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BPL Mobile, hurdle between the Ruias of the Essar group and Vodafone-Essar is going to invest Rs 100 crore with the intention of adding capacity for another one million users. Operations of BPL Mobile is restricted to the lucrative Mumbai circle but witnessed a healthy growth in its subscriber base after the Ruias took control and infused Rs 200 crore in August 2006. It has a subscriber base of 1.67 million after 13 years of its operation. CEO of BPL Mobile, Sanjeev Chachondia, said that “We want to get to two million subscribers by the end of the current fiscal.” Of the Rs 200 crore that had been earmarked earlier, we have already invested Rs 190 crore,” he added.

The investment of Rs 100-crore will also be used to increase the number of cell sites. This will be up by 500 and we will eventually have 1,800 cell sites. “We are generating enough cash and the investment will be done through internal accruals,” Mr Chachondia, further said.

BPL is one of the fastest-growing operators in Mumbai. BPL Mobile is in deal with Research In Motion (RIM) to offer services on its network.

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Mobile phone operators are seeking more talks to discuss Indian government security concerns which a newspaper said could lead to the termination of BlackBerry services in India, an industry official said on Wednesday.

The Business Standard, citing unnamed sources, reported that Indian security agencies want BlackBerry-maker Research in Motion to give them access to algorithms needed to decrypt messages, or face a termination of the service at the end of March.

“We have met them (the government) more than once and we are trying to meet them again,” T.V. Ramachandran, director general of the nine-member Cellular Operators’ Association of India.

“Government wants some security concerns to be addressed and we are trying for an effective dialogue with the security agencies and the department of telecommunications,” he said.

The paper said security agencies, the department of telecommunications, RIM executives and Indian operators offering BlackBerry services would meet on March 14, although this could not be confirmed.

“RIM operates in more than 130 countries around the world and respects the regulatory requirements of governments. RIM does not comment on confidential regulatory matters or speculation on such matters in any given country,” a spokeswoman in Hong Kong said.

The Business Standard said BlackBerry had an estimated 400,000 subscribers in India.

The company’s spokesman for India, Satchit Gayakwad, said BlackBerry services were offered in India by four providers, Vodafone, Bharti Airtel, Reliance Communications  and BPL Mobile.

He said BlackBerry had 12 million customers worldwide in December.

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Though in its infancy in India, mobile advertising is emerging as the biggest competitor to internet advertising. It might even cannibalise mobile advertising, states a new study by global analysis firm Thomas Weisel International. 
 
India’s online advertising is expected to reach an inflection point by 2009-end — a time when mobile advertising is predicted to grow at a scorching pace. 
 
The convenience and ubiquitous nature of a mobile phone — known as the third screen after the TV and computer — is driving its growth in the country. Customised advertisement will drive growth of this segment. 
 
The personalisation of an advertisement (eg. a mobile user can be accessed depending on his monthly bills) will enable advertisers to send him the right content. 
 
Internet advertising, which contributes 1.8 per cent of the country’s total advertising spend, stands at $75 million (around Rs 30 crore). It is slated to rise by 3.1 per cent in the financial year 2008-09 and by 7.1 per cent in the financial year 2010-11. 
 
The current online mobile advertising market in India, on the other hand, is estimated to be just $1.5 million (around Rs 0.6 crore). It includes broadcast SMS, brand jingles as caller ringback tones (CRBT), product placements in mobile phone games and banner advertisements on Internet-accessed through mobile phones. 
 
However, while the country is adding around 7.5 million (both CDMA and GSM) mobiles per month, taking the total number to 208 million, Internet users in India stand at just around 35-40 million. Since the industry is in its infancy, growth numbers are hard to come by. 
 
BPL Mobile CEO S Subramanian says: “Mobile advertising , with its reach and relevance is attracting advertisements. It will become the best option in the next six months. A mobile advertiser will offer freebies such as free airtime or discounts on shopping - to the user for viewing, say four minutes of, an advertisement clip. This will also help a provider tide over the don’t call regime, he said. 
 
Meridian Mobile (a part of the UK-based Meridian group and manufacturers of Fly range of handsets) Chief Executive Officer, Rajiv Khanna, said: “The cellular growth in India is faster than that of personal computer penetration and this will result in huge opportunities for advertisers. The emergence of high-end handsets and portable devices would also result in advertisements moving away from the internet”. 
 
However, there are experts who differ. For example Gartner senior research analyst Madhusudan Gupta and Yahoo! India Senior Director (mobile products) Manish Dalal are of opinion that mobile advertising will compliment online advertising and vice-versa. 

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Just months after Vodafone Group acquired management control of Hutchison Essar, the British firm is headed for a fall out with its Indian partner, the Essar Group. The disagreement comes over Essar Group company BPL Mobile’s move to apply for licences covering 21 of India’s 23 circles. The application for the new licences was not made in the name of BPL Mobile, but a subsidiary called Shippingstop.com. BPL Mobile owns 51.24% of shippingstop.com; the rest is held by a former holding firm of BPL Mobile, BPL Communications.

Earier this week the Cellular Operators’ Association of India (COAI) began lobbying the Department of Telecommunictions (DoT) for an enquiry into the ownership of new licence applicants. Under Indian legislation a company may not have a stake - either direct or indirect - in more than one licensee providing the same service in the same service area. Essar, a 33% owner of Vodafone Essar, is also a shareholder in Mumbai-based cellco BPL Mobile. If BPL Mobile is awarded licences across India, then Essar would end up being owner of two telecom companies in the same licensed areas, which would run contrary to rules. The Ruia family-run Essar dismissed the idea saying the law only bars a stake of more than 10% in two companies in the same licensed area. ‘We have a 33% stake in Vodafone Essar and only a 9.9% stake in (BPL Mobile). So where does the violation arise?’ said Essar spokesman Manish Kedia.

