3G Roaming Deal By Top Indian Operators

Three of India’s largest mobile operators – Bharti Airtel, Vodafone and Idea Cellular – have reportedly struck an intra-circle roaming agreement that will allow them each to offer a countrywide 3G service. In a statement to the Hindu Business Line, Vodafone said it “has entered into a bilateral roaming agreement with Idea and Airtel in circles where we have not built our own 3G network. With this agreement, Vodafone / Airtel / Idea will bring a pan-India experience of 3G services to their customers.” The other two operators have yet to confirm the deal. Last year’s 3G spectrum auctions saw all the country’s operators fall short of acquiring nationwide coverage. Bharti, Aircel and Reliance Communications each own 3G spectrum licences in 13 of the 22 telecom circles, while Vodafone, Idea and Tata each have licences in nine circles.
According to the Hindu Business Line, the latest deal will see Idea use Vodafone’s 3G services in Delhi and Kolkata circles, while Vodafone will use Idea’s network in Andhra Pradesh and Kerala – plus Bharti’s network in Uttar Pradesh (West). Bharti and Idea will tie-up in Karnataka and Gujarat. The report notes that the operators have been “tight lipped” about the specific commercial agreements in the roaming pact, notably with regards to pricing. “This sort of arrangement is relatively new in the Indian market. Perhaps operators want to be sure on the outcome before highlighting them,” said Gartner analyst Shaily Shah. She noted also that “more such tie-ups amongst operators are in the pipeline.” source

Idea plans 3G tie-ups to cover non-licence areas

India’s third largest mobile operator, Idea Cellular, hopes to gain hopes to gain significantly from mobile number
portability (MNP) that is expected to create a churn in 3G subscribers following a price war among operators.

Idea has already gained the most from MNP, with a net addition of 4 lakh subscribers, taking its total subscriber base to 89 million users. “Number portability is aimed at enabling customers to shift from one operator to another, irrespective of whether it is 2G or 3G services,” said Ambrish Jain, deputy MD, Idea Cellular, on Tuesday after launching the company’s 3G service in Andhra Pradesh.

Jain said Idea is also preparing to enter into pacts with select mobile operators for specific areas where it did not have 3G licence. “These alliances will enable Idea subscribers throughout the country to enjoy 3G services apart from deriving the benefit of national roaming,” he said without elaborating on the timeframe for these pacts to come into effect.

Last week, Bharti Airtel, while launching its 3G services in Hyderabad, also said that it was looking to partner with other mobile operators to offer services in areas where it does not have licence. Jain said margins of Idea Cellular were under pressure due to a slide in the average revenue per user (ARPU). However, he said, the company is optimistic about compensating for the decline in ARPU with increased revenue from value-added services, particularly 3G services. “A hundred-fold expansion in data usage, with the adoption of 3G services, is likely in three to four years,” he said.

While Idea’s ARPU at present ranges from Rs 172 to Rs 200, the 3G services are expected to arrest any further decline in average revenue per user.

The average spend on data usage in India is only $ 0.3 against the world average of $ 4 and $ 21 in Japan. Typically, data services account for 28 per cent of revenue and voice contributes the remaining 72 per cent. But this is likely to change in two years with data contributing at least a third of revenue, he said.

Idea Cellular had traffic of over one billion minutes per day as of December 2010, compared with 697 million minutes per day a year ago.

Jain declined to comment on the DoT’s intent to issue showcause notices to Idea with respect to overlapping of licences, saying “the matter is sub-judice”. In 2008, Idea had picked up a stake in Spice resulting in a situation where both Idea and Spice held licences in Punjab, Haryana, Maharashtra, Karnataka and Andhra circles. Idea maintained that it did not breach any licence agreement. In March, additional solicitor general of India Amarjit Singh Chandhiok suggested a penalty of Rs 300 crore on the company.source

Idea to take 3G to 200 towns of AP by fiscal end

Idea Cellular, the country’s third largest mobile operator, today launched its 3G services in 14 towns in Andhra Pradesh including Hyderabad, Vijayawada and Visakhapatnam, with plans to cover 200 towns in the state by the end of the current financial year.
Andhra Pradesh, with 8.5 million subscribers in 17,200 towns and villages, accounts for 10 per cent (Rs 1,600 crore) of the total revenues of Idea Cellular. The company has 6,500 cell sites in the state and plans to increase it substantially in the coming months, Subbaraman Iyer, chief operating officer (Hyderabad circle), told mediapersons here on Tuesday.


