to form new company for emerging markets business
Whampoa to form a separate company listed in Hong Kong to focus on its
emerging markets telecom businesses. The new company would include Hutchison's
fixed-line and mobile businesses in Hong Kong, as well as its stakes in
mobile operations in India, Thailand, Israel, Macau, Sri Lanka, Ghana and
Paraguay. Hutchison Whampoa, controlled by Asia's richest businessman Li
Ka-shing, would retain a majority stake in the separately listed company.
The objective is to add further focus to the group's telecommunications
activities in growth markets by aggregating its extensive assets and financial,
operational and management resources in a single vehicle.
IDEA Cellular to launch
MMS & GPRS in Maharashtra
IDEA Cellular will launch
general packet radio switching (GPRS) and multi-media messaging services
(MMS) by May in Maharashtra circle. The company is set to expand its spectrum
availability. It has asked for an additional 2.2 megahertz (MgHz), taking
its total spectrum availability to 10 MgHz. IDEA has introduced EDGE technology
(3G) in Delhi on a pilot basis to demonstrate its technological capabilities.
The company has achieved net profitability in its Maharashtra circle, which
contributes 40% of its total revenues. Idea will invest Rs. 300 crore in
the next financial year for network expansion. In the Maharashtra circle,
it will set up 100 new cell sites, a new gateway switch in Pune, which
is a network management technique, upgrade its switches at Pune, Nagpur
and Goa and add 700 more transceivers.
Bharti to raise $100m
Bharti Televentures is planning
to raise up to $100m by issue of Foreign Currency Convertible Bonds (FCCBs)
convertible into equity shares. The company board has approved the proposal.
The issue carries a greenshoe option of $15m. Details on the pricing and
maturity of the bonds were not yet decided. The raising of funds through
FCCBs will be subject to shareholders' and other statutory approvals, as
may be required.
Bharti to merge its
Chennai & Kolkata operations
Bharti is merging Bharti
Mobinet, its Chennai operations and Bharti Mobitel, its Kolkata operations
into Bharti Cellular. The DoT has given its approval to the merger. Bharti
acquired BK Modi's Kolkata operations of Spice, while the Chennai operations
were acquired from the Crompton Grieves group. The merger of Bharti Mobinet
and Bharti Mobitel with Bharti Cellular will smoothen the company structure.
Bharti Mobinet is the largest cellular service provider in Chennai, with
more than 3.6 lakh subscribers. In Kolkata, Bharti Mobitel is the second
Bharti sources CEOs
Bharti has finally roped
in Jayant Khosla, Coca Cola's regional vice-president (operations) Mumbai
for its CEO position in Mumbai. Mr. Khosla's appointment comes more than
five months after previous CEO, Atul Jhamb, put in his papers to join Reliance
Infocomm. In Jammu & Kashmir also the company has appointed RPS (Teddy)
Bhullar to look after operations in the state who is also from Coca Cola.
In some other circles, Bharti is looking at recruiting internally. Shankar
Prasad, who heads the Bangalore circle, has been given charge of UP (east).
Bharti plans to launch its services in the six new circles by August-September,
Bharti to invest Rs.
Bharti has drawn out plans
to invest Rs.2,000 crore during '04-'05 as part of its plans to connect
over 2,300 towns. Bharti is rolling out its mobile services in six more
circles -- Jammu and Kashmir, Uttar Pradesh (East), West Bengal, Orissa,
Bihar and Rajasthan. The
company is planning to up its network capacity to cater to more than 11
million subscribers. It is also proposing to double up its cell sites from
5,000 to about 10,000 across the country. The network would be scaled up
to handle four billion call minutes a month. As
part of the plans, Airtel would expand its mobile services to 1,000 new
towns during 2004-2005, out of which 300 would be added in six new circles.
Across 21 Airtel circles, mobile connectivity would be provided to 20,000
new villages by the end of the next financial year.
Roaming in Pakistan
Indian government allowed
roaming on cellular from Pakistan just before the Indo-Pak cricket series.
The permission is till June.
AirTel was the first indian
service provider to offer roaming services in Pakistan at a flat rate of
Rs.45 p/m. Now, BPL Mobile's calls from Pakistan to India will cost Rs.44
p/m. Hutch and Airtel are charging Rs.12 for SMSs from Pakistan to India
and Rs.5 from India to Pakistan. Besides, AirTel users will have to pay
an additional 15% surcharge. Hutch would charge Rs.50 per minute for calls
within Pakistan and Rs.57 for calls from Pakistan to India, including 15%
surcharge. Hutch is offering SMS from India to Pakistan at Rs.5.
Ezze to launch mobile
phones in India
Korean company Ezze Mobile
Technology is planning to launch its range of cellular phones in India
for which it is currently looking for a national distributor. According
to Mr. I S Sung, GM, Ezze Mobile Tech, the company plans to launch three
to four GSM handsets in India initially. Ezze currently sells its handsets
in China, Hong Kong and Taiwan and other markets. China accounts for 60%
of the revenues while the rest comes from south east Asia and Europe. The
company plans to invest $0.5 million in India initially, he said, adding
that it would ship out 5,000 units in the first phase. Later target would
be at least 10,000 units per month in India. Ezze's current portfolio includes
folder (clamp-shell) models, swivelling camera handsets and rotatory camera
Kyocera sets up test
centre in India
Kyocera Wireless, a CDMA
(code division multiple access)handset maker has set up a product test
centre in Bangalore, its first such facility outside its San Diego headquarters.
