Archive for the ‘Telecom’ Category

3G Bidders

March 20, 2010

Economic Times, 10-Apr-2010

ET reports that a recent TRAI report  mentions of 150M users with data plans in India(!). I haven’t read the report. Will rock for the 3G bidders, if true.

Operator Subs. with Data Plans
Bharti 66.99M
BSNL 35.08
Vodafone 27.75
Idea 10.54
Aircel 2.19
Loop 2.18
Tata 1.23
MTNL 1.1
Spice 1.06
RCL 0.89
Sistema 0.01

Economic Times, 20-Mar-2010

Uninor MD Stein-Erik vellan told ET that he does not see a business case for participating in 3G. Uninor would like to see clarity emerge on the allotment of 2G spectrum before taking a 3G plunge. Frist launched in Japan in May 2001, 3G services are available in 90 countries.


Telecom Tower Business in India

July 26, 2009

Voice & Data, June 2009

Telecom Towers (2008-09)

March 21, 2009

All the leading Indian Telcos have split their Tower business into separate entities with Vodafone’s creation of Ortus Infratel. Vodafone’s 42% stake in Indus Towers (Bharti has 42% stake and Idea holds 16%) will be transferred to Ortus. A couple of days back, Wireless Tata Telecom Infrastructure and Quippo entered into agreement, with Quippo taking a 49% stake (and management control?) for Rs. 2400 crore.

(source: The Economic Times and RT Research)

New licensees (Unitech, Swan, Loop, STel, Datacom and Shyam Telelink) are getting close to finalising their launch dates, and Towers could bring in recurring revenues. Each Tower costs Rs. 25 – 35 lakh. Valuation has varied from 1.6 Crore when the Bharti and Reliance sold a portion to private investors to about Rs. 61 lakh for the Tata – Quippo deal. (In Dec 2007, Bharti sold 9% of Bharti Infratel for 1$B to Temasek, when it had about 30K towers. In Aug 2007, Reliance Infrastructure sold 5% to investors for 337.5B$, when it had 13K towers.)

Tower Data 2008

According to TRAI, India had 90K towers end of 2006. Government has a vision for 500Mn subscribers by 2010 and TRAI has used this to compute the number of towers reqd. at various times…In early 2008 it said, a total of 3.3M towers are reqd.

Telecom Deals in India

July 26, 2009

Nov 13, 2008 Business Standard – BS lists  a snapshot of the deals in the Indian Telco industry…

The TTSL and NTT DoCoMo deal has valued the company at INR 50,269 Cr, while picking up a 26% stake.  C. Sivasankaran had bought 8% into Tata Teleservices for Rs 1,200 crore in 2006. Temasek had paid Rs 1,500 crore for 9.9 per cent in the company, also in 2006.

India Telecom Deals, BS Nov 13, 2008 

Nov 5, 2008 Economic Times – India’s VAS market = $1.35bn; this is 9-10% of Telecom operators revenues; 44% is from SMS.- 20-25% of market share is occupied by RBT with 40-50Mn users

According to Global Telecommunication Services Industry Profile report by Data Monitor, Published April 2008
– TSP had 1,060 B$ revenues in 2007, giving it a CAGR of 5.9% for 2003 – 2007
– Europe had 332.9B$ rev, while APAC had 330.1B$
– Consumption volume increased by 11.7% CAGR between 2003 – 2007; 3.1B subscribers

Forecast for 2012 is
o 4.3B subscribers CAGR (6.7%)
o 1,263$B revenue

Market is segmented as
o Wirelines / fixed
o Wireless / mobile (533B$ in 2007, i.e 50.3% of revenues)
o Pagers and other cellular telecomm services

Mobile Number Portability (MNP)

July 26, 2009

October 2008: Malaysia conducted a 6 week trial launch of MNP from Aug 29 – Oct 6 initially for Prepaid subscribers in the Klang valley. Following this, it has launched nationally on October 15, 2008. A fixed charge of RM 25 would be incurred by the recipient operator. Porting requests have to be completed within 5 days. Talian Gerak Alih, which is acting as the Clearing House in MY will be paid a fixed fee by the operators. There were 12,000 portings during the trial period. MCMC has set a limit that telcos take only 100 requests / day during the trial, the operators obviously have handled more, and sounds initial success.