Stating that mobile data was the next growth area as voice revenue growth was flattening, deputy managing director Ambrish P Jain said 28 per cent of the entire telecom revenues came from broadband globally, which was expected to touch 33 per cent by 2013.

“Indian data ARPU (average revenue per user) is one of the lowest in the world at $0.03, as against an ARPU of $4 in the developed world. There is a high potential for data ARPU growth,” he said, adding that data currently accounted for 4 per cent of Idea’s revenues and its ARPU was between Rs 170 and Rs 250 depending on the circle.
Jain said the company was present in 11 circles now and intended to go pan-India with 3G, including in Jammu and Kashmir and Punjab, through strategic alliances by the end of this financial year.
“Currently, 10 per cent of our over 89 million subscribers nationally are using 3G-enabled handsets. There will be upgradation of handsets from time to time and we are in talks with mobile manufacturers to launch 3G handsets through combo offers,” he said while declining to draw any time line.
Replying to a query on mobile number portability (MNP), Jain said MNP had been very positive for Idea and the company had gained to the tune of 400,000 subscribers nationally.source

Travelling Numbers

Almost all mobile service brands say the much anticipated and much delayed mobile number portability is not going to be a game changer in their industry. And yet, not one of them is holding back on doing their best — in effort and expenses — to get subscribers to port from competing service brands best — in effort and expenses — to get subscribers to port from competing service brands to their own.

Idea Cellular started advertising before the launch of MNP in November 2010. By now, there is a communication deluge as MNP cuts across India. Leading players such as Airtel and Vodafone have gone aggressive across TV, print, radio, outdoor, at points of sale and online.

Newer entrants Uninor and MTS have been advertising over the past two months or so. To Idea’s celebrity endorser Abhishek Bachchan, Airtel has roped in AR Rahman, Shah Rukh Khan, Saif Ali Khan and Kareena Kapoor.

Vodafone has a TV ad featuring a kiddie photo session and hoardings welcoming subscribers to much better services and quality without changing their mobile numbers.

And riding on the din, though perhaps not specifically MNP-driven, is Videocon with its zero-paisa per second call offer — for the period of one year — on its TV ad and outdoor media.

So is it much ado about nothing?

Mritunjay Kapur, MD, Protiviti Consulting India (Protiviti is an international risk management and business consulting group), said, “Because one brand is doing it, others are also doing it. It’s a very competitive market.”  With as many as 15 mobile service brands fighting for business, no one would miss out on any action, not even in a market with a subscriber base as large as 75.22 crore as on December 31, 2010, according to Telecom Regulatory Authority of India (TRAI) figures.

Atul Bindal, president, mobile services, Bharti Airtel, said, “Pre-paid subscriptions make up 95% of the total mobile customer base in India. With already very high monthly pre-paid churn at around 7%, MNP will have very small impact at an industry level.”

Samaresh Parida, director, corporate strategy, Vodafone Essar, said, “In most countries where MNP has been launched, the action mostly lasted over three-four months, by which time subscribers settled down with the service of their choice.”

However, port-outs and port-ins are happening with every service, big and small. “We have seen 2,17,000 port-ins and 1,25,000 port-outs,” said Parida.

While attractive price deals are very visible, the bigger players insist that low pricing cannot be a sole driver for MNP movement. “We find customers changing operators due to network issues. Our research also indicates that they are switching operators because of service and not pricing issues,” Bindal said.