The company has made a multi-million dollar investment in this centre and
recruited 55 technicians to conduct software and system tests for Kyocera's
Indian handsets market
to touch 25m units
The mobile phone handsets
market in India is expected grow over 50% to 25m units during 2004. India
is the fastest growing market for mobile phone handsets worldwide. From
5m sets in '02, the Indian market grew to 16m in '03. It would touch 25m
The drastic reduction in
the import duty on handsets has changed the market dynamics. When the duty
level was very high in '01, almost about 80-90% of the demand was controlled
by the grey market. Today, with the duty falling to a low of 5%, the total
industry's grey market portion could be estimated at around 20-25%.
Roaming facility in Pakistan
Indian government has allowed
roaming facility for Indian mobile phone users in Pakistan. Following this
Airtel and Hutch are among the first ones to provide this facility. These
operators are tying up with Mobilink in Pakistani. Indian mobile subscribers
will be able to call family and friends visiting Pakistan on their Indian
mobile numbers for the next four months. The roaming facility is among
the number of initiatives being extended by the Indian government to improve
bilateral relations between the two countries.
Hutch launches 'click
'n print MMS' service
Hutchison Telecom announced
a three-way partnership with Nokia and Kodak to nationally launch its Click
& Print MMS service.
The service allows Hutch
mobile subscribers with GPRS-enabled Nokia camera phones to click and courier
the developed photographs to any destination in India within five days.
The printing and courier facility will be handled by Kodak.The service
will be available to any Hutch GPRS user opting for the service at Rs.12
per print (inclusive of courier charges), which will be billed to the Hutch
user's account. Currently the service will be available on four Nokia GPRS
handsets - Nokia 7650, 6600, 3660 and 3650.
The user needs to key in
the words Kodak and SMS it to 5555. This lets you download the Kodak software
tool that handles picture transmission from your cellphone. Then pick any
image of your choice and use the downloaded Kodak icon and Hutchison's
GPRS network to transmit images to Kodak's central server in Mumbai, from
where they will be developed and couriered to any destination address specified
by the sender. Hutch has nearly 1 million GPRS subscribers across India
out of which only 1.5 lakh use MMS.
IDEA is ready for
IDEA Cellular is ready for
an IPO if necessary. The proceeds will be used to take care of acquisitions
and expansion plans. The company recently concluded the biggest acquisition
in the Indian wireless industry when it took over 100% stake in Escotel
Mobile Communications, giving it ownership of six telecom circles and 8.25
lakh subscribers. It is looking for further acquisitions, preferably original
licensees. Acquisitions would give IDEA a larger footprint and help it
to become profitable. In fact, on a stand alone basis, the company has
the critical mass in the existing circles to be profitable and have a EBIDITA
margin of 43%, including Delhi. Over the next three years, IDEA will invest
Rs.1,800 crore on expansion.
Philips has invented
a lens that works like human eye
Philips Electronics has
invented a tiny digital camera lens to fit inside a mobile phone that could
focus on objects and create sharp pictures in ways that are similar to
the human eye. Unlike high-end digital cameras, the new lens does not require
mechanical moving parts because it works by manipulating two fluids in
a tiny transparent tube. The company says that it will build a production
line for the three-millimetre lenses that are aimed at low-cost imaging
products, such as digital cameras that fit inside a mobile
phone or a home security
system. By charging the sides of the tube with an small electric current,
one of the two fluids is drawn to the edges while the other fluid fills
up the remaining space in the tube. The place where the two fluids meet,
functions like a lens.
By changing the current,
this lens can be shaped hollow, curvex or anything in between, so that
it can focus on objects far away or as close as five centimetres. The lens
is the first of its kind and the technology has been patented by Philips.
growth in telecom sector
According to a presentation
by Ernst & Young (India) at CII telecom summit, consolidation in the
telecom sector is inevitable and the restriction on foreign equity holding
continues to hamper the fund raising ability of the sector. The Government
should address the situation fast. Bigger players will drive consolidation
and restructure their operations leading to a greater ability to invest
in the growth of the telecom sector in India. This process should result
in 3-5 large players, with a pan India footprint and focus. ABN-AMRO projected
mobile access revenue to grow at 45% compounded annual growth rate to Rs.47,400
crore by the year 2008. Mobile is expected to overtake fixed lines by September
The share of wireless users
has shot up to 40% of India’s total telephone subscriber base. As per E&Y
forecast India’s mobile users will make up 70% of the total telephone subscriber
base by 2007. It pegs India’s total telephone subscriber base at 203m by
end of 2007, in which wireless will account for 142m. It also expects India’s
teledensity levels to touch 20%, and annual telecom industry revenues to
about $25bn by 2007. The reason for such optimism is attributed to the
introduction of unified licensing, the DoT nod for operators to transfer
wireless licences, the allowing of intra-circle wireless mergers and the
implementation of the IUC regime.
The mobile phone prices
dipped by 8-10%. The market is estimated to grow 20% faster than predicted
earlier and would rise to 2.5 crore units from 1.3 crore last year. It
is expected that about 14 million GSM and 11.8 million CDMA handsets will
be sold in 2004, according to the Indian Cellular Association (ICA). Major
mobile handset companies have reduced prices to the extent of 26% across
all segments following the reduction of basic customs duty to 5% along
with abolition of 4% SAD announced earlier. If all their other recommendations
on SAD and CVD are met too, ICA expects industry to achieve a size of $10
billion by 2007 and legal market to grow to 90%.
recommendations only after the elections
TRAI will submit its recommendations
on the unified licensing regime only after the forthcoming loksabha elections.
Although the process of formulation of guidelines would begin this week.
The Election Commission brought in force the model code of conduct according
to which the government cannot announce new policies. Even if the TRAI
submits its recommendations to DoT in April, the government would not be
allowed to announce guidelines for the unified telecom licences. Meanwhile,
the regulator would release consultation paper this week. All the interested
parties would send their response to TRAI within one month. Then TRAI would
conduct open house session all over the country. The regulator would consider
all the views while making final recommendations.
