Wireless Federation

Bharti Airtel is leading its rivals in carrying both national and international long distance calls. According to TRAI data, Bharti earns more revenues than the PSU for carrying STD traffic.

Statistics:

Telcos                  STD calls (Revenue)       ISD calls (Revenue)
Bharti Airtel         Rs 1189.6 crore              Rs 624.1 crore

RCOM                  Rs 591.4 crore               Rs 426.5 crore

BSNL                   Rs 721.5 crore               Rs 179.4 crore

Market analyst states reasons for Bharti’s leading a market:

• Bharti has nearly a 20 million lead over its rivals in customer numbers.

• Many of the regional operators route their STD traffic on Bharti’s domestic network.

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Earlier it was confirm that CDMA operators Reliance Communication and Tata Teleservices will be getting 3G spectrum without bidding. But now Government has decided to auction CDMA licences for 3G sevices. According to the Telecom minister, Andimuthu Raja, at the start of August, the government announced plans for a global auction of 3G licences. At the time only two CDMA licences were thought to be available, so the plan was that Reliance and Tata would pay a pro-rata price based on the outcome of the GSM auction. Now one more operator has been permitted. So again we consulted the TRAI (Telecom Regulatory Authority of India) and took a decision that it can also be auctioned.” CDMA and GSM mobile services are provided on different bandwidths, Andimuthu Raja said. Chairman Anil Ambani has said Reliance would consider providing 3G both on GSM and CDMA. Tata Teleservices has obtained licences for second-generation GSM mobile, but it is yet to begin its services.

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As per the direction given by TRAI to provide interconnectivity to RCom GSM network, five mobile operators, including Idea Cellular, MTNL and Tata Communication have agreed to provide link of their network to RCOM group. Idea Cellular has agreed to provide interconnection to RCom thereby not becoming a part of COAI’s likely petition against TRAI’s directive on the same sources revealed. Aircel and Spice Communication are the other operators to give interconnection to RCom GSM network.

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According to a study, Small and Midsize businesses (SMBs) in India are driving up spending on Telecom Equipment for better customer relationship management. Study reveals that Indian SMBs are on track to spend $6.4 billion enhancing their connectivity infrastructure this year, an increase of about 7 percent over 2007. Analyst said that cellular penetration for this segment has reached 98 percent, almost on par with local phone penetration. Unified communications is expected to feature in Indian SMBs’ telecommunications investment plans for 2008 due to the need to communicate with remotely located employees. Spending on services, in particular, makes up over 80 percent of total spending in the area of unified communications, anayst added. “Usage of video and Web conferencing is still at an embryonic stage among Indian SMBs, but is anticipated to move forward along with greater availability and affordability of bandwidth; many ISPs (Internet services providers) are indeed striving to bring down the broadband costs”. “SMBs are considering cutting down on business travel to bring down costs, especially in the wake of spiraling fuel prices. Other real-time communication methods like audio and video conferencing can help them reduce the need of business travel and face-to-face meetings,” analyst further said.

Arun Sarin, who often figured in global lists of most powerful business leaders. One of the most successful CEOs of British telecom giant Vodafone to don a new gear for trekking in Himalayas. There are speculation that he may get an offer from conglomerates like Tatas or a host of MNCs across the globe.

After heading the world’s largest mobile firm for five years, a tenure that saw him grappling with demands for his player Hutch, India-born Sarin immediately plans trek to Himalayas before settling down in California. However, all these are only speculations and during his India visit earlier this month, Sarin said that he was looking forward to a brief break “immediately” after his retirement on July 29. “I shall come back to India… and proceed for trekking to Himalayas,” he had said. “He is most attracted by the prospect of investing his own money—he has accumulated millions thanks to Vodafone share options and remuneration—and of returning home,” according to a media report.

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Virgin Group chairman Richard Branson announced Sunday the launch of Virgin Mobile in India through a partnership with Tata Teleservices.  

“Tata has got the network, we have got the brand…it makes a win-win for both companies,” said Branson.

However, Virgin and Tata both insisted the agreement will not see Virgin Mobile operate as a mobile virtual network operator (MVNO), which is not permitted in India.

Instead, Tata will sell Virgin-branded mobile services as part of a revenue-share agreement.

“This is not an MVNO agreement between Virgin and Tata Teleservices,” said Anil Sardana, managing director of Tata Teleservices.

“Virgin Mobile is just another brand that the company would offer, it is us who will invest in infrastructure and get regulatory approvals and operate as a network service provider. Virgin on its part would just lend its brand and the value-added services (VAS) that come with it to us,” he commented.

However, both companies declined to disclose the exact details of their revenue-sharing agreement.

Virgin Mobile’s Indian operation will be targeted at the youth market, offering music and game downloads to appeal to a younger demographic.

It has set a target of attracting 5 million customers in the first three years.

“India is an exciting market. There are more than 215 million Indians aged between 14 and 25 years. Over the next three years, we expect this segment to be adding over 50 million new youth subscribers and to have revenues of over 350 billion rupees (€5.75 billion),” said Branson.

Branson revealed last November that Virgin Mobile had found a telecoms partner for its Indian venture, although the regulation of foreign ownership of Indian businesses proved to be a source of frustration for the entrepreneur.

Tata offers mobile services across India through its Tata Indicom brand which according to the Economic Times serves 22.5 million customers, representing a 9.3% market share.

“It’s the size of the market that is attracting so many foreign companies to India… The growth is going to be here in the coming years, compared with the U.K. and the U.S. where it has plateaued,” said Harit Shah, an analyst at Angel Broking in Mumbai, to the Hindustan Times Sunday.