In India, TRAI has made recommendations w.r.t MNP in its letter to DOT, circa Apr 2008. According to this and the RFP floated,

  • An MNP Clearing House Authority be appointed through a competitive bidding process. MCHA will implement the NPDB, procedures for porting, recommend the interfaces, reconciliation mechanism for disputes, performance requirements, imp. timelines etc. etc.
  • It will recover the cost through the transaction fees from Service Providers
  • For porting, it has recommended first Break service connection at the donor service provider and then make at the recipient end – all within 2 hrs. (preferred 30 min.)
  • If the subscriber has any prepaid balance, it will not be transferred to the new SP
  • MNP will be implemented in metros first. However MCHA and NPDB will be a single entity at single place and should ensure scalability for country wide implementation after an year
  • No restriction on porting of numbers with dual
  • Most SPs have asked for no dipping charges for location routing numbers.- Each mobile operator will have its own local db for which downloads will be provided from central MNPDB. Fixed line operators may or may not use a local db, if not they can use Online NPDB for routing
  • All mobile operators shall implement direct routing i.e All Call Query method to route ported numbers
  • Service Area only – Intra circle porting (not sure about this?)
  • There should be a provision in the MCH and NPDB so that the donor operator shall not use the ported numbers till such time it is in use by the ported subscriber. After surrendering of number by ported subscriber, it shall revert back to original operator.

Some statistics from countries that have implemented MNP. Singapore introduced MNP in 1997; with HK, Netherlands and UK following suit in 1999. In the first 3 yrs, HK with a total population of 6.9M saw 5M subscribers switching operators! In the US, 7.8M ported their numbers in the first 12 months. MNP acceptance has been mixed. In HK, the porting process would be completed in 48 hrs; India has recommended 3 days; In the case of Italy, MNP did not take off – the recommended days to port was 15 days!! Again, in HK, MNP has reduced charges by about 60%. The HK Telecomm. Authority states that 91 – 97% of porting requests have been successfully between 1999 – 2006.
Most common reasons why Porting request is not honoured (European Conference of Postal & Telecomm. Admin):

  1. Subscriber hasn’t completed his contract
  2. Owes debt
  3. Handset has locked SIM
  4. Handset stolen etc.

Books Excerpts – You can Hear me Now!

July 26, 2009

Summary of the book “You can hear me Now – How microloans and Cell phones are connecting the world’s poor to the global economy” by Norman Sullivan. It captures the story of Grameen Phone in Bangladesh.

The story starts with one Iqbal Quadir, working on his laptop at Manhattan, it crashes. He feels frustrated while waiting for someone to recover – he has lost connectivity with people! “Connectivity is Productivity” according to him. His mind travels to the days in Bangladesh. One day, he travelled 10 kms to get medicine for his brother to learn the physician has gone to the neighbouring town to buy drugs!

Bangladesh has about 68,000 villages. Corruption is rampant in the country. It takes a lot of time to get things done – bribes, connections in political circles, government policies etc. 1993 – It was a time, when Grameen Bank started as a personal endevor by Mohammed Yunus in 1976 or so has grown and become well known. Yunus was the most heard Bangladeshi at that time for his Microfinancing scheme. His bank has built up a network of people, more so women in the villages who are acting as bank’s agents in disbursing and collecting loans. He even talks of credit worthiness – ability to return on what was borrowed – the return rate is very very high at the bottom of the pyramid. CK Prahlad in his book Bottom of the Pyramid talks of this – Connectivity for billions; retail selling to the bottom 2 Billion or so etc.

Quadir is a VC with a Wharton MBA, meets Yunus a couple of times in 1993 generally to see if he is interested in Telecom. These meetings are so-and-so. Around the time, Bangladesh govt. decides to approve the licenses for Telecom. Quadir gets into the act – he relocates to Bangladesh; marries a female cousin of his friend; pours his investement in a company he started with a friend.