Cellphone & camera
on a wristwatch !!
combination of wristwatch, camera and cellphone has been quietly launched
in India first. The device will hit the US and Korean markets only in late
March. Telson TWC 1150, a designer phone has been brought to India by Reliance
Infocomm. It will be exclusively available in select Webworld stores
only in select cities. Priced at Rs.23,900 this 98 gm device also has features
like a speakerphone, voice recording and voice recognition capabilities.
To listen to the call one can use the instrument like a speakerphone as
long as your wrist is at chest-level or use an earpiece which is infrared-enabled
else one can wear an metal ring on finger connected with a thin wire to
the wristwatch, bring your finger close to the ear to listen to the caller.
You can also use the plug-in high-resolution camera that is included in
the handset kit. The CDMA based gadget also supports voice dial, voice
memo, call recording and answering machine functionalities.
Airtel to centralise
Airtel is centralising billing
for all its mobile subscribers in 15 states and shifting the entire operations
to Delhi. Frequently travelling subscribers will be able to access customer
care through a single number from anywhere in the country. This way, the
company will save more than 30% of development and maintenance costs and
deploying new services across the country will be much cheaper. Bharti
is investing over Rs. 300 crore to upgrade the system. The expected services
are like e-bills and online payments. Around a quarter of the subscribers
are expected to opt for online bills in next three months, thus saving
paper costs. The company is deploying Kenan billing system for this.
GSM World Congress
GSM World Congress in Cannes
is celebrating one billion GSM customers around the world across 206 countries.
The world congress at Cannes attracted over 36,000 visitors this year which
is 30% more than in the previous year. The huge endorsement of GSM by the
world has helped in lowering the infrastructure cost and, more importantly,
handsets and SIM card prices. Development of content is taking a quantum
leap in the GSM arena. The power of SIM cards, as an authentication tool,
holds promise for the industry, which may not only parallel the revenue
opportunities available in traditional telephony, but may well go beyond.
Applications like music download, ring tone downloads, bank transactions
and the associated payment solutions around the mobile phones are going
to be the next big things. The power of GSM not only lies in the rich technology
and its open standard, but in the coming together of almost all the big
and small mobile players. This makes it the most power-packed service,
at affordable prices, having the simplicity of user experience which is
expected to reach over two thirds of the world in the next few years.
Hutch to invest Rs.300
cr in Gujarat
Hutch is planning to invest
Rs.300 cr in Gujarat circle for the year 2004. The funds will be utilised
for network capacity enhancement and upgradation of its call centre and
billing systems. The company is planning to add 300 cellsites to existing
650 cellsites. 300 seats will also be added to its 130 seats call centre.
50 more towns will be added to its Gujarat coverage. Investments would
also be made in upgrading billing systems, increasing the number of exclusive
one-stop Hutch shops to 50 from 29 and hiking teleshops from 217
to 400 by the end of the year. Hutch also intends to put up recharge zones
in trains allowing customers to recharge their cellphones while on the
move. At present, Hutch has put up 600 recharge zones in public places
including Volvo buses plying in Gujarat.Hutch has already invested Rs.1135
crores in Gujarat. It has a total subscriber base of 8.57 lakh in Gujarat.
Operators will have
to submit seperate accounting statements
To identify cross-subsidisation
practices and investigate cases of predatory pricing, TRAI has made it
mandatory for operators to submit accounting statements separately for
every service, for each licensed area. This reporting is applicable to
all licensed telecom service providers offering services like basic, national
long distance, international long distance, cellular, internet, VSat, radio
paging, public mobile radio trunk and global mobile personal communication
services. The accounting separation reports would help TRAI to monitor
and measure financial performance of individual telecom products/network
services and information about disaggregated costs to the level of network
elements. The reporting system would also help generate accurate information
on costs, which is necessary to decide interconnection usage charges (IUC)
and access deficit charges (ADC). This regulation is also applicable on
integrated players and companies holding unified access services licence.
AT&T puts its
IDEA stake on the block
As Cingular bought out AT&T
Wireless, its stake in IDEA Cellular is on the block.The US telecom major
is in talks with international private equity investors to offload its
stake in the three-way joint venture as the new buyer Cingular has shown
no interest in Indian operations. AT&T has already pulled out of its
other investments in India, with the most recent being the exit from BPL
AT&T's 30% share in
IDEA is in excess of Rs.750 crore.
In the largest all-cash deal,
the second-largest US mobile phone group, Cingular (owned by regional carriers
SBC Communications and BellSouth) recently took over it rival AT&T
Wireless. AT&T Wireless split from its parent company AT&T in July
'01 to become a full-fledged wireless major.
Jag Mohan Mishra joins
Jag Mohan Mishra is the
new member of the Telecom Commission. A 1967-batch India Telecom Service
officer, Mr. Mishra was an advisor in DoT. As member production, he will
be responsible for the licences issued to both private parties and PSUs
for operating, and foreign investments.
MTNLto launch prepaid
MTNL would soon launch prepaid
services on its CDMA network. C-DoT is giving final touches to the intelligent
network (IN) platform that would enable MTNL to offer prepaid services.The
new network of eight lakh lines would be operational within six months.
Both Delhi and Mumbai will get 4 lakh lines each. MTNL is placing orders
for handsets for the new CDMA network. Currently, MTNL has a CDMA network
of 1.5 lakh lines each in Delhi and Mumbai. It has a subscriber base of
80,000 in Delhi and of about 60,000 in Mumbai.