But, he added, “the possibility of ongoing tactical promotional offers at the local level cannot be ignored. As prices in India are already very low, there is no further scope for a sustainable price drop. With MNP launch, all existing operators will be working on improving their quality of services — network, customer service, products.”

“Customers responding to MNP are making more considered choices. Their requests are on network quality, service, brand strength and also tariffs,” Parida observed.

Rajat Mukarji, chief corporate affairs officer, Idea Cellular, said, “Consumers, our research shows, are looking for a pan-India network offering seamless connectivity; affordable, relevant products and service offerings; accessible and humane customer care; accurate billing systems; voice clarity; and no call drops. These are the key parameters for satisfaction and will ultimately be the deciding factors for exercising choice, post MNP. These were the highlights on our ad campaign, with its key message, ‘No Idea, Get Idea’.”

Newer operators are, however, more upbeat on the mix of attractive pricing and less cluttered networks since their subscriber bases are smaller.

“We expect MNP to boost our subscriber base. January-November 2010 TRAI numbers show that 14% of incremental subscribers were brought in by new operators. Post MNP, 60% of our port-ins were GSM consumers. The new operators received licences at varied intervals between 2008 and 2009, so their achievement is even more significant,” said Leonid Musatov, chief marketing officer, MTS India, which offers CDMA services.

Olav Sande, EVP, western circle, Uninor India, said dynamic pricing has worked wonderfully for Uninor. “We see MNP as an excellent opportunity to grow. In itself, MNP is not a basic need. The basic need is the attractiveness of the plan in terms of price and the services we offer on that plan,” he said.

Every mobile service brand wants the high ARPU (average revenue per user) subscriber — who is mostly a post-paid customer — but is not averse to lower revenue customers too.

Parida explained, “Naturally, I would give higher priority to my high ARPU customer. Below that, based on usage segmentation, I would offer different services to different customer sets.”

Airtel’s Bindal was more direct: “We remain focused on delivering complete ‘value’ as against offering just the price proposition. We hope to acquire few customers in the category of deal seekers that keep switching operators depending upon ‘offer of the day’ schemes. Our early analysis indicates that among MNP port-ins, Airtel is getting disproportionate share of high value customers from other operators.”

Does MNP impact anything then? Protiviti’s Kapur concluded, “It gives consumers choice. It puts greater pressure on mobile service operators to improve their products, services and quality. Overall, MNP can create better balance in overall deliveries. Consumers gain.”source

Old Telcos Likely To Challenge TRAI Fine

 Old telecom players — Bharti, Idea and Vodafone are considering a legal challenge against Trai’s recent recommendation to levy heavy spectrum charges on them. Trai has recommended this penalty for excess spectrum held by these companies.

The CAG, which had pegged the exchequer’s loss due to the 2G scam at Rs 1.76 lakh crore had also ascribed Rs 37,000 crore of the total to the excess spectrum held by these firms. “If the telecom department accepts the Trai recommendation, we will have no choice but to challenge them in the courts. The Trai recommendation are unjust and the charges they have announced are too high,” said a senior official from a telecom company.

In fact last year Bharti, Vodafone and Idea had challenged in TDSAT, Trai’s recommendation which had first talked about levying one time charge on these old telecos for the spectrum they hold beyond 6.2 Mhz based on the price discovered in then on-going 3G auction. These companies were forced to withdrew their petition because at that time telecom department had not accepted these recommendations and therefore the petition was not “maintainable.”

However, then Trai on its own had told the telecom department that it will study the matter in detail and will give recommendations separately on how to charge the spectrum beyond 6.2 Mhz. Last week, Trai finally came out with its report recommending that companies be asked to pay Rs 4,571 crore for every MHz of spectrum they hold on a pan-India basis over the contractual limit of 6.2 Mhz.

