There is this huge debate in the media over IDEA Cellular and Spice Telecom. There are three versions. 1) IDEA Cellular wants to pick up Spice Telecom. 2) Telekom Malaysia, which has a 49% stake in Spice Telecom wants to merge operations with IDEA 3) the last one talks of IDEA, Spice and Reliance Telecom (the GSM wing of Reliance Communications) joining hands to form a nation-wide network.
Well, the first seems to be most likely. With IDEA looking to consolidate its operation in the country, Spice would provide it a perfect fit. After all, IDEA has 14.56 million subscribers across 11 circles. Plus it has also got the licence for Mumbai and Bihar. Spice with 2.81 million subscribers in Punjab and Karnataka would be a perfect fit. But, what happens to Telekom Malaysia? Does that mean that IDEA will make way for TM in the combined entity? Is BK Modi finally getting out of telecom? He had sold off the Kolkata licence to Bharti years ago. Since then he has stuck on with these two circles.
As far as the second option is concerned, that will depend entirely on what IDEA wants to do. But, one must remember that Aditya Birla knows the Malaysians very well. After all, he had a palm oil venture there for years. In case that happens, the loser could well be Modi.
The last option is more in the realm of dreams. Yes, logically that is a possibility. In fact in the early days of telecom, there was a proposal between BPL and Bharti to joins hands to beat the competition. Nothing happened and Bharti went way ahead by acquiring other operators. Well, if Anil Ambani is looking to get back into GSM, Spice would be a great way to get back. After all, Karnataka and Punjab would provide him a great launchpad for future growth.
That may after all be the way to go.
Thursday, May 31, 2007
Thursday, May 17, 2007
Expanding coverage
Virtually everyone who is involved in India's mobile industry is looking at means to put more subscribers onto the network. The first part relates to expanding coverage. Reliance Communications has plans to hook up over 2 lakh villages. IDEA Cellular has just signed up Nokia Siemens Networks for a $ 500 million deal. The plan is to double the coverage in six of the 11 circles (basically states) in which IDEA operates currently.
Meanwhile, IDEA has already started work on setting up the network in Mumbai. But services will start only once it manages to get adequate spectrum. But, that is an altogether different story. It also has the licence for Bihar. Currently, IDEA has 14.45 million subscribers and controls 11.06% of the GSM market in India.
This is also over and above the $ 3.5 billion that market leader Bharti Airtel plans to invest in this fiscal.
Expanding networks is fine. The big need is to get more subscribers onto the network. Reliance as usual went another step ahead and launched cheap colour handsets at Rs 1,234 ($ 30). This should go along way to get a newer rung of Indians to go mobile. This time round, Reliance Communications has signed up with Chinese manufacturers like ZTE to launch phones under the Reliance Classic brand. Can Reliance now launch high-end phones using the same brand?
That could be very interesting in a market that is so price conscious. But if one is to believe what the Nokia's of the world say, the Indian consumer goes not just for price but looks at value for money. If that is the case, then this initiative of Reliance could backfire.
Meanwhile, IDEA has already started work on setting up the network in Mumbai. But services will start only once it manages to get adequate spectrum. But, that is an altogether different story. It also has the licence for Bihar. Currently, IDEA has 14.45 million subscribers and controls 11.06% of the GSM market in India.
This is also over and above the $ 3.5 billion that market leader Bharti Airtel plans to invest in this fiscal.
Expanding networks is fine. The big need is to get more subscribers onto the network. Reliance as usual went another step ahead and launched cheap colour handsets at Rs 1,234 ($ 30). This should go along way to get a newer rung of Indians to go mobile. This time round, Reliance Communications has signed up with Chinese manufacturers like ZTE to launch phones under the Reliance Classic brand. Can Reliance now launch high-end phones using the same brand?
That could be very interesting in a market that is so price conscious. But if one is to believe what the Nokia's of the world say, the Indian consumer goes not just for price but looks at value for money. If that is the case, then this initiative of Reliance could backfire.
Wednesday, May 16, 2007
Agenda for the new telecom Raja
It's official. Andimuthu Raja is the new communications and information technology minister. Among the first things he talked about soon after taking over today is extending telecom coverage to rural areas. That quite fits the bill. After all, the real growth in mobile telephony is happening in rural India.
But life is not going to be easy for Raja. That's because he has to settle many issues that are still pending. The A list includes spectrum allocation (both 2G and 3G), reduction of duties and allowing private mobile subscribers to roam on the network of state-owned Bharat Sanchar Nigam Ltd (BSNL).
The last one is an easy way to ensure that Raja can ensure deeper coverage at one go. The moment that happens, a 100 million private mobile subscribers can be mobile in rural India. But, by far the the key issue is spectrum. Defence is expected to release 42.5 Mhz of spectrum by July. The quicker the operators get spectrum, subscribers can get access to better quality services. it remains to be seen how quickly Raja can cut through the logjam. That could decide his fate.
