It's been close to three months since Andimuthu Raja took over as communications and information technology minister. He has managed to raise hell over BSNL's 65 million-line tender. Now the 23 million line tender is almost through.
But, the big question that is doing the rounds of both Sanchar Bhawan and Electronics Niketan is whether he will complete three months?
That's because if one goes by the whispers that are doing the rounds of the ministry, Raja could make way soon. After all, everyone knows that Chennai decides who the communications minister and not the Prime Minister.
While no one is willing to put a date for the changeover, what is reliably known is that soon India will have its first woman communications minister. After all, with a woman President and a woman chairperson of the National Advisory Council, why not have a woman communications minister.
One only hopes that her communication skills are better than Raja.
Monday, July 30, 2007
Wednesday, July 25, 2007
Sexy towers
The newest fascination in the telecom sweepstakes are towers. So what if they look ungainly, spoil the looks of a city and yet you do not get great coverage. Every operator seems to have spun off its mobile tower business into a separate entity. First Reliance Communications sold 5% stake in its tower company for Rs 1,400 crore. That puts the enterprise value of the tower company at Rs 28,000 crore ($ 7 billion).
As if that was not enough, the $ 1.4 billion American Tower Corporation (ATC)that owns or operates 22,000 telecom towers in the US, Mexico and Brazil is setting up its Asia-Pac headquarters in Delhi. It is looking at initially managing towers of Indian mobile operators. The idea is to get more operators onto each tower. At a later stage ATC it could set up its own towers or even look at acquiring a tower company.
Currently, India has 100,000 telecom towers of which 35,000 are owned by Bharti Airtel. The whole idea behind this scheme is co-locating the electronics equipment of at least two operators on a single tower. Obviously, there are major cost benefits to the operator.
But already mobile operators have outsourced their networks and their IT infrastructure. If they also manage to outsource their towers, then what is left of a telecom company? Al you need is service agreements with each of the vendors to ensure quality. And in case there are issues with coverage then the blame can be passed on to eother of the vendors.
So are mobile operators just there for branding and marketing a service? That's something i guess none of the guys who sold out of the telecom business seem to have ever considered.
As if that was not enough, the $ 1.4 billion American Tower Corporation (ATC)that owns or operates 22,000 telecom towers in the US, Mexico and Brazil is setting up its Asia-Pac headquarters in Delhi. It is looking at initially managing towers of Indian mobile operators. The idea is to get more operators onto each tower. At a later stage ATC it could set up its own towers or even look at acquiring a tower company.
Currently, India has 100,000 telecom towers of which 35,000 are owned by Bharti Airtel. The whole idea behind this scheme is co-locating the electronics equipment of at least two operators on a single tower. Obviously, there are major cost benefits to the operator.
But already mobile operators have outsourced their networks and their IT infrastructure. If they also manage to outsource their towers, then what is left of a telecom company? Al you need is service agreements with each of the vendors to ensure quality. And in case there are issues with coverage then the blame can be passed on to eother of the vendors.
So are mobile operators just there for branding and marketing a service? That's something i guess none of the guys who sold out of the telecom business seem to have ever considered.
Another 7.3 million mobile subscribers
The Indian telecom subscriber base has touched 225 million. Mobile subscribers account for 185 million. In June 2007, the mobile telecom subscriber base shot up by 7.3 million new subscribers. That's the highest ever additions in the country. It has also eclipsed the 7.06 million new subscribers that China added during the month.
In fact, in the first quarter of this fiscal (Apr-Jun, over 20 million new mobile subscribers were added. However, the fixed line base has fallen by 0.66 million during the period to 40.09 million. GSM operators added 5.38 million subscribers while CDMA operators added another 1.92 million. Leading the race was Bharti Airtel that added 1.96 million, followed by Reliance Communications (1.59 million) and Vodafone Essar (1.54 million). However, all that pales into insignificance when one looks at China, where China Mobile added 5.53 million subscribers and China Unicom another 1.53 million.
Not surprisingly, BSNL has managed to add just 0.43 million. After all where do you add subscribers when your network is choked to the gills. Hopefully, minister A Raja withstanding, BSNL can go ahead with the truncated tender for 23 million GSM lines.