The government is expected to get additional revenue of Rs 16,000 crore if it accepts these recommendations, an analysis by Emkay Global Financial Services shows. BSNL, which holds the maximum amount of additional spectrum, will have to pay Rs 7,000 crore. BSNL has excess spectrum in 19 circles (61 Mhz), Bharti in 13 circles (32 Mhz), Vodafone in seven circles (19.6 Mhz), Idea in six circles (12.6 Mhz), MTNL in two circles (12.4 Mhz), BPL in one, Reliance in one, Aircel in one and Spice (now Idea) in one, according to CAG report.source.

Analysts are not recommending Airtel, Idea and Reliance.

Despite a sharp fall in telecom share prices, analysts are not recommending Bharti Airtel, Idea Cellular and Reliance Communications to investors. Following the Telecom Regulatory Authority of India's (TRAI) recommendation of a steep hike in 2G spectrum pricing, wherein telecom companies have to shell out additional Rs 16000 crore to the government, the telecom stock prices took a severe beating. The telecom stocks were one of the biggest losers on Thursday's trade.

According to analysts, no fresh buying is recommended at the current level. With an estimated price earning ratio (PE ratio) of 26.1x in FY11, Idea is recommended for sell. For Bharti Airtel, investors can hold on with an estimated PE of 20.4x, as suggested by Emkay Share.

“Telecom companies would not agree to the re-pricing proposal by TRAI. The proposal does not seem reasonable. Unless there is clarity on the re-pricing issue, no fresh entry is recommended. Market has already factored in the re-pricing issue. However, there could be further down falls based on the final outcome,” said an analyst on condition of anonymity.

TRAI has sent a final recommendation for re-pricing of 2G spectrum. This was a further intimation to recommendations made in May 2010 for re-pricing of spectrum above 6.2Mhz. Re-pricing is recommended for the remaining period (7 years) of spectrum at the price discovered in auction of 3G spectrum.

If implemented then it would erode profitability of Bharti and Idea with yearly outgo of Rs 580 crore and Rs 230 crore, respectively for 7 years. Cost for Reliance Communication is expected to remain miniscule at Rs 2 crore, according the Emkay research note.

Shares of Bharti and Idea ended at Rs 322.80, down 2.81%, Rs 65, down 1.89% respectively. RCom, however, was at Rs 96.25, up 1.69% at the close of day’s trading on NSE. The stock prices Bharti Airtel, RCom and Idea have corrected 15% on an average in last one month.source

Idea, RCom, Bharti, MTNL react to TRAI recos

 In a development that has huge financial implications for existing as well as new operators, telecom regulator TRAI has recommended fixing the price for 6.2 Mhz of pan-India start-up 2G spectrum at Rs 10,972.45 crore, more than six times the present cost of Rs 1,658 crore. 

In its recommendations to the Department of Telecom (DoT), Trai has also said that every Mhz of additional spectrum (on an all-India basis) beyond the contracted limit of 6.2 Mhz would cost a massive Rs 4,571.87 crore.

Most of the telecom firm, including Bharti, Vodafone , Idea and state-owned companies like BSNL and MTNL, hold extra spectrum beyond 6.2 Mhz and the new norms would put a huge financial burden on these telcos. 

Shares of Bharti Airtel were at Rs 333.65, up 0.11 per cent on the NSE . The scrip touched a low of Rs 324.65 and high of Rs 336.70 in trade so far. 

Idea Cellular was at Rs 66.55, down 1.85 per cent on the NSE. The scrip touched a low of Rs 65.40 and high of Rs 68 in trade so far. 

Reliance Communications was at Rs 108.35, down 1.90 per cent on the NSE. The scrip touched a low of Rs 105.15 and high of Rs 109.80 in trade so far. 