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BPL Mobile Communications Ltd. has applied to the Department of Telecommunications for licences to operate services in new regions, newspaper reports said on Saturday.

The mobile phone operator, that currently has services only in India’s financial hub Mumbai, has applied for licences for 21 out of India’s 23 regions, a report in the Business Line newspaper said.

The company needs “a larger footprint to derive scale economies and cost synergies,” S. Subramaniam, CEO and Director of BPL Mobile was quoted as having said in the Business Line report.

BPL Mobile, which provides services on the GSM (Global System for Mobile Communication) platform, had 1.1 million subscribers at the end of July, according data from an industry body.

An Indian business family — the Ruias of the Essar group — own a 9.9 percent stake in BPL Mobile, while the rest is held by associates and other investors, a spokesman for the group said.

The Ruias also hold a stake in Vodafone Essar, which is the third largest mobile operator in India under a joint venture with U.K.’s Vodafone Group Plc.

A report in the Economic Times said the application could be a result of the latest recommendations from India’s telecom regulator.

Last month, the Telecom Regulatory Authority of India made a set of recommendations to the government that analysts said would encourage new players to enter the country’s rapidly expanding telecom sector.

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France Telecom has re-entered the Indian market through the acquisition of enterprise and managed services division of GTL for around Rs 250 crore. The acquisition will be made through France Telecom’s group company, Orange Business Services.

This marks the re-entry of France Telecom to Indian shores, which it exited in 2003 after selling a 26% stake in BPL Mobile, offering services in Mumbai circle.

“British Telecom was the other serious bidder for the business,” said a source familiar with the deal. While there were other bidders earlier on, the BT and France Telecom were the serious players who were eventually in the race to acquire it.

A formal announcement will be made on July 11. The board of the company will meet on July 11 to ratify and approve the agreement pertaining to the sale of business to Orange. The company’s shareholders have already approved the sale through a postal ballot on July 5.

The ITeS business of GTL, a network service provider, was put on the block last fiscal as the company is keen to focus on the network services business, which is expected to bring in Rs 1,500 crore revenues this fiscal.

GTL is aiming to increase contribution from high margin segments like network planning and design, network operation and maintenance and professional services from 20% to 40%.

In such a scenario, IT had turned a non-core business for the company. The segment was bringing in annual revenues of just over Rs 100 crore. “The target was to complete the sale of enterprise and managed services business within this fiscal and it has been achieved,” said sources.

France Telecom offers integrated business communications solutions spanning consultancy, data, voice and video, mobile and fixed communications services.

It has been looking for opportunities in India for a while now. France Telecom has “a number of options” to enter the Indian market, the French company’s chief executive Didier Lombard said last week. However, he added that the company was looking at “modest options” in view of the high prices of telecom assets in India.

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BPL Mobile will hive off its tower business into a separate company and is embarking on a capacity addition initiative. The Indian company is exploring all options to demerge the tower business and also intends to hive off the infrastructure business into a separate entity, CEO S Subramaniam said. At present, BPL Mobile has around 900 base transceiver stations (BTS) in the country, up from the 550 towers the company had at the beginning of this month. BPL Mobile, which had announced INR 2 billion investment in its single circle, has embarked on a capacity-expansion plan that includes addition of 50 towers a month. By the end of this year, BPL Mobile intends to have 1,300 towers. At present, the company’s mobile sites are being put up by Essar Infrastructure and this will continue until a final decision is taken on the hive-off, according to Subramaniam. BPL Mobile is also giving an impetus to its VAS offerings by increasing its focus on push e-mail and data services, even as it plans to roll out mobile TV services. The company is also planning to launch BlackBerry services.

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EconomicTimes writes…BPL Mobile Communications has increased the capex for this year to Rs 200 crore. The telco, in which the Essar group owns 9.9%, will also refinance loan of Rs 700 crore in the next two months. “We are working on re-financing our Rs 700-crore debt. It should happen in the next two months.

Part of the expansion will be funded from this debt and the rest from internal accruals,�? BPL Mumbai CEO S Subramaniam told ET. The refinancing could be done by the current bankers, which are IDBI, ICICI and IDFC.

However, Mr Subramaniam refused to comment on details. The company had announced a capex of Rs 100 crore in August last year. “We are doubling it up because we have to invest more to keep pace with the growth,�? he said.

The increase in investment is significant as it is being viewed as yet another attempt at building value in the circle ahead of a possible sale. According to sources, the proposed merger of BPL Mobile with Hutchison Essar (HEL) has been called off and the Ruias will continue to manage the circle as of now.

With the new investment, BPL will nearly double the number of base stations from 600 to over 1,100 by September this year. BPL Mobile has roped in Motorola for providing telecom equipment.

The telco, with around 11 million users, is also replacing the existing IN networks. Comverse, an Israel-based mobile communications software maker, is providing the new IN networks. Also in the pipeline are new value-added services, upgradation of call centre and a branding exercise for BPL.

Mr Subramaniam said BPL Mobile reported Rs 106-crore revenue in the quarter ended September ‘06. “We expect to be at Rs 121 crore in the October-December quarter,�? he added.

He said. BPL’s current subscriber capacity is around 14 lakh and it plans to have 18 lakh lines in place by December ‘07. Other operators in Mumbai market are Hutchison Essar, Bharti Airtel, MTNL, Reliance Communications and Tata Teleservices.

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