In fact, in the first quarter of this fiscal (Apr-Jun, over 20 million new mobile subscribers were added. However, the fixed line base has fallen by 0.66 million during the period to 40.09 million. GSM operators added 5.38 million subscribers while CDMA operators added another 1.92 million. Leading the race was Bharti Airtel that added 1.96 million, followed by Reliance Communications (1.59 million) and Vodafone Essar (1.54 million). However, all that pales into insignificance when one looks at China, where China Mobile added 5.53 million subscribers and China Unicom another 1.53 million.
Not surprisingly, BSNL has managed to add just 0.43 million. After all where do you add subscribers when your network is choked to the gills. Hopefully, minister A Raja withstanding, BSNL can go ahead with the truncated tender for 23 million GSM lines.
Wednesday, July 18, 2007
$2 billion Bharti-Ericsson deal
While state-owned Bharat Sanchar Nigam Ltd (BSNL)is still debating on the size of the GSM contract, market leader Bharti Airtel has gone ahead and signed a $ 2 billion (Rs 8,000 crore)equipment deal with Sweden's Ericsson. Under one of the largest such deals ever, Ericsson will design, plan, deploy, optimise and manage Bharti's GSM network across 15 circles. As part of the two year supply and services contract it will also deliver a pan-Indian integrated device management solution for Bharti.
Bharti is not the only private operator that is committing huge capex for expanding its network. Reliance Communications Ltd., India's second-biggest mobile services provider last week awarded two network expansion contracts worth more than $600 million to Alcatel-Lucent and China's Huawei Technologies. Bharti itself had recently signed a $900 million deal with Nokia Siemens Networks (NSN).
So whether BSNL and communications minister A Raja like it or not, the private operators are going all out to capture a large slice of India's unconnected masses. Unless BSNL gets its act into place quickly, it will realise that most of these people in rural India have already made up their mind about a mobile connection well before it reaches there. That could be a sad story for a corporation that focussed initially on small-town India while private operators were looking only at urban India. Bharti currently has 42.68 million customers of which 40.74 million are mobile customers.
Bharti is not the only private operator that is committing huge capex for expanding its network. Reliance Communications Ltd., India's second-biggest mobile services provider last week awarded two network expansion contracts worth more than $600 million to Alcatel-Lucent and China's Huawei Technologies. Bharti itself had recently signed a $900 million deal with Nokia Siemens Networks (NSN).
So whether BSNL and communications minister A Raja like it or not, the private operators are going all out to capture a large slice of India's unconnected masses. Unless BSNL gets its act into place quickly, it will realise that most of these people in rural India have already made up their mind about a mobile connection well before it reaches there. That could be a sad story for a corporation that focussed initially on small-town India while private operators were looking only at urban India. Bharti currently has 42.68 million customers of which 40.74 million are mobile customers.
Monday, July 16, 2007
23 million lines for now
Communications minister A Raja has had it his way. The BSNL board has agreed on installing 23 million 2G lines. The contenders will be Ericsson and Nokia Siemens Networks(NSN). So if nothing else changes, Ericsson will have to set up 13.8 million lines, while NSN will do the balance 9.2 million.
Obviously BSNL will seek lower prices from the two vendors and they will get that.
So what happens to the 3G component? Well, going in true government style, there will be another tender for 3G. Going by the pace at which such things happen, it will take another year before everything is finally sorted out. Add another six months for installation provided there is no hue and cry. So, by that logic, state-owned BSNL will be able to provide 3G services only in early 2009. By then, most private operators would have rolled out services.
But, that could be a blessing in disguise for BSNL if the entire debate over spectrum allocation is not settled till then. Does that still justify the time it took for BSNL to come to a solution? Obviously, BSNL officials will have to speed up operations despite the hassles they face from a plethora of government bodies (Central Vigilance Commission, CBI, CAG etc). Only then can BSNL be in a position to keep pace with private operators.
In June 2007, while the GSM operators added 5.38 million new subscribers, BSNL added just 0.43 million, which is a shade better than Aircel's 0.37 million. That's way below Bharti's 1.96 million, Vodafone Essar's 1.54 million, IDEA Cellular's 0.86 million new adds in June. BSNL's share in the GSM market has also fallen to 20.90%, while Vodafone Essar has increased to 22.61%.