The other issue is the high level of duties in the sector. If the duties are lowered, it will bring in an entirely new strata of people into mobile telephony. It remains to be seen whether he can convince finance minister P. Chidamabaram to agree.
Raja needs to take quick action on number portability. It has been hanging fire for close to a year. After all, that will make life a lot more better for consumers while making the operators all the more accountable.
But life is not going to be easy for Raja. That's because he has to settle many issues that are still pending. The A list includes spectrum allocation (both 2G and 3G), reduction of duties and allowing private mobile subscribers to roam on the network of state-owned Bharat Sanchar Nigam Ltd (BSNL).
The last one is an easy way to ensure that Raja can ensure deeper coverage at one go. The moment that happens, a 100 million private mobile subscribers can be mobile in rural India. But, by far the the key issue is spectrum. Defence is expected to release 42.5 Mhz of spectrum by July. The quicker the operators get spectrum, subscribers can get access to better quality services. it remains to be seen how quickly Raja can cut through the logjam. That could decide his fate.
The other issue is the high level of duties in the sector. If the duties are lowered, it will bring in an entirely new strata of people into mobile telephony. It remains to be seen whether he can convince finance minister P. Chidamabaram to agree.
Raja needs to take quick action on number portability. It has been hanging fire for close to a year. After all, that will make life a lot more better for consumers while making the operators all the more accountable.
Monday, May 14, 2007
Son rises as the Sun sets
It's bizarre. It happens only in Tamil Nadu.
You can have any kind of election exit polls. But, if a Tamil newspaper Dinakaran (that is part of the Sun group), owned by the grand nephew of Tamil Nadu chief minister and DMK chief M Karunanidhi dare does a poll on the political heir to MK, then there is serious trouble. After all, MK has three wives (one of them is dead). He has one son out of the first wife. Then there are three sons and one daughter from the second wife (Dayalu Ammal). From the third wife he has one daughter, Kanimozhi who has been declared as his literary heir.
When the poll puts, MK Stalin, way ahead of elder brother and otherwise non-entity MK Azhagiri, all hell breaks loose. Azhagiri's goons set fire to the newspaper office in Madurai. Three people die, but the state takes no action on the goons.
Yes, it asks Union communcations and IT minister Dayanidhi Maran, whose brother Kalanidhi Maran owns the Sun group to resign from the Union cabinet. That after, Dayanidhi Maran was instrumental in getting a string of telecom multinationals to invest in India and Tamil Nadu in particular.
In this case, Prime Minister Manmohan Singh has simply no power over his ministers. That's because the DMK is one of the key constituents of the ragtag that forms the UPA. Thus a otherwise successful minister has to give up his job because an old and ailing politician cannot control his errant sons. In case, Singh opposed the move, it is quite possible that the DMK will withdraw support to the government. In coalition politics, that is something that no Prime MInister would want.
So why did this happen? Well, while Karunanidhi's sons are non entities outside of Tamil Nadu, the Maran brothers had acquired almost global clout. At the end of the day, the father in Karunanidhi realised that his sons were going nowhere. So , is this a good way to remove one of the Maran brothers and teach them a lesson?
That remains to be seen. But, the big question is who will be the next communications minister? Will it be someone else from the DMK? Hopefully not Anbumani Ramadoss.
You can have any kind of election exit polls. But, if a Tamil newspaper Dinakaran (that is part of the Sun group), owned by the grand nephew of Tamil Nadu chief minister and DMK chief M Karunanidhi dare does a poll on the political heir to MK, then there is serious trouble. After all, MK has three wives (one of them is dead). He has one son out of the first wife. Then there are three sons and one daughter from the second wife (Dayalu Ammal). From the third wife he has one daughter, Kanimozhi who has been declared as his literary heir.
When the poll puts, MK Stalin, way ahead of elder brother and otherwise non-entity MK Azhagiri, all hell breaks loose. Azhagiri's goons set fire to the newspaper office in Madurai. Three people die, but the state takes no action on the goons.
Yes, it asks Union communcations and IT minister Dayanidhi Maran, whose brother Kalanidhi Maran owns the Sun group to resign from the Union cabinet. That after, Dayanidhi Maran was instrumental in getting a string of telecom multinationals to invest in India and Tamil Nadu in particular.
In this case, Prime Minister Manmohan Singh has simply no power over his ministers. That's because the DMK is one of the key constituents of the ragtag that forms the UPA. Thus a otherwise successful minister has to give up his job because an old and ailing politician cannot control his errant sons. In case, Singh opposed the move, it is quite possible that the DMK will withdraw support to the government. In coalition politics, that is something that no Prime MInister would want.