According to the Telecom Regulatory Authority of India (TRAI), the country added a total of 8.17 million mobile subscribers in January, bringing the total user base up to 242.4 million.

Tata’s services are CDMA-based, however Branson said he is keen on entering the GSM sector as well.

“It’s a pain to do GSM at the moment because the network is completely full,” he said.

“In another nine months, when the new GSM players start rolling out their services, we would look to offer similar services on GSM as well,” he added.

However, Branson will have to wait for India’s final decision on how best to distribute additional GSM spectrum.

Delhi’s High Court in January delayed ruling on an ongoing spat between the country’s CDMA and GSM providers over which operators should be entitled to receive extra chunks of 2G GSM bandwidth.

The row was sparked off specifically by the government’s decision last October to allow CDMA operators to apply for GSM spectrum.

The move is opposed by GSM industry body the Cellular Operators Association of India (COAI), which is driven by the country’s biggest GSM operators such as Bharti Airtel, Vodafone Essar and Idea Cellular.

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When the entire nation is engrossed in the unfolding Hutch drama, another landmark deal is in the works. Two of the world’s most admired business leaders — Ratan Tata of the Tata Group and Richard Branson of the Virgin empire — are coming together for an alliance in India’s telecom landscape.

A source familiar with the development said the Virgin Group is in talks with Tata Teleservices to introduce Virgin Mobile brand in India. Globally, Virgin Mobile’s business strategy is to act as a MVNO (Mobile Virtual Network Operator) which buys bulk space from an existing wireless company and resell it under the Virgin brand. However, this model is not yet allowed in India.(For instance: Virgin Mobile has a tie-up with Bell in Canada, while it has an alliance with Sprint in the US).

Instead, Virgin is planning to become an exclusive franchisee of Tata Teleservices which is permitted in India. For this, a new entity largely owned by Tata Teleservices will be formed. The products and services will be bundled under Virgin name, supported by the services provided by Tata Teleservices. The source added that discussions so far has been good and if all goes well with the regulatory appr ovals in place, Virgin Mobile would be launched in April this year. When contacted, a Tata group spokesperson declined to comment.

There would be two brands — Tata Indicomm and Virgin. Tata Indicomm positioned as a mass market brand, while Virgin would be positioned as a youth brand pitted against brands like Hutch. This is been done as Tata Indicomm does not appeal to everyone in terms of popularity and appeal. Tata Indicomm has already established itself in the mass market category while Richard Branson’s touch could bring in more subscribers.

This comes at a crucial time when Dayanidhi Maran, Union minister of communications and IT, is pushing to promote passive (mobile tower sites) and active infrastructure (branding, service alliances) sharing, which would help companies to reduce its cost of rolling out services. Though wireless subscribers in India have already crossed the 100-million mark, making India one of the top five markets in the world, still more than 50% of the population is to be covered by mobile services.

For the British billionaire, this is part of his strategy to expand his businesses__telecom, radio, food and beverages, financial services__in India. In 2005, Branson launched his airline Virgin Atlantic’s flight services in India.

Tata Teleservices pioneered the CDMA technology platform in India and it serves 13 million customers in over 2,500 towns. Its customer base increased thanks to its hugely successful schemes like ‘non-stop’ and ‘don’t stop’. Recently, Tata Teleservices saw a change in ownership structure with NRI businessman C Sivasankaran’s Sterling Infotech group and Singapore government’s private equity arm Temasek acquiring stakes in the company.

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The Board of VSNL has approved a proposal to change the name of the company to Tata Communications Limited. The new name and identity will, it is hoped, help the company ‘to leverage the brand equity that has come to be associated with the Tata Group’. According to Mr Srinath, Managing Director and CEO of VSNL: ‘The change in the company’s name is a major step in our commitment to customers, partners and stakeholders. Tata Communications reiterates a focus on the global communications business where we are a major player; at the same time, it reflects our strong heritage and leadership position in India.’

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IT company Tata Consultancy Services has signed a USD 140 million transformational deal with India’s state-owned operator BSNL. The company will provide BSNL with a comprehensive range of telecom services to enable complete transformation of existing systems and processes to an IP-based convergent billing system. The multi-year engagement involves setting up complex data networks across the vast BSNL footprint in the north and west of India and includes deployment of operational support systems and business support systems components. The company will also manage the overall engagement along with a team of hardware, software and application partners.

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US-giant AT&T is exploring the possibility of re-entering India’s lucrative mobile telephone service market.

Within less than two months of being at the helm, AT&T CEO Randall Stephenson is coming to India on a three-day visit this month, and will also be exploring the possibility of outsourcing some of its activities related to software development to India.

During his three-day visit, Stephenson will meet secretary of the Department of Telecommunications and the chairman of Telecom Regulatory Authority of India (TRAI) among other government officials.

AT&T can enter into the Indian market either through acquisition of an existing mobile service provider or by acquiring a new license for mobile services.

At present, Idea and Spice can be two acquisition targets in the GSM mobile space. Spice, with its operations in only two circles, Punjab and Karntaka, may not be attractive for a giant like AT&T.

There is no spectrum available for 2G mobile services, the existing standard for GSM.

However, a new entrant has a chance in 3G services. The government is finalizing policy for 3G spectrum.

AT&T exited Indian mobile service market in July 2005, when it sold its equity in Idea to Tata and Aditya Birla groups.

It had entered into Indian mobile market through a JV with Aditya Birla group by acquiring cellular mobile licenses for Maharashtra and Gujarat in 1995.

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