It's high time BSNL got its act in place. Or else it could end up being one more chapter in India's telecom history.
Obviously BSNL will seek lower prices from the two vendors and they will get that.
So what happens to the 3G component? Well, going in true government style, there will be another tender for 3G. Going by the pace at which such things happen, it will take another year before everything is finally sorted out. Add another six months for installation provided there is no hue and cry. So, by that logic, state-owned BSNL will be able to provide 3G services only in early 2009. By then, most private operators would have rolled out services.
But, that could be a blessing in disguise for BSNL if the entire debate over spectrum allocation is not settled till then. Does that still justify the time it took for BSNL to come to a solution? Obviously, BSNL officials will have to speed up operations despite the hassles they face from a plethora of government bodies (Central Vigilance Commission, CBI, CAG etc). Only then can BSNL be in a position to keep pace with private operators.
In June 2007, while the GSM operators added 5.38 million new subscribers, BSNL added just 0.43 million, which is a shade better than Aircel's 0.37 million. That's way below Bharti's 1.96 million, Vodafone Essar's 1.54 million, IDEA Cellular's 0.86 million new adds in June. BSNL's share in the GSM market has also fallen to 20.90%, while Vodafone Essar has increased to 22.61%.
It's high time BSNL got its act in place. Or else it could end up being one more chapter in India's telecom history.
Wednesday, July 11, 2007
Status quo
Yes, I have been not blogging for sometime now. Took a two week break from work. That's been refreshing. Am back in Delhi. It's still hot, but bearable.
As far as the telecom industry is concerned, nothing radical seems to have happened. The big dispute on the BSNL tender is yet to be resolved. So, 16 months after the BSNL tender for 63.5 million mobile lines was announced, not a single line has been commissioned. Minister A Raja wants Ericsson to lower the rate to $ 90 per line (it quoted $ 107 per line), which it is loathe to do. Huawei has reportedly offered to do it at $ 87 per line. He wants to know if Motorola can do it cheaper. Add to that the planned strike by BSNL employees.
Thanks to the delay, BSNL is simply going down the drain. Even if "The Raja" manages to get Ericsson to lower prices by $ 17, BSNL will gain a shade over $ 1 billion. But, nobody seems to be looking at the opportunity cost. Today BSNL is simply losing out to other operators who are adding on many more subscribers than it. During April-May '07 BSNL added just 574,000 new subscribers as opposed to Bharti Airtel's 3.6 million. Even Aircel that is present only in 9 out of the 23 circles had picked up 8.9 lakh subscribers.
Till early 2006, BSNL used to account for 20-25% of the net subscriber additions. In May, it accounted for just 4.7%.
If nothing is done quickly, BSNL will slip further. Simply put, it's high time Raja put his house in order and clear issues that have been pending. That will provide him a lot more sheen than trying to re-visit every decision taken by his predecessor.
As far as the telecom industry is concerned, nothing radical seems to have happened. The big dispute on the BSNL tender is yet to be resolved. So, 16 months after the BSNL tender for 63.5 million mobile lines was announced, not a single line has been commissioned. Minister A Raja wants Ericsson to lower the rate to $ 90 per line (it quoted $ 107 per line), which it is loathe to do. Huawei has reportedly offered to do it at $ 87 per line. He wants to know if Motorola can do it cheaper. Add to that the planned strike by BSNL employees.
Thanks to the delay, BSNL is simply going down the drain. Even if "The Raja" manages to get Ericsson to lower prices by $ 17, BSNL will gain a shade over $ 1 billion. But, nobody seems to be looking at the opportunity cost. Today BSNL is simply losing out to other operators who are adding on many more subscribers than it. During April-May '07 BSNL added just 574,000 new subscribers as opposed to Bharti Airtel's 3.6 million. Even Aircel that is present only in 9 out of the 23 circles had picked up 8.9 lakh subscribers.
Till early 2006, BSNL used to account for 20-25% of the net subscriber additions. In May, it accounted for just 4.7%.
If nothing is done quickly, BSNL will slip further. Simply put, it's high time Raja put his house in order and clear issues that have been pending. That will provide him a lot more sheen than trying to re-visit every decision taken by his predecessor.
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