People in Bangladesh react “what??”, “who would come and invest in the country??” to “why??”. The world has a different view of Bangaldesh – Floods, Corruption, Poverty etc. Quadir feels Nordic countries may be interested. They have been at the forefront of cellular communications; Norwegians generally like to keep it simple – known technology, suppliers and people… Telia is interested; Telenor says they are in if Telia is in. Grameen Bank at this stage is not the race for a stake but an investment.
Telia slowly backs out because at the same time India is going big in Telecom. Telia infact took 26% of Bharti Airtel those days and sold it in 2-3 years. SingTel has an investment in Bharti now. Quadir trips between Bangladesh and Norway. Hits it off with one of the guys there. He helps identify a couple of guys in Teleplan, who are instrumental in advising companies, establishing networks, strategies etc. They meet Quadir at Heathrow airport and fly to Bangladesh. On the way they discuss about how to we make it happen… Quadir feels very happy about these guy who are competent.

There is lot of menion of Sam Pitroda in the book – similarties between Sam and Quadir. Both of whom left their countries to come back with renewed interests. Sam obtained about 10 patents while working at GTE; established his own company and sold it to Motorola. When Mrs. Gandhi established a committee on telecom, he went and presented. He was isntrumental in manufacturing ditigal switches in Inida – 128 connections; 256 connections etc. which were later installed in villages…

They submit their bid for licensing with participation of about 51% from Telenor, 4-5% from Gonophone and about 25% from Grameen; 9% from a japanese company. Telenor has 3 board seats; 2 for Grameen and 1 for the japanese company. Quadir is given one of the Telenor board seats for 2 years. They establish a non-profit company called Grameen Telecom, which will buy licenses and give it at 50% to Grameen Phone. Grameen Phone is a for profit company, this model was suggested by Yunus. Joshua Mailman of the Social venture Network, provided seed capital for the project. Presently, Grameen Bank has 38% and Telenor has 62% of Grameen Phone.

They also decide to use the railway fibre infrastructure built at about 500MN and used by about 300 stations! in the country. One of the pioneers in Bangladesh had built it a few years ago. After several years, and avoiding several bureacracies they can use it! When the govt. gave the licenses, Grameen Phone was operational in 4 months – Mar 1997, while 2 other competitors started service after 1 year.
While Yunus has himself written a book on Grameen Bank, with a chapter on Grameen Phone this one focuses on how the Grameen Phone company was formed… Quadir left Grameen Phone in 1999. Harvard has a program called Social Enterprise initiative, which is chaired by Kastri Rangan. Quadir teaches “Technology and Econmic Development” at Harvard. He says poor countires need disruptive technologies such as cellphones.

The book mentions of

  • Three forces of External combustion – Information, Comm., Technology (ICT) brought in external investors…
  • Exogenous shock – referred by economists when an unexpected and uncontrollable external shock / forces act on a close system.
  • Inclusive capitalism spreads wealth. Connectivity equals Productivity; Productivity equals growth; Growth equals Poverty reduction.
  • some of the challenges in putting Grameen Phone together…- In Norway people have good technical experience w/o degree; whereas in Bangladesh people had degress and no technical knowledge!- Foriegn investors were in for profit, while Qaudir and Yunus were in for Development.
  • Some statistics…- 1% extra growth of GDP reduces the poverty by 2-3%; at the end of 2005, with competitionfrom Eqypt’s Oraqscom Grameen Phone acquired 1M customers in 6 weeks; 10% growth in teledensity increases the GDP of a country by .6%
  • If you have the will, people will come to you – don’t give up noble thoughts / deeds…

A fast and inspiring read on what it creates a Telco; more importantly working with for profit companies with a much larger cause in mind and overcoming obstacles over an extended period (6 years or so for Quadir)…!

India’s Wireless Growth… the Journey continues… Subs count…

July 26, 2009

16-Mar-2010: Reliance Comm. announced that it has touched 100M subecribers, becoming the 2nd in India after Airtel and 4th in the world in a single country (China Mobile and China Unicom).

Jul 2009:  Airtel crossed 99M mobile subscribers in May 2009. Though June 2009 are yet to be released by TRAI, they would have zoomed past 100M subscribers. They were about 67M in May 2008 i.e. acquiring 3M+ subscribers every month! The total telecom subscribers (both Wireless, Wireline) is 452M.

 March 2009: January 2009 was a great month for Indian telecom in terms of the mobile subscriber growth of 15M and the combined wireline and wireless subscribers it crossed 400M!

November 2008: October 2008 has been the best month in terms of number of additions this year with 10.4M new mobile subscribers. Airtel crossed 80M subscribers.