Government has finalised
guidelines for mergers and acquisitions of phone companies within a telecom
circle which will facilitate industry consolidation. The guidelines issued
are more liberal than those recommended by TRAI last month. TRAI had recommended
that the market share of the merged entity should not exceed 50%, DoT has
raised the limit to 67% . For cellular industry, the limit will include
both CDMA & GSM subscribers. This implies that, for example, in Delhi,
where there are around
4 million mobile subscribers,
over 3 million GSM and about a million CDMA, big cellular operators
like Airtel and Hutch can merge.
Taking purely GSM subscriber
base, they couldn't, because in January the two together already had market
share of about 80%. The guidelines also stated that the spectrum of individual
companies would be transferred to the merged entity with a ceiling of 15
Mhz per operator per service area. All intra-circle merger and acquisitions
would need DoT’s approval. Moreover, there should be a minimum three operators
in an area post-merger. The mergers would be permitted in the categories
- cellular licence with cellular licence, basic with basic, unified with
unified, basic with unified and cellular with unified.
launches pre-paid service
Reliance Infocomm launched
its pre-paid services today. This is the first Indian CDMA operator and
the second such worldwide to offer this facility. The company offers a
handset for around Rs.3,500 along with 10 recharge coupons of Rs.324 each
which are valid for six months and are free with the handset. Of these,
two will be loaded on the handset and the balance eight will be available
in the form of coupons. Each coupon will have Rs.200 talk value. The bookings
for the Reliance prepaid service is on at the retailers who have to pay
the handset price upfront. Reliance closed the Rs.501 scheme around 15-30
days back to make way for the prepaid scheme. All local calls, intra-circle
calls and inter-circle calls of less than 50 km distance to another mobile
phone would be charged at Rs.2.49 a minute. All inter-circle calls of above
50 km to another mobile phone would be charged at a flat Rs.2.99 a minute.
All local calls, intra-circle and inter-circle calls of less than 200 km
to a fixed phone would be charged at Rs.2.99 a minute. The charge would
be Rs.3.99 a minute if the distance exceeded 200 km. There would be no
roaming rental and no monthly rental for voicemail. The grace period for
re-charge would be six months. The company would soon announce a new scheme
that would allow its post-paid users to migrate to the pre-paid platform
while retaining the same number.
MTNL launches customer
MTNL is launching schemes
rewarding its loyal customers with bonus points that could be redeemed
for attractive gifts. The company will give points for loyalty, usage,
early payment of bills and for using unified services. These schemes will
be implemented from next week. Through its new schemes, MTNL will offer
incentives such as Internet account for 250 hours, attractive cordless
phones and virtual credit cards (VCC) of Rs.1,000. A customer who accumulates
550 bonus points is entitled for a VCC of Rs.108, for 1100 points he will
get a VCC of Rs.216, for 2700 points the entitlement is either for a VCC
of Rs.540 or an Internet account of 100 hours. For 5400 points, subscribers
are entitled for an Internet account of 250 hours or a VCC card of Rs.
1080. For 10,000 points, a customer can get a cordless and customer line
identification phone. For 25,000 points, MTNL will give a CDMA connection
to the subscriber. All existing customers with no outstanding would get
100 bonus points from the day of launch. There will be a special bonus
for customers using MTNL services for over a year. Those who are with MTNL
for over five years will get a bonus of 125 points. The subscribers who
come back to the MTNL network will get 100 points. Recommending MTNL to
any new subscriber would entitle a customer 50 bonus points. The bonus
point system will also encourage the use of MTNL phones. For instance,
if a customer makes 1300 calls in a month, he is entitled to 100 bonus
points. A subscriber can earn up to 1750 points in a month through usage.
Tata Tele to recruit
20,000 in two years
Tata Teleservices (TTSL)
plans to recruit close to 10,000 employees and outsource an additional
10,000 jobs for rolling out its services in 11 new circles over the next
two years. Currently its employee strength is 5,000. Currently operating
in six states including Delhi, Maharashtra, Karnataka, Andhra Pradesh,
Tamil Nadu and Gujarat, the company has a customer base of about 15 lakh.
The new jobs will be to operate the newly acquired licences in 11 more
circles, including Bihar, Haryana, Himachal Pradesh, Kerala, Kolkata, Orissa,
Punjab, Rajasthan, Uttar Pradesh (East), Uttar Pradesh (West) and West
Bengal. The company would primarily be recruiting customer care professionals
with experience in CRM, telecom engineers for network, sales and marketing
and communication experts. The recruitment would take place across various
levels, with the average age of the candidates being around 32 years. The
company would also be outsourcing operations like project management, network
roll-out, and certain business processes.
Bharti to announce
$400 million equipment deals
Bharti is expected to announce
up to $400 million worth of equipment contracts for its cellular services
over the next few days. The company has decided to sign up Ericsson, Motorola
and Siemens as its main vendors, both for expansion of the existing 15
telecom circles as well as setting up new projects in six circles for which
it has bought licences. These will be three-year contracts and the first
one is expected to be signed with Ericsson worth $250 million as Ericsson
already operates 10 of AirTel circles. Ericsson is also looking at contracts
to operate, maintain and upgrade networks, which will be over the equipment
deal. The expansion and the new networks will be EDGE (Enhanced Data rates
for GSM Evolution) enabled to allow high speed data and video on mobiles.
1.6m cellular subscribers
added in January
Indian cellular phone industry
added 1.58m subscribers in January ’04, taking the total subscriber base
to 29.76m. The total GSM subscriber base stood at 23.36m as of January
end, while the CDMA subscriber base touched 6.4m. Reliance Infocomm is
the largest mobile operator with a subscriber base of 6.45m (CDMA and GSM
combined). Bharti is at number two position with a subscriber base of 5.86m.