MTNL was also witness profit booking. The stock was at Rs 42.85, down 2.83 per cent on the NSE. The scrip touched a low of Rs 42 and high of Rs 43.60 in trade so far.source

Movement From Voice to Data in INDIA

The question telecom experts are debating today is at what speed will the Indian consumer move from voice to data

All telecom experts today agree that Indians will increasingly start using mobile broadband services — on their smart phones, their netbooks, and their tablets. The question to which the telecom titans do not have any answer is which technological route the majority of Indian consumers will take to access mobile broadband. Will it be the 3G services being offered by the big GSM boys like Bharti Airtel, Vodafone or Idea? Or will they adopt evolution video data only (EVDO), the high speed data being offered by CDMA networks like MTS or Tata Teleservices? Or will they completely switch over to long-term evolution (LTE) technology — the 4G technology through which Mukesh Ambani wants to re-enter telecom.

That is the multi-billion dollar question. Multi-billion dollar because different players in the Indian telecom arena are betting those amounts on their chosen technologies — and hoping that they will be able to persuade the Indian consumer to choose their technology over the ones their rivals are offering.

This story actually started a good 15 years ago. In July 1995, when the first mobile phone call was made in the country from Kolkata, no one had dreamt that this would alter the communication landscape in the country forever.

At over Rs 40,000 for a handset and equally expensive talk time, mobile communication was a privilege that only a select few enjoyed and many aspired to. But as service tariffs crashed and phones became affordable within a few years, a wave of consumers, tired of waiting in queues to get a fixed line phone connection, embraced mobile communication with great alacrity. And a communication revolution was well on its way.  

MATCH POINT
PLATFORM	SPEED
GSM	9.6 Kbits/sec
GPRS	40 Kbits/sec
3G	1.8-14.4 Mbps
EVDO	3.1 Mbps
LTE	50-300 Mbps
Note: Actual speed could be much less depending on towers and number of customers

Eight years on, in 2003 to be precise, Mukesh Ambani tried to change the rules of the game by urging customers to shift from just making voice calls on the mobile phone to using data and internet on his CDMA platform. And he tried to do so through aggressive pricing. As part of his much vaunted “Monsoon Hungama” scheme, customers had to pay Rs 500 to lay their hands on a mobile phone bundled with data freebies like streaming television programmes, downloads of movie video clips and music and games to name a few.

The magic worked, but in part. Ambani did manage to rope in millions of customers. But his strategy to bring about a data revolution on the CDMA mobile platform, which would give him 30-40 per cent of his revenues, failed to take off as he gave away his telecom venture to his brother Anil after a bitter family battle.

As it turned out, for the bulk of the customers it was voice that reigned supreme. And despite over a dozen-odd mobile players in the market, real data services (excluding SMSs and caller tunes) currently contribute a mere 3 per cent to a telecom company’s revenue.

Game for more So did Mukesh Ambani misread the market? Or was he ahead of his times? In 2011, no one is asking those questions or doubting that a second revolution in telecom is well under way — with mobile broadband data ready to sweep customers off their feet. Telecom companies realise that voice is just a commodity in which margins will be under pressure. In such a scenario, the only way to arrest the decline in average revenue per user (ARPU) is to hook consumers on to data. Given that, the debate today is largely about the speed at which Indian customers will move from voice to using data on the mobile.

The change could be dramatic. Customers will soon be spoiled for choice with as many as eight operators offering them an array of technological options — 3G, 4G, LTE or EVDO — to get high speed broadband on their laptops and phones. At average speeds well above 2 mbps — nearly four times faster than what you are used to — consumers can watch live TV, make video calls, download music, make bank transactions and commercial deals, get online education lessons or discuss their problems with doctors sitting in another part of the country. Says Kanwalinder Singh, president of Qualcomm India, a key player offering technology for mobile broadband, “A data revolution, just like the voice revolution some years ago, is set to break out in India.”

More importantly, for the first time the gap in mobile technology offered by Indian companies and those abroad will be bridged completely. While customers in the country are at least four to five years behind in savouring 3G services, Indian telcos are expected to roll out 4G operations within a year of its global launch.