So why did this happen? Well, while Karunanidhi's sons are non entities outside of Tamil Nadu, the Maran brothers had acquired almost global clout. At the end of the day, the father in Karunanidhi realised that his sons were going nowhere. So , is this a good way to remove one of the Maran brothers and teach them a lesson?
That remains to be seen. But, the big question is who will be the next communications minister? Will it be someone else from the DMK? Hopefully not Anbumani Ramadoss.
Friday, May 4, 2007
Village connectivity
We have been hearing for years how people in India's 600,000 plus villages are bereft of a phone. Over the years, over 250,000 have been covered. But what about the rest? Who is going to fund the investment?
That's precisely the market that the first product of Nokia Siemens Networks (NSN)plans to cater to. The NSN Village Connection solution can provide cheap rural connectivity. Here the focus is on entrepreneurs in the villages. Here the entrepreneur will set up an access point that has a GSM radio, IT hardware and software solutions. This can be strapped onto anything like a TV antenna. The village access points are connected by IP links to a regional access centre. This centre is in turn hooked to the GSM network of the operator. While there are no readily available numbers, it could be set up for roughly $ 3,000 (Rs 120,000).
Under the proposed model the entrepreneur will get paid for all intra-village calls. The operator gets paid for all calls going out of the village.
While that seems to be a great way to get cheaper connectivity, there are many issues that need to be sorted out.
# How does this fit into the country's regulatory mechanism?
# Does the GSM operator provide the entrepreneur any rental?
# How will the calls that are made within the village be accounted for?
# Will there be a revenue share on these calls too?
Let's hope this initiative by NSN does not get stuck in bureaucratic legalese. After all, rural India is the next big growth market. Oh ya, NSN is currently doing pilots on this at over 10 locations in India.
That's precisely the market that the first product of Nokia Siemens Networks (NSN)plans to cater to. The NSN Village Connection solution can provide cheap rural connectivity. Here the focus is on entrepreneurs in the villages. Here the entrepreneur will set up an access point that has a GSM radio, IT hardware and software solutions. This can be strapped onto anything like a TV antenna. The village access points are connected by IP links to a regional access centre. This centre is in turn hooked to the GSM network of the operator. While there are no readily available numbers, it could be set up for roughly $ 3,000 (Rs 120,000).
Under the proposed model the entrepreneur will get paid for all intra-village calls. The operator gets paid for all calls going out of the village.
While that seems to be a great way to get cheaper connectivity, there are many issues that need to be sorted out.
# How does this fit into the country's regulatory mechanism?
# Does the GSM operator provide the entrepreneur any rental?
# How will the calls that are made within the village be accounted for?
# Will there be a revenue share on these calls too?
Let's hope this initiative by NSN does not get stuck in bureaucratic legalese. After all, rural India is the next big growth market. Oh ya, NSN is currently doing pilots on this at over 10 locations in India.
Thursday, May 3, 2007
Nokia: Catering to the next billion
Many of the Nokia global bosses were here in New Delhi. For one they had come to flag off the Nokia Express, a train with bogies painted in Nokia blue. It carries many low-cost handsets. The idea is to hook the bogies to various trains. In the process, people across India can get to see, feel and experience a Nokia phone. But, with some technical problem with the train, it could not be formally flagged off.
But, they did bring in the media and analysts from across Asia Pac. Nokia launched seven new low cost phones, six GSM and one CDMA. All are priced between Euro 35-85 (Rs 1,950-4,675. But then that is not necessarily low-cost. That's because Reliance Communications has just announced a SIM-based phone at Rs 777 ($19). Now that's real cheap.
Also many of the new phones have Internet access. Almost all off them have FM radio, flashlights, colour screen etc. Nokia's logic is that people in small towns in emerging markets are now looking at value for money and brands. That's why they will prefer Nokia phones.
With 3 billion people expected to have a mobile phone by 2007-end, up from 2 billion in September 2005, it remains to be seen how many will be using a Nokia.
But, they did bring in the media and analysts from across Asia Pac. Nokia launched seven new low cost phones, six GSM and one CDMA. All are priced between Euro 35-85 (Rs 1,950-4,675. But then that is not necessarily low-cost. That's because Reliance Communications has just announced a SIM-based phone at Rs 777 ($19). Now that's real cheap.
Also many of the new phones have Internet access. Almost all off them have FM radio, flashlights, colour screen etc. Nokia's logic is that people in small towns in emerging markets are now looking at value for money and brands. That's why they will prefer Nokia phones.
With 3 billion people expected to have a mobile phone by 2007-end, up from 2 billion in September 2005, it remains to be seen how many will be using a Nokia.
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