BSNL and Hutch held on to the third and fourth positions, with subscriber
bases of 4.89m and 4.46m respectively. IDEA Cellular and BPL Mobile had
2.44m and 1.65m subscribers respectively in January ’04. The total mobile
subscriber base of Tata Teleservices stood at 0.6m at the end of January
Hutch to invest Rs.1,700
Hutchison Essar is planning
to invest around Rs.1700 crore on network expansion and setting up new
networks over the next one year to expand its footprint and to double its
subscriber base to eight million subscribers. The company, which currently
has a subscriber base of four million across seven circles, added four
more circles of Rajasthan, Haryana, UP-East and Punjab.
DoT clears TCIL's
plan to sell 30% Hexacom stake
DoT has approved government-owned
Telecommunications Consultants India’s (TCIL) proposal to sell its 30%
equity in Hexacom. Currently, Shyam Telecom controls a 40% stake in the
company and it has exercised the right of first refusal to buy Canada based
TIW’s 27.5% stake in the company. Hexacom is a cellular services provider
in Rajasthan having more than 2,14,187 subscribers in the state. It is
a zero-debt company.
MTNL hikes STD tariffs
MTNL has marginally
hiked long distance tariffs on cell-to-cell calls by 60 paise while keeping
the local tariffs unchanged after
the implementation of new
IUC regime. Increased tariffs would be applicable to post paid subscribers
Tata Tele pays Rs.417
cr for 11 new licences
Tata Tele Services has paid
Rs.417 crore to DoT for 11 new licences under the IUC regime. The new licences
coupled with six circles where it already operates virtually gives the
CMDA mobile operator a national footprint almost on par with BSNL and Reliance
Infocomm. The company hopes to start off services in these 11 new circles
by August ’04. These circles include Bihar, Haryana, Himachal Pradesh,
Kerala, Kolkata, Orissa, Punjab, Rajasthan, UP East & West and West
Global sales of mobile
phones exceeded all expectations in ’03
According research groups
that track the world’s consumer electronics segment of mobile handsets
including Gartner Dataquest, IDC and Strategy Analytics, global sales of
mobile phones exceeded all expectations in ’03 and the handset industry
will enjoy an even better ’04 as new handset models with color screen and
high speed internet will catch on. Mobile phone sales to consumers were
recorded at 510m units in ’03 and will exceed 560m units in ’04. It is
the first year since 2000 that handset demand rose more than 10%.
The cell phone manufacturers
are benefiting from booming emerging markets such as China, India, Brazil
and Russia, where they sell relatively cheap handsets to first-time buyers.
They also target existing customers in the US, Europe, Japan and South
Korea, who are replacing old models.
Japan is leading this trend.
Two years after the world’s first third-generation mobile networks were
launched there, consumers are now embracing services such as video conferencing
on models with built-in cameras and large color screens. In the US and
Western Europe, consumers are also replacing their old monochrome models
for those with color displays and cameras, but use less-advanced data services
such as picture messaging because networks have not been upgraded.
Smartphones, which feature
calendars, email, pictures, music and other services in one device, were
one of the fastest-growing new categories.
Receive incoming voice
calls/SMS in entire validity period
Reliance Telecom Limited
has extended a new feature to its pre-paid (Smart) services under which
incoming voice calls/SMS will now be available to pre-paid subscribers
during the entire validity period even after the expiry of the talk time
value. The extended service came into force on February 2. The grace period
starts from the day validity period expires. Also, the Reliance Infocomm
has announced a new tariff under the new interconnected user charge (IUC)
regime. It announced that under its popular Economy 149 and Budget 149
plans all local and intra-circle calls to mobile phones will cost Rs.1.49
per minute. Earlier, calls to GSM phones were charged at Rs.1.99. The new
tariff will mean a saving of 25% for calls under this category. The calls
to fixed line phones in more than 500 km distance will continue to be charged
at Rs.3.99 per minute as before.
According to TRAI
hike is not justified
According to TRAI cellular
operators were not justified in increasing call charges on account of new
interconnect user charges (IUC), pertaining to which phone companies pay
one another for connecting their networks and completing calls. The new
IUC regime took effect from 1st Feb. Mobile operators like Airtel and Hutch
said that IUC levied on them a new ‘tax’ called ADC (Access Deficit Charge)
to be paid to state-owned phone company BSNL. The operators said this levy
had led to the hike in STD, ISD and local call rates. Ever since the new
IUC regime was announced in October, TRAI has maintained that the rates
would not go up since when the new regime was being worked out it was demonstrated
that there was no need for a tariff hike. Weighted average, the method
used for checking out the impact on tariffs clearly showed that there were
enough margins (for the industry) despite the new charge. He said that
since these tariffs were in forbearance (ie.phone companies were free to
fix tariffs), TRAI would let the market bring them down.
Mobile services may
As the new interconnect
usage charges (IUC) regime has come into force cellular companies are designing
new tariffs plans which are bundled with more value additions but may turn
out to be costlier. Explaination is that under the IUC regime, cell users
will have to pay a carriage charge of Rs 0.65 to Rs 1.10 to the long-distance
carrier, 30-80 paise as additional deficit charge towards the rural telecom
fund and another 30 paise as termination charge to the network where the
call terminates. This would make for a tariff hike of 10-15%. Generally
the companies don't think that they will lose customers because of this
since the operational and exit cost of migrating to other options like
CDMA service would be a deterrent and the subscribers already have a satisfaction
level with GSM services.