There are worries nonetheless. One, that the 3G services would be expensive as operators have paid staggering amounts for the spectrum — a total of Rs 67,000 crore. But if the tariffs offered by Reliance Communications and Tata DocoMo — players that have started offering services — are anything to go by, the fear seems misplaced. In fact, data tariffs that have been bundled with voice are highly affordable and even cheaper than 2G offerings for those who have higher ARPUs. The two operators have been able to rope in over two and a half lakh 3G customers in the first month of their operations despite that some killer services like video calling had not been activated for weeks due to security issues.

By October/November some of the broadband wireless access services (BWA) licensees are expected to offer 4G services through LTE technology which promises even faster data speed to many more consumers.

With Mukesh Ambani back in the game with a pan-India licence and spectrum for BWA, observers say he just might kick off another price war in the mobile data space like he did in voice in 2003. He will be at an advantage over his 3G rivals — he has got more spectrum (20 MHz) than his GSM 3G rivals (5 MHz) and at a cost that is fraction of what his rivals have paid. But he has a problem as well: The technology that he proposes to use is still under commercial deployment in some parts of the globe and its efficacy is yet to be tested unlike 3G, which is well established and has a large consumer base.

Still, to add to the good news for the consumer, if the telecom regulator and the government are able to push through things, there will be more spectrum available for auction next year for 4G services and another three to four operators can easily jump on to the speed bandwagon. Last but not the least, CDMA players like MTS are dramatically shifting their strategies by moving out of mobile voice services and pushing for data by offering EVDO dongles at high speeds that match those of the 3G players.

To make the data revolution a reality companies are together investing over Rs 1,50,000 crore. And they are doing so because they are sure there is a large market waiting to be tapped. Says Ericsson India Vice-president P Balaji, “In the next three to five years there will be a data market of 300 to 350 million subscribers. And we will see revenues from value-added services, which stand at 10 per cent currently, go up to between 25 and 30 per cent.”

Supporting the effort are device makers offering larger screens to push mobile data at affordable prices. So as Apple’s iPad made an official launch in the country last week, Samsung dropped the price of its Galaxy Tab to an attractive Rs 29,000 from a steep Rs 38,000 earlier.

Falling prices Will broadband wireless be dominated by GSM players like Bharti, Vodafone, Idea or Tata Teleservices that already have a large subscriber base? Or will the market be led by Mukesh Ambani who has no legacy issues or subscribers but a new technology that offers more speed than 3G but needs to be tested across the world? Or will it be won by incumbent CDMA players like MTS, which have the advantage of a pan-India network that others would take years to build?

LTE players have one key advantage — more spectrum at less price compared to their 3G rivals which helps keep costs lower. Says Kanwalinder Singh: “What this (more spectrum) means is that you can offer broadband to a larger number of people at speed similar to that of 3G but at a more affordable price because of the bigger volume of customers. Also it is possible for an LTE player to install a pan-India network with nearly half as many towers as would be required for 3G. And one can do that quickly by just leasing out capacity from large tower companies that have spare capacity rather than build it from the scratch.

But they also have many disadvantages — mobile devices on LTE are still not available around the world and most telcos are offering only dongles. Also consumers looking to use the device for voice won’t be able to do so. Until, of course, government changes policy and allows voice over internet protocol telephony between a PSTN (public switched telephone network) network and a LTE device. Currently, only device to device internet calls are allowed.

More importantly, prices of LTE devices, unlike 3G phones, will be steep — as high as Rs 25,000 which would be out of reach for most customers. In contrast prices of 3G devices are falling. Qualcomm, which makes 3G chipsets, is already working on smart phones below Rs 5,000. For sub-Rs 5,000 3G feature phones with speed of 3.2 mbps, Qualcomm has joined hands with companies like Micromax and Spice Mobile that offer such products.

Qualcomm’s Singh says that with more operators going in for LTE, the price of such devices should fall to, say, Rs 13,000. Also companies like Qualcomm are working on chipsets for mobile phones in which you can move seamlessly from 2G to 3G and LTE. The expectation is that the 5 MHZ spectrum with 3G operators is not enough and there will be congestion in such networks within a few years if not months. So 3G operators might have no option but to tie up with LTE operators especially in larger cities so that they can offer their customers high speed data services without a glitch.

