Sunday, January 23, 2011

Plan to PostPone 4G

India's telecom watchdog (TRAI)Telecom Regulatory Authority of India  must postpone the consultation paper on 4G (LTE) considering the current financial health of domestic telecom industry.
None of India's telecom operators will be able to spend funds to buy 4G spectrum if the government decides to release spectrum through an auction. Most of the operators have burnt their fingers following the heavily contested 3G and BWA auctions last year.
Since operators spent $23 billion to buy 3G and BWA spectrum, most of the operators are yet to commence 3G services due to paucity of additional funds. Companies such as Reliance Communications and Tata Teleservices, BSNL and MTNL have launched 3G in select circles only. BWA launch by private operators will take more time. Telecom equipment vendors are concerned about the delay. Further delay will result into less support for GDP growth. If India is looking for regaining the 9+ per cent GDP growth, a part can come from the broadband-driven economy.
Scarcity of spectrum and the auction format had forced all telecom majors to place extremely high bids at the BWA auction and many withdrew later. If the government is looking at LTE auction in 2011-12, it will be not be a good idea. At this point of time, TRAI must consult with the industry to assess the priorities of operators. Operators should be looking for bringing down cost, recoup from 3G licence fees, improve profit margins, increase mobile broadband through different technologies and rural expansion.
Operators grabbed 3G spectrum at exorbitant prices as it was the last effort to get some spectrum from the government. There's no appetite left with the operators. Instead of a consultation paper, TRAI can get views from the industry on the preparedness of operators. Let us watch the 3G and BWA space. Operators will take 3-4 years to break even after launching wireless broadband services. Cash starved telecom equipment vendors, especially from Europe and the US, are not in a position to bail out Indian operators if they go wrong.
India's 4G spectrum consultation will be attractive to few LTE operators in international markets. But without the support of Indian telecom majors, they may not be able to make a mark in Indian soil. Indian operators, who missed out on 3G and BWA, are already reeling under pressure from 2G roll out obligations. So, where's the space for LTE? I am not against LTE. India should have leapfrogged. But 3G-BWA auction put us in a bad condition. We do not want to create telecom companies which can write off bad debts at the cost of shareholders. India must rethink on LTE / 4G plans.

m-BANKING!!! r u ready for it???

Airtel, Vodafone and Idea are rolling out mobile banking services, but it remains to be seen how the concept catches up with consumer interest in 2011.
Mobile phone penetration is set to reach 60 per cent of India’s population in 2011, but banking touch points lag at about 0.07 touch points per 1,000 people, said a Deloitte-Assocham’s estimates.

However, with telecom and banking majors stepping up mobile banking services, 2011 is poised to be the year that would transform your banking habits — making payments or checking your account balance on your mobile. Yet, currently just about five per cent of all mobile subscribers are registered for mobile banking and more significantly, only 0.5 per cent actively use mobile banking (as per industry estimates), the customer base is woefully small.