FDI hike not before
Telecom companies which
have been waiting for the FDI investments may have to wait till the polls
are over. The issue which was pushed off the Cabinet meeting last month
will not appear in the deliberations at the last meeting of the body on
February 4. This rules out the possibility of a green signal on hiking
the FDI from 49% to 74% till elections are over. The proposal, which had
reached a stage of closure at the meeting of the Cabinet on January 15,
was taken off the agenda on the grounds that the matter needed detailed
Tele density highest
Kerala added 1.37 lakh land
line phones last year, taking the total landline connections in the state
to 31.58 lakh resulting in the tele-density of 10.98 phones per hundred
population. This is more than double the national average which is less
than 5 phones per 100 population. In the rural sector Kerala has 8.43 phones
per 100 population, which is nearly 8 times the national average. There
is also a cell phone boom in the state with the total connections crossing
a million mark in December 2003. BSNL has a 35% share of the cell phone
market in the state.
its operations by merging GSM with Basic services
Preparing for the unified
access licence regime, MTNL has restructured its operations by merging
its GSM division with its Basic telephone operations. Sharing of infrastructure
and no separate accounting will save the company around Rs.50 crore per
Mr.Kuldeep Goyal, former
executive director of MTNL's GSM mobile services is redesignated as chief
general manager (wireless services) and will now report to Mr.A K Girotra,
executive director of MTNL (Delhi). He will be looking after GSM and CDMA
services in Delhi. MTNL will be focussing on attracting new customers as
well as retaining the existing ones. GSM services would be promoted for
those who want full mobility, while CDMA is targeted at the onesf who want
limited mobility with high data access speed. The company would be replacing
old equipment with the new state-of-the-art technology infrastructure,
expanding its network and add cell sites to improve coverage and quality
of service. It will add four lakh lines each in Delhi and Mumbai within
MNCs review manufacturing
As the government has reduced
customs duty on cellphones, multinational mobile manufacturers are reviewing
their plans to manufacture handsets locally. Specially the Korean telecom
majors like Samsung and LG. The government recently reduced the customs
duty on cellphones to 5% from 14% and abolished the special additional
duty. French multinational Alcatel has already signed up with ITI to manufacture
handsets in India. According to the analysts, manufacturing handsets is
not viable at this point of time, even with zero excise duty, because of
the current market size but these multinational companies may consider
this at a later stage. Mobile subscriber base in India has the highest
growth rate of 38% across Asia Pacific and may reach 56m subscribers by
December '04. Industry estimates that around 90 lakh cellphones were sold
Hutchison India reshuffles
Hutchison India has reshuffled
its top management following the integration of Aircell Digilink which
was operational in Haryana, UP-East and Rajasthan. Sandip Das, as executive
director, will be Hutchison's operational head for the Mumbai, Gujarat,
Kolkata, Andhra Pradesh, Karnataka and Chennai circles, Rajiv Sawhney will
be executive director in charge of Delhi, Punjab and the three Aircell
Digilink circles (Haryana, UP-East and Rajasthan).Both will report to Hutch
India MD Asim Ghosh. Sanjoy Mukherjee and Sunil Sood have been appointed
as CEOs for Gujarat, Kolkata circles respectively while Mr.Selvakumar will
take charge as CEO, Chennai and Karnataka.
AV Birla group rediscoveres
its interest in telecom
It was believed earlier
that the Aditya Birla group was planning to exit cellular telephony because
of lack of synergy with the group’s main commodity businesses.The group
seems to have rediscovered its interest in the telecom business, as things
are looking up for the telecom sector. Also, IDEA Cellular, the three-way
joint venture between the Birlas, Tatas and AT&T, completed its financial
closure in October ’03 and has recently acquired Escotel.
Ericsson looking at
Ericsson (Swedish telecom
equipment manufacturer) has set up networks for Bharti, Tata and BSNL etc.
The company has signed up contracts worth $400 million over the past few
months. But the margins on these sales are thin. So the company is planning
to now manage networks. For a long time, the core business of an operator
was to run networks. But now operators are realizing that with increasing
competition their core business is to focuss on adding new subscribers
and retain the existing ones.
Bharti Tele to raise
Bharti TeleVentures is planning
to raise around $500-600 million by way of external commercial borrowings
(ECBs) in the next financial year following the relaxation in ECB guidelines
by the government. This will be used to refinance the earlier loans and
for equipment purchases. The government put all ECBs up to $500m on the
automatic route. Corporates can now get automatic approvals for raising
ECBs, as long as the loan is for a minimum of five years. The automatic
route is available for the industrial sector.
Broadband on mobile
GSM mobile services providers
are upgrading their networks to third generation networks (3G) also known
as EDGE (Enhanced Data rate for Global Evolution). IDEA Cellular is expected
to launch its EDGE service this week in Delhi, while Bharti is planning
to upgrade to EDGE in Delhi by the mid of this year. EDGE is a 3G network
technology which delivers internet connectivity at speeds three times faster
than 2.5G GPRS network. On an EDGE-enabled handset like Nokia 6220 video
phone, a subscriber can enjoy a series of mobile data applications at speeds
up to 118 kbps, almost three times of existing GPRS services. Most of the
GSM mobile networks in India are already GPRS-enabled, which allows subscribers
to connect to the internet. Upgrading from GPRS network to the EDGE network
will also result in a shift to EDGE enabled handsets or phones.
ICA seeks states'
help to end grey mkt
Indian Cellular Association
is asking for state governments' help to end grey market. Some states continue
to have high sales tax rates for handsets. The recent duty cut announced
by the central government was expected to take the marketshare of legal
handsets in the country from the present level of 45% to 80% within a month.
But states like Kerala, Bihar, Jharkhand, Orissa and Assam where high rates
of sales tax have kept the legal market at a great disadvantage. In Kerala,
where the sales tax on mobile handsets is as high as 13.8%, the grey market
accounts for as much as 90% of the handset market. Kerala is of particular
interest to handset companies since the state crossed the 1 million mark
in mobile users. According to ICA, the Indian market for GSM handsets in
2004 was estimated at 16.90 million.