Winners & losers But GSMA operators say they have at least a two-year head start over the BWA players. Says Samaresh Parida, strategy director at Vodafone-Essar, “BWA on LTE is still some distance away.” More importantly, they also believe that with more spectrum expected to be available in 2012 for auctioning in 4G, BWA players will cease to enjoy any special advantage.

3G operators are already honing their strategies to woo customers. Parida says that one large market which they will tap for 3G comprises PC users — over 35 million who use either laptops or desktops. It is also the market which Tata Teleservices is planning to concentrate on in the belief that at least 60-70 per cent of the initial revenue in 3G will come from dongles. Most of the dongle market is currently in the gri  ps of CDMA players as GSM was not able to offer high speeds in 2G. But with 3G that has changed. To top it all, prices for dongles are sliding — it has crashed from Rs 5,000 to Rs 2,500 already.

Vodafone-Essar’s Parida says new markets will open up — one such comprises customers who want to use 3G devices but communicate in their regional language. With phone devices now available with virtual key boards on the screen, it’s easy to create key boards in different languages.

But 3G players are already facing a tough challenge from CDMA players who are increasingly shifting to data. Sistema Shyam which sells under the MTS brand, for instance, has dedicated half its spectrum to data and is pushing sales of EVDO dongles rather than just go for voice. The strategy is clear, says Vsevolod Rozanov, president and CEO of company. “Currently 10 per cent of our revenues come from data; we expect that to go up to 25 per cent by the year end. We have 4.5 lakh dongle customers already.”

Can he take on 3G operators? Rozanov says that he might not have the 3G spectrum but that does not bother customers because he ensures he offers them similar average speed. He also points out that he is well ahead of his 3G competitors in terms of network roll out. “We have four times the number of BTSs (base transceiver station or cell site) that 3G operators have. It will take competitors time to build a similar pan-India network.” Plus he is now coming up with MTS-branded smart phones which will be within Rs 5,000 for customers to do data on the move.

Surely, for mobile operators facing margin pressures, data revenues could change the game in 2011. And for Indian consumers the mobile data revolution could fundamentally alter the way they live and work.source

IDEA not happy with GOVT and POLITICIANS

Sorry for the late post but life is turning into a hell with Governance Deficit and Paralysis of Policies headed by one of the Weakest Prime Minister’s in our History.
In the Conference Call hosted on the 25th of Jan, Idea Cellular Management expressed their unhappiness over the Government’s reluctance to indulge Operators and various stake holders in talks. They hoped that the Minister will take inputs but my guess is he didn’t. I am not an advocate of Idea Cellular nor have any interest [direct / in-direct got nothing to do with them], but in the past 2 / 3 years they have repeatedly written to the Telecom Ministry and on some occasions even to the Prime Minister to come with a complete road map for the sector yet the the Puppet like Prime Minister chose to ignore their requests.
Idea Management also expressed the following views, [My Comments in Italics]

• There must be efficiency at National Level with Multidisciplinary committee
• Competition does not increase when operators go from 6 to 16
• As sector evolves, command and control must be market based. Regulator must be able to act freely [Regulator is to write regulations, some Regulators are influenced by their ex-chairman now working for Nira Radia.  Based on the kick-back the Politicians and Bureaucrats receive, rules of the game will be tweaked]
• Telecom cannot be governed by Media [Nira Radia / Barkha Dutt / NDTV] or Parliament [ ufff Politicians]. Special institutions must takeover and it should be evaluated on how they should be funded [Somebody like Nandan Nilekani should be asked to Head such a institution along with Academic Researchers]

The management which is taking directions from the toughest Chairman of the Aditya Birla group, Kumarmangalam, has been able to cut costs and increase efficiencies at all levels since they need to survive the major shakeout with just plain vanilla Wireless services. Some of the other things discussed in the call by the management are as follows,