But telecom players exude optimism about the platform providing business, financial services and insurance (BFSI) on mobiles. Ambrish Jain, director (operations), Idea Cellular says: “At Idea, we have an agreement to run a pilot project for various banking applications like branchless banking, payments etc. At an industry level, we add about 15-20 million new mobile subscribers every month. Even if a fraction of the over 700 million subscribers in the country take the service, it will be a good beginning.”
Recently, Bharti Airtel and State Bank of India announced a deal to offer mobile banking services. Separately, Vodafone Essar, too, tied up with ICICI Bank to offer mobile banking products. Axis Bank has signed a Memorandum of Understanding (MoU) with Idea Cellular where Idea will act as a Business Correspondent of Axis Bank to provide a range of financial products and services offered by the bank, through the mobile operator’s retail outlets.
Not to be left behind, Union Bank of India recently tied up with Nokia and Obopay to roll out their mobile banking services. Deepak Chandani, CEO of Obopay says: “Mobile banking is going to be the next revolution in the telecom and banking sectors and almost all companies are tapping this segment for its obvious advantages.”
Most banks in India, including Standard Chartered, HSBC, Kotak and Yes Bank, provide SMS alerts on your mobile: credit/debit information and cheque status.
The good news is…
Banks are clearly kicking their heels to service new customers on the mobile network. S K Mitra, president (agri business & rural banking), Axis Bank says: “We were keen to adopt additional delivery channels to drive financial inclusion and particularly keen on a mobile-based channel, considering the reach and the low-cost service delivery platform.” Mitra says only 41 per cent of the adult population has bank accounts, whereas more than 70 per cent of adults own a mobile connection — associating with a telecom service provider is therefore the right choice.
Parents and the elderly are more likely to use mobile banking to pay utility bills, person-to-person payments to merchants and send money to their relatives. Youngsters use mobile banking primarily to recharge or top-up their cellphones or pay for caller tunes etc,” says Chandani.
In India too, remittance services via mobiles, banks and other financial institutions can attract new customers to related financial products such as deposits, loans and insurance, articulates the Deloitte-Assocham report.
Samaresh Parida, director corporate strategy of Vodafone is hopeful that the company can leverage “a few thousands” of the 1.5 million retail outlets as Business Correspondents who are empowered to make or receive payments on behalf of the bank. “We will roll out the first phase of the mobile banking services along with ICICI Bank this year. The focus will be the unorganised sector like migrant labours that need money remittance services,” says Parida.
Countries like Africa are a successful example for most Indian telcos where mobile banking gateways have seen great success. A case in point is Vodafone’s mobile payment solution M-Pesa in Kenya, which has been cited as a driver for the doubling of bank accounts from six million to 12 million in a year.
Device diversity, Paperwork might play a spoilsport
Telcos are concerned that the existing identification processes (i.e. Know Your Customer or KYC norms) might keep the rural or semi-urban users away. “A mobile account, which every user has to open for mobile banking and transactions, should be approached differently than opening a bank account to ensure profitability,” says Parida of Vodafone.
RBI requires all banking customers to abide by strict KYC and anti-money laundering norms. “These norms will be a major challenge for rural customers to fulfil as they usually do not have the requisite identification documents (address proof, ID proof, etc.) Although, the Unique Identification Authority of India (UIDAI) will start issuing unique identity numbers to Indian residents by February 2011, the government may consider relaxing KYC norms for the rural population in order to promote financial inclusion,” suggests Sachin Sondhi, senior director, Deloitte, India.
But the solutions are being worked out. Recently, an Inter Ministerial Group (IMG) constituted by the Cabinet Secretariat said mobile banking users should be provided a mobile linked no-frills account (like a regular ‘No-Frills’ bank account) where the maximum value of each kind of transaction (deposit/withdrawal/transfer) will be Rs 5,000 per day and Rs 25,000 per month. IMG has also suggested that the 1.55 lakh post offices across the country should be used to provide banking services with the help of mobile phones the rural populace.
Sondhi of Deloitte estimates that SBI usually opens two million no-frills accounts every year. “With the scale that Airtel (telecom partner for mobile banking) brings, they are hoping to open approximately five million no-frills accounts.” As most of these new customers would be first-time banking users, they would need to be made aware of the mobile banking platform as well as about the best ways to use this innovative platform (this will help banks as the cost of serving a customer on mobile banking channel is typically 1/10th of the cost of serving them using traditional channels like bank branches).
Another worry is the diversity of devices and different mobile operating systems that exist today. Banks and telecom companies are expected to launch mobile apps, WAP sites that will run on all handsets and OSes, feel experts. Jain of Idea agrees: “Handset and OS diversity does pose a challenge. To overcome that, we plan to offer services via device and OS agnostic bearers like voice, Unstructured Supplementary Service Data (USSD, which is session oriented unlike SMS that is a store-and-forward, transaction-oriented technology) and SMS.” Idea will also deploy delivery channels like WAP portals and App Stores that dynamically identify the handset and offer the right compatible banking application for download.
But Sondhi of Deloitte warns: “There are genuine concerns about the security aspect of mobile banking and hence the rate of adoption will be gradual over the next five years.”
Plus, issues like complex and non-standard services, reluctance of customers to learn new technology, lack of pertinent initiatives from banks to move people to mobile banking channels, limited incentives for customers to use a new channel may also limit wide-spread adoption of mobile banking channels in the next two to three years.
Piloting a success story in mobile banking
Axis bank and Idea has flagged-off a “remittance pilot” between Dharavi in suburban Mumbai and Allahabad in Uttar Pradesh, which will enable money transfer using the mobile platform. During the “remittance pilot”, a remitter in Dharavi will be able to send money back home to his family in Allahabad. The remitters have the option of sending money to the beneficiary through either of the following routes:

  • Through ‘Account to Account Transfer’ whereby the remitter, having an account with Axis Bank, deposit money to the beneficiary’s account with the Axis Bank.
  • Through the Empays Payments Systems’ Instant Money Transfer (IMT) module whereby the remitter, with an Axis Bank account, remits money to the beneficiary, who has a registered mobile connection, even if he/she does not have a banking account.
Idea and Axis Bank will also explore extending the association to include other banking products and services like savings, credit, micro insurance, micro-SIP and micro-pensions in a phased manner.SOURCE

BSNL 3G services in all 760 cities soon

KANCHEEPURAM: The Bharat Sanchar Nigam Limited's target to roll out 3G services in 760 cities will be achieved by this fiscal, according to its Chairman and Managing Director Gopal Das.
Talking to mediapersons after a function on Rajiv Gandhi Salai in Padur, near Kelambakkam, on Saturday, he said the pan-India presence enjoyed by BSNL had helped in smooth and easy rollout of 3G services in 700 cities. In the remaining 60 cities, the 3G services would be rolled out by March 31, he said.
Earlier, he inaugurated BSNL's new broadband service offered through fibre-optic cables to the occupants of ‘Mantri' – a residential complex promoted by Mantri Developers. The new broadband service – Fibre to the Home (FTTH) – utilises fibre-optic cables and optical electronics instead of copper wire and DSL equipment, Mr.Gopal Das said. There were plans to provide FTTH service to high-end customers in 127 cities across the country.
The BSNL CMD also launched Smart Payphone Card services in Chennai Telecom District (CTD), where the phone card could be used to make calls from specially designed PCO boxes.
Chief General Manager of BSNL Chennai Telephones, A.Subramanian said the launch of FTTH would help improve business prospects of BSNL in the Chennai region.source

3G Services in a week - Airtel

With the government clearing decks for video calling on mobile phones, the country's largest telecom operator Bharti Airtel on Sunday said it will commercially launch 3G mobile services within a week. "We will make the announcement for the commercial launch of our 3G service in next six to seven days- Bharti.source

Rural India to drive mobile phone market growth

Rural India is expected to fuel the growth in mobile phone services in the next four years, as cell phones become a vital tool for the government in its financial inclusion programme, according to Global consultancy group Deloitte.
Deloitte said that low penetration levels of mobile phones would provide more business opportunities for service providers.
The paper focuses on how mobile phones can be used to deliver content and services that can help foster inclusive growth in India by digitally empowering citizens across all cross—sections of society, both urban and rural — This paper refers to these services as Utility mobile value added service (MVAS).
“The next wave of growth in subscriptions will come from semi—urban and rural areas. Today, the penetration of mobile phones in urban areas is already 100 per cent while in rural areas it is only 23 per cent,” it said.
The rural segment services includes selling and procurement information and support for farm commodities, educating farming community on best practises, delivery of healthcare and education to remote village via the mobile broad band network.
Mobile phone subscribers’ base has increased by 35 per cent between March 2009 and 2010 with an even higher increase in low—end subscribers and in rural areas.
Financial exclusion in rural India, which comprises 60 per cent of the Indian populace, is acute, with about 76 per cent of the rural populace facing financial exclusion.
It is increasingly difficult for banks to expand in rural areas because of various infrastructure, manpower, and operational problems.
RBI has focused its 100 per cent financial inclusion plan on the public sector Banks. SBI, the country’s largest public sector bank is currently piloting two initiatives for financial inclusion that are based on the mobile—platform.
SBI at present has a tie—up with two organisations for providing m—banking services in rural areas. Both initiatives were carried out in alliance with the application developers.
Initially, the 3G rollout is expected to be more focussed in urban areas—therefore the uptake of 3G services will be concentrated among urban subscribers, but with increasing coverage in rural areas the uptake among rural subscriber will pick up.
Consumers are also looking for diverse vernacular content at affordable prices — this would enable proliferation of 3G services across the country especially rural India. source