LG to developed mobile
software in India
LG plans to focus on mobile
phone software development in India. This unit currently is part of LG
Soft India, with around 100 engineers and works in conjunction with LG
Electronics, Korea. It works on both GSM and CDMA technologies. This
unit alone is expected to have 250 people in a year’s time and then eventually
double-up to 500. The firm may become a separate business entity. This
will make the centre one of the largest such facilities globally.
Bharti group third
among listed service companies
Revenue of Rs.1,269 crore
in the third quarter brings Bharti to third rank among listed service companies,
behind ICICI Bank and Wipro, emerging ahead of Infosys, Tata Power and
HDFC.Bharti emerged ninth in terms of market capitalisation on the BSE.
The top 10 list includes stocks like ONGC, Reliance, IndianOil, HLL, Wipro,
Infosys, SBI and ITC. The company has nearly doubled its customer base
to 60.7 lakh at the end of December ’03, compared to 30.9 lakh at the end
of ’02. After posting losses in ’02-03, the last three quarters have been
profitable, with net profit jumping 73% in Q3.
IB wants govt. to
monitor security in telecom
Intelligence agencies want
the government to set up a dedicated body to monitor security aspects in
telecom services. The telecom ministry's proposal to increase foreign investment
limit to 74% from 49% was deferred by the cabinet on January 15th as the
security agencies had some objections for which the communications ministry
failed to give satisfactory reply.
BSNL announces major
BSNL is planning an investment
of Rs.13, 000 crore in 2004-05 for expansion of GSM and CDMA networks.
BSNL is looking at capacity addition of around 13 million during the next
fiscal of which GSM connections would be between 70-80 lakh, CDMA will
be between 15-18 lakh and the balance 10-15 lakh connections will be the
IDEA has agreed to
absorb all Escotel employees
Unlike most acquisitions
and mergers that are followed by massive retrenchment IDEA’s acquisition
of Escotel has not resulted in too many changes at the organisation level,
except for some top-level movements. This is because IDEA is said to have
agreed to absorb all Escotel employees. Also IDEA was not operating in
any of the circles where Escotel was the service provider.
IDEA Cellular buys
out Escotel Mobile Communications
IDEA Cellular Ltd. has bought
100% of Escotel Mobile Communications for an enterprise value of around
Rs.1,150 crore, of which Rs.275 crore will be paid by cash and the balance
Rs.890 crore by debt route. This is one of the largest acquisitions in
the Indian wireless Industry including 6 telecom circles with over 8,25,000
cellular subscribers. With this IDEA would be covering around 60% of India’s
population and over 65% of the potential telecom market.
AirTel launches MMS
AirTel is launching its
first ever Multi Media service (MMS) downloads in Tamil on Pongal. AirTel
subscribers could log on to www.airtelworld.com to access Chennai's Masala
portal for Pongal greetings. However, to avail this service, the customers
need to have an MMS-enabled handset and should have subscribed for the
service. The downloads would be free.
Bharti expands its
senior management team
Planning to get into six
new circles, Bharti has added four senior management officials in last
two weeks. The four new faces are Ms.Vijaya Sampath who has joined as corporate
director and general counsel, Mr. Deepak Mehrotra who will be COO of Karnataka
circle, Mr.Vivek Bali has joined as senior vice-president & consumer
business head and Mr. Sunil Tandon who is going to be senior vice-president
& head of national key accounts.
Reliance prepaid with
free talk time
Reliance Infocomm is planning
to launch its prepaid mobile service between January 15th and 18th. The
company is likely to offer a minimum Rs.1500 worth of free talk-time as
part of its prepaid promotional offer for an unspecified period. Free prepaid
talk-time options in Rs.1500 - Rs.4000 range will be bundled with multiple
CDMA handset offers. This implies that the Reliance prepaid customers will
have to pay upfront the full price of the handset of their choice to activate
their connections. Free talk-time can be used to make local and STD calls
besides sending SMS although ISD calls are not allowed on this free talk-time.
Local and inter-circle STD calls will be priced at Rs.2/min while local,
national and international SMS will cost a flat 50 paise per message .
The selection of handsets
include Motorola 131, LG 2030, Nokia 2280 and Samsung 191 CDMA handsets
on "a right to use basis" which will be priced in the range of Rs.4,500
to Rs.6,500. According to sources RIM prepaid recharge vouchers will come
in three denominations - Rs.250, Rs.500 and Rs.1000. Initially, the RIM
prepaid connections will be available nationally at the 250 Reliance Web
20 m CDMA base in 2004
Encouraged by TATAs and
Reliance's push for CDMA, Qualcomm projected 20 million CDMA subscribers
in India by the year end. The company expects the two operators to promote
its software platform BREW, which helps develop and deploy over-the-air
data services and applications (music, video, e-mails, games etc.) alongside
the currently prevalent Java, in the coming months.