• ARPU is higher than Telecom Sector’s Average.
• Mobile Number Portability will not be a game changer and Strong Brands will be net gainers
• 3G launch in 11 cities very soon and nationwide roaming arrangements in place.
• Idea’s network now carry 1 Bn minutes a day of Voice making it amongst the Top 10 operators globally in traffic
• Further CAPEX will depend and will be directly proportional to the profits and Cash Flow
• Idea Cellular has tied up with Axis bank to encash upon the m-commerce opportunity. RBI wants to get most of Indian Population into the banking stream and hence is utilizing the reach and network of Telecom companies. Regulations are evolving with respect to settlement, KYC, UIDAI etc. Idea thinks that m-commerce roll out is still 9 to 12 months away.
• Data Usage on Idea Network has shot up but no details were given due to competition.
• To a question on doubling of subscriber acquisition by Merrill Lynch Analyst, Reena Verma, the management didn’t give a satisfactory answer in my view and took shelter under the excuse of seasonality as the Analyst questioned, if their were any strategies the management had adopted, what was stopping them from being implemented earlier

And finally, the Telecom Sector is a mess which I don’t have to explain. I am not really excited to write a lot on this as the stake holders lack the attitude to move ahead in life and grow that you and I have. My priority is something else now, so if time permits, will share my thoughts source

Q3 Group Profit of Rs.243.05 Cr - Idea Cellular

(RTTNews) - Idea Cellular Ltd., a part of the $24-billion Aditya Birla Group and India's leading GSM mobile services operator, reported net profit and revenues for the third-quarter.

Consolidated Results
The Gandhi Nagar-based company posted a third-quarter consolidated net profit of Rs.243.05 crore or Re.0.74 per share, while it was Rs.170.11 crore or Re.0.55 per share in the third-quarter of 2009.
The company said results for the current quarter and nine months were not comparable with that of corresponding period, due to the merger of Spice Communications Ltd. effective March last year, prior to which it was joint venture.
Total quarterly revenue, including other operating income, amounted to Rs.3,955.61 crore, whereas the company posted Rs.3,149.47 crore in the corresponding quarter last year.
For the nine months, the company's consolidated net profit was Rs.624.19 crore, while it was Rs.687.33 crore a year ago. Total revenue, including other operating income, amounted to Rs.11,268.50 crore, whereas the company reported Rs.9,099.28 crore for the Apr-Dec 2009 period.
Stand-alone Results
The company posted a third-quarter stand-alone net profit of Rs.221.06 crore, while it reported Rs.210.14 crore in the prior-year quarter. Total revenue, including other operating income totaled Rs.3,929.05 crore, while it was Rs.2,999.06 crore in the year-ago quarter.
Net revenue for the quarter from 'Established Service Area' was Rs.3,594.10 crore, while that of 'New Service Areas' amounted to Rs.396 crore.



The company added 7.6 million subscribers during the quarter, taking the total subscriber base to 81.8 million as at the end of December 2010.
Average revenue per user per subscriber was Rs.168, down 16 per cent from Rs.200 in the prior-year quarter, while average realized rate per minute declined 20 per cent to Re.0.41 from Re.0.51 in the year-ago quarter.
For the Apr-Dec period, the company's net profit was Rs.588.68 crore, while it was Rs.791.16 crore for Apr-Dec period last year. Total revenue, including operating income, grew 20 per cent to Rs.11,187.58 crore, whereas it posted Rs.8,656.18 crore in the corresponding period a year-ago.
The company said preparatory work for 3G roll-out was on track, and it would launch in the next few months 3G services in the 11 service areas, where it had won the 3G spectrum. It was also finalizing long-term arrangements with select quality operators for service areas, where Idea was not awarded 3G spectrum.
At the BSE, Idea Cellular closed Monday's trading at Rs.69.30, up by Re.0.70 or 1.02 per cent on a volume of 293,000 shares.