom regulator TRAI are in confrontation regarding the auction of third generation (3G) spectrum. The DoT has now written a letter to Cabinet stating that Trai was going out of its jurisdiction to make recommendations on 3G spectrum while it was only asked to give its views regarding annual spectrum charges.
DoT seems to be now convincing the Cabinet that despite the fact that TRAI was an independent regulatory body, it was not binding on the government to accept every recommendation of TRAI. The issue at stake currently is number of players to be allowed per circle.
DoT only wants to auction spectrum to five players per circle in the forthcoming auction and save some spectrum for future. TRAI, on the other hand, wants DoT to auction all available spectrum so as to promote greater competition in the segment. A final view on the issue now may be taken in the Cabinet Committee on Economic Affairs meeting. |
| Published on Wednesday, January 14, 2009 at 11:36 AM |
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| Tuesday, January 13, 2009 |
| Airtel eyes 10 mn subscribers in UP |
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Private sector telecommunication services major, Bharti Airtel, aims to boost its subscriber base in Uttar Pradesh and Uttarakhand by adding another three million subscribers by the fiscal end. The company eyes a customer base to 10 million by March 2009 from 7 million at present in the two states.
Bharti Airtel has the second largest subscriber base in UP after Vodafone and has over 10,000 Base Transceiver Stations (BTS) in the two states. Bharti recorded 2.73m net adds for the month - flat MoM and up 24% YoY. Bharti's subscriber base is up 55.3% YoY and 3.3% MoM to 85.6m.
Vodafone Essar added 2.17m subs - up 5.3% MoM and 66.6% YoY driven by better performance in A circles and newly launched C circles. Vodafone's subscriber base is up 52.8% YoY and 3.7% MoM to 60.9m.
Idea Cellular's net adds grew 14.2% MoM and 68.5% YoY to 1.4m driven by higher additions in B and C circles. Idea's subscriber base reached 34.2m, up 62.5% YoY and 4.3% MoM.
BSNL's net adds increased 34.3% MoM and 13.9% YoY to 0.87m. BSNL's subscriber base is up 26.4% YoY and 2.2% MoM to 41.4m.
Spice's net adds for the month is 96,033 up 39.7% MoM but down 31% YoY. The subscriber base now stands at 3.8m, flat YoY and up 2.6% MoM. |
| Published on Tuesday, January 13, 2009 at 12:44 PM |
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| Friday, January 09, 2009 |
| New 2G Licensees Roll-Out Obligation likely to be Raised - DoT |
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The Department of telecommunications (DoT), the top communication body in the nation, is looking to tighten the network roll out obligations of new 2G licensees. A committee of the department which was entrusted to review the task has in fact recommended that in case the licensed areas covers large metropolitan cities, services in the same should be rolled out with in one year instead of the existing norm of three years.
The new recommendations will be applicable on latest telecom licensees including Swan Telecom, Unitech Wireless and Datacom Solutions etc. In case these firms fail to fulfill recommended roll out obligations, they may face penalties. While there is also a clause of taking back licensees in case companies fail to fulfil mandated requirements, the government has never done this so far.
Roll out obligations relate to the speed at which a service provider should expand its networks relative to total area of operations that it gets through a license. In case of a metro city, like say Mumbai circle, the company only has one district to roll out services and therefore DoT feels that the task should be completed within one year instead of three year limit prescribed earlier.
The development comes in the light of companies like Unitech resorting to trading of licenses right under the nose of IT & Telecom Ministry making windfall pofits. |
| Published on Friday, January 09, 2009 at 10:51 AM |
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| Thursday, January 08, 2009 |
| Cabinet Committee - Decide on 3G Pricing |
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In wake of differences among various ministries regarding the pricing issue of third generation (3G) telecom services spectrum auction, the Department of Telecommunication (DoT) has left it to the Cabinet Committee on Economic Affairs (CCEA) to take a final call. DoT also suggested to go ahead with the current reserve price and if the expectations of the Government are not met, then th auction shall stand cancelled.
It is understood that the ministry of industry and information technology is not in favour of doubling the base prices for auction of 3G spectrum. Department of Industrial Policy and Promotion (DIPP) also share the view of its ministry.
The finance ministry had earlier suggested in a note addressed to the telecom secretary that base price for 3G spectrum for GSM operators should be doubled from Rs 2020 crore to Rs 4040 crore. The price for Wimax, the corresponding CDMA platform for advanced telecom services was also advised to be raised by 100%.
While DoT is not in favour of raising the price, the finance ministry feels that current base price may result in lower government revenue. As a result the issue is left now to be decided by the CCEA which may meet in next few days to take a call on the matter. |
| Published on Thursday, January 08, 2009 at 12:29 PM |
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| Wednesday, January 07, 2009 |
| Mobile Number portability to be Delayed |
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In a development that will harm the interests of mobile subscribers, the number portability scheme, which was set to be launched in June 2009, may get delayed. The Department of Telecommunications (DoT) has extended the date for issuing clarifications to bidders’ queries by a month. The same are now expected to be issued on January 22.
Until DoT issues clarifications to the bidders' queries, it may not initiate the process of accepting applications from firms to act as agencies for porting numbers. Earlier the 3G auction was too delayed by around a fortnight and looks set to be delayed further.
The delay in Number Portability is Good for incumbent players like Bharti Airtel which is trying to squeeze as much as possible from customers with their high billing rates. |
| Published on Wednesday, January 07, 2009 at 1:04 PM |
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| Tuesday, January 06, 2009 |
| Tata Teleservices Gets Aggressive for GSM Launch |
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The house of Tatas have finally gotten aggressive for the last leg of the great Indian Telecom Revolution. After being a flip-flop for several years, they now have a strategy to focus on acquiring customers in both the CDMA and yet to be launched GSM platform.
Tata Teleservices, will shortly announce the launch of services on the popular GSM platform, its managing director Anil Saldhana said
We will shortly announce our GSM launch. We have got spectrum in 13 circles (service areas) and rest we expect to add by month-end, baring one or two. In a related development, Tata Teleservices sold 49% stake in its Telecom and Tower Infrastructure arm to Quippo Telecom Infrastructure Ltd (QTIL) for a sum of Rs 2,400 crore. As per the deal, QTIL will make an upfront cash payment of Rs 2,400 crore and also
transfer its 5,000 towers to the Tatas tower company - Wireless Tata Telecom Infrastructure (WTTI). QTIL will algo get the management control of WTTI. |
| Published on Tuesday, January 06, 2009 at 12:35 PM |
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| Thursday, January 01, 2009 |
| Impact of TRAI Interconnect usage charges |
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The Telecom Regulatory Authority of India (TRAI) is set to review interconnect usage charges (IUC) after they were fixed back in 2002-03 and not revised since then.
IUC is payable by one telecom operator to 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 telecom network.
Although reduction in these charges would lead to a lower tariff for customers as benefits would be passed on due to intense competition, it would dent the profitability of telecom operators mainly Bharti Airtel, Reliance Communications, BSNl and Vodafone. The move would prove beneficial to new operators since bulk of traffic originating on their low subscriber base would be terminating on the existing operators network, as the former have lesser network than the latter. |
| Published on Thursday, January 01, 2009 at 11:31 PM |
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