Shyam Telecom to buy
Shyam Telecom, which had
the first right to buy Canada-based TIW’s 27% stake in Hexacom, has exercised
its right. Shyam Telecom and the Government owned Telecommunications Consultants
India Ltd had first right of refusal and if TCIL exercises its right of
first refusal, then the TIW stake would be equally divided between the
two companies. Hexacom is one of the best-managed telecom operators in
the country. It is a debt free company. At a valuation of $22.5 million
for the 27.5% stake, TIW’s total valuation comes out to be more than Rs.370
crore. Following these developments Bharti has decided build its own mobile
network in Rajasthan through its own licence for which a letter of intent
is already in hand.
may get cheaper
Government has announced
a cut in customs duty on mobile handsets to 5% and abolish the 4% SAD (Special
Additional Duty). Following this the prices of mobile phones in the legal
market are likely to come down by 8% -10%. Bigger price differential is
expected in the high-end mobile handsets that are GPRS and MMS compatible
or the camera phones. Indian Cellular Association, an apex body for cellular
handset manufacturers in the country now expects that the grey market would
be destroyed completely and the legal market for handsets would grow from
the current 50% to 80%. Their estimate is that 26 million handsets would
be sold in 2004. Exemption in customs duty is also granted to specific
infrastructure equipment, which will enable service providers to cut down
their costs and ensure a speedier rollout/upgradation of services.
Teledensity in India
According to the latest
figures released by the COAI and ABTO, total GSM cellular subscriber base
has reached 21.99 million while the CDMA subscriber figure (excluding
BSNL and MTNL) is at 6.19 million. 12.71 lakh additions took place in the
GSM segment while 4.2 lakh new subscribers joined CDMA base last month.
Combined together Reliance Infocomm has a 62.46 lakh subscriber base (55.71
lakh CDMA and 6.75 lakh GSM) followed by Bharti with 55.01 lakh (GSM),
BSNL 47.70 lakh (GSM), Hutch 41.16 lakh (GSM) and Idea Cellular 22.41 lakh
(GSM). TRAI reports that with this kind of growth in the cellular subscriber
base, the addition of total telephones (including landlines) exceeded 20
million in the year 2003. Thus total tele subscriber base has gone up to
around 70.5 million achieving the teledensity target of 7% which was targeted
for March 2005.
12 lakh GSM cellular subscribers added last month
community added 12,71,338 new GSM subscribers last month according to latest
figures released by COAI. Leading the competetion, Airtel and Hutch added
326741 and 311815 subscribers followed by IDEA, BSNL and BPLmobile which
added 160547, 143720 and 116404 subscribers respectively.
Ruias acquired over
30% in Hutch (Kolkata)
Ruias of the Essar group
have acquired just over 30% in Hutchison Telecom East through the group's
telecom arm, Essar Tele-Holdings, in an all-stock deal. Essar and Kotak
Mahindra together will hold 51%, while Hutch will continue to hold 49%.
SMS from landlines
MTNL has started a short
messaging service (SMS) from landlines where MTNL users can dial 1501 and
leave a message with the operator, who will forward it to the receiver.
The sender will only be charged the cost of the call.
MTNL wins licences
MTNL has won licences for
operating GSM, WLL(CDMA) and ILD services in Mauritius and for providing
fixed line telecom services in Kenya. It is already providing CDMA based
mobile services in Nepal. The company also plans to bid for licences in
the Persian Gulf and CIS countries. The company has a cash reserve of Rs.2,300
crore. The investments in Mauritius will be to the tune of Rs. 100 crore.
In Kenya, MTNL would be in a joint venture with Telecom Consultants India
Ltd and a local partner. It would have 40% stake in the company.
V K Munoth, only Indian
Sales of V K Munoth, only
Indian mobile brand is growing slowly but steadily. The brand was launched
eight months ago. Sales are in the range of 1,000 pieces each month. Munoth
offers a single clam shell (flip cover) design model, in two variants,
at Rs.12,900. The company plans to introduce
low end cell phones this year in the price range of Rs.4,000 - Rs.5,000.
The company is Chennai based.
SMS was the prefered
mode for saying Happy New Year!
Saying Happy New Year through
SMS was the most prefered way this season. In Mumbai, Airtel recorded an
increase of 2.5 to 3 million SMSs on 31st and 1st. BPL mobile also gave
the figure of 2.5 million messages on these two days while normal SMS traffic
on a service provider in metro is around 1.25 million. MTNL also recorded
double SMS traffic on both its GSM and CDMA services.
IDEA joins the price
war in roaming
IDEA announced its national
roaming at Rs.1.99 per minute to its post-paid subscribers in all five
circles namely Maharashtra and Goa, Gujarat, Andhra Pradesh, Madhya Pradesh,
Chattisgarh and Delhi. Monthly rental is Rs.25. Subscribers can use outgoing
and incoming local calls to any cellular, WLL or a landline at Rs.1.99
per minute while roaming. Outgoing STD calls to any GSM mobile or
to a landline or WLL phone within 200 km is also available for Rs.1.99
per minute. The outgoing STD call rates while roaming for a distance between
201 to 500 km is Rs 2.99 per minute, while the rates for distances above
500 km is Rs. 3.99 per minute.
SMS at 25p
MTNL launched its new tariff
plans on January 1st. where it has reduced SMS charges to 25 paise from
the existing 50 paise. The cell-to-cell call charges are reduced to 90
paise per minute at an additional monthly fee of Rs.49. MTNL has also reduced
monthly fee for national roaming to Rs.30 per month while roaming charges
continue to be nill. The new tariffs are applicable for both pre-paid and
post-paid subscribers. MTNL has around 1.6 lakh subscribers in Delhi and
about 1.7 lakh subscribers in Mumbai. It has a capacity of 2.25 lakh subscribers
each in the two cities. The company is also increasing its cell sites to
make the service quality better.
TCIL may divest its
30% holding in Hexacom
The Union communication
ministry is seeking an independent assessment on the valuation of Telecom
Consultants India Limited’s 30% stake in Hexacom. Industry sources link
the move to a possible divestment of TCIL’s 30% holding in Hexacom. The
government is planning to appoint a financial advisor through the international
competitive bidding route. Hexacom operates cellular services in Rajasthan
and is a zero-debt company with 2.2 lakh subscribers.