Mumbai and Delhi continue to provide an ARPU for Rs. 300+ to Airtel and Vodafone in Jul – Sep 2008 quarter. Roughly about 73% of the wireless customers are GSM subscribers.

The Indian Indian Teleco m growth story continues… acquiring 10M customers in September 2008. Business World dt. Nov 16, 2008 carried a cover story on Telecom growth in India touching 740M by 2012. A Raja, Communications Minister in his interview with “The Hindu” mentioned of “I am sitting on a golden goose”. While the country’s teledensity is 30% or so, the key is to understand what does it take to reach such stratospheric numbers… The rural teledensity is about 10%, compared to 65% in the Urban area. Roughly 350M people of the country are living in Urban areas and there is still some more room to grow and 3G is in the radar – what are the compelling reasons to buy and use one. A few studies have indicated that mobile phones do contribute to a better economic situation, the challenge will be much reduced ARPU; bringing communities of people together culutrally different with different needs etc.

China launched mobile services in 1988; India in 1995 – COAI sources.

October 16, 2008 – TRAI has released statistics for August 2008. 9.16M mobile subscribers were added in Aug 2008 (Jul 9.22M). Total telephone connections in India is 343.87M (140M in Mar 2006; 205M in Mar 2007) of which 305.24M are mobile subscribers, while wireline is 38.63M (decreased from 38.76M in July 2008. it was 40.30M in Jan 2007!). Teledensity in the country is 29.83%.

Total broadband subscribers are 4.73M (4.57 in Jul 2008).
India has the 2nd largest mobile subsrciber base in the world. (Jan 2008 data: China – 534M; US – 257M; India 242M)

September 23, 2008 – Financial Express
BSNL has 35M landline and 39M mobile subscribers in the country. Airtel has recently overtaken BSNL has India’s largest Telecom Service Provider in terms of subscriber base. BSNL has 36,000 towers in the country of a total of about 1.5M. BSNL is looking at Business process reengineering its customer acquisition and care process to reduce the time to provision a customer from 7 days to 1 day.

BSNL will spin off the Tower business, which itself could realize about 8 – 10B$. The reason for all Telecom Service provider companies to spin off their Tower businesses is due to paying / sharing fees on the Annual Gross Revenue.

August 2008
As this may sound good growth, China Mobile reports that it has 428M subscribers at end of August! China Unicom has 129M GSM (postpaid: 66.6M; Prepaid: 62.9M) and 42.4M CDMA subscribers (potpaid: 39.4M and prepaid: 2.9M) i.e. China has touched 600M subscribers!

Voice & Data Magazine publishes Operator wise subscriber details on the Indian subcontinent.
GSM subscriberbase touched 192.4M by the end of March 2008 with Airtel at 59.7M, Vodafone at 42.6M and BSNL at 34.6M. CDMA subscribers accounted for 65.4M with Reliance at 38.3M and Tata Tele at 24.1M.
Landline is at 39.4M + 261.1M cellular; Teledensity croses 26% reaching 300.5M telephone subscribers. In Sep 2007, Rural Teledensity was about 7% and urban at about 55%; Broadband subsrcibers end of Mar 2008 were – 3.90M and TRAI press release, Mar 2008

Indian Telecom is divided into 23 circles viz.,
Metros comprising of
1. Delhi
2. Mumbai
3. Chennai and
4. Kolkatta

Circle A
5. MH
6. Guj
7. AP
8. KTK
9. TN

Circle B
10. Kerala
11. Punjab
12. Haryana
13. UP-W
14. UP-E
15. Raj
16. MP
17. WB & A&N

Circle C
18. HP
19. Bihar
20. Orissa
21. Assam
22. NE
23. J&K

Aircel Innovation | Mumbai Ferry Ad and the Rains

July 23, 2009

Aircel – Primesite (Mudra’s Outdoor arm) converted Mumbai’s rain into a great Marketing / Corporate Social Responsbility opportunity!

Aircel Ad The hoarding at Milan subway in early July – “In case of emergency – Cut rope”.

Aircel Lifeboat turns into a Ferry On July 14th, Milan subway had water above one’s shoulders due to heavy rains. The life boat was cut out and made into a ferry, carrying people from one end to another end of the subway!

Smart Thinking!