Indian telcos to do aggressive bidding for 3G spectrum
www.WirelessFederation.com/news: After a delay of three years, the auctions for 3G spectrum is round the corner and all the private telecom players waiting for the big day are ready to indulge in an aggressive bidding to grab the crucial airwaves from their competitors. The auction is schedule to take place on April 9.
The auction is described as sizzling by the analysts because the spectrum which is at stake will bring the operators in the attractive realm of high-speed internet and video-conferencing services, thus giving them an edge over other operators in the highly competitive telecom market.
According to Mahesh Uppal, a telecom consultant, of the six companies that have pitched for a pan-India 3G spectrums, Vodafone, Airtel, Idea and Aircel are facing a serious 2G spectrum crunch and for these companies, 3G spectrum is critical and they cannot afford to let go airwaves.
Rs 3,500 crore and Rs 1,750 crore is the base price for pan-India 3G airwaves, for pan-India 3G airwaves bid schedule to take place on April 11. Three slots of 3G airwaves in 17 telecom service areas and four in the other five will be auctioned by the Indian government and two slots are up for sale across the country for broadband airwaves.
Mr. Uppal also feels that bids would be very aggressive and it is unlikely that companies would bid less than a billion dollars, given that the base price is $780 million.
Tata launches GSM service in Himachal Pradesh (India)
www.WirelessFederation.com/news: GSM service of Indian telco Tata Teleservices has been launched by the operator in the Indian state of Himachal Pradesh under the Tata Docomo brand. Currently, Airtel, BSNL, Idea-Spice, Aircel, Vodafone and S. Tel are the operators providing network facility to the people of Himachal Pradesh.
According to Rajeev Narayan, the company’s vice-president, corporate affairs, the company is offering per second tariff structure for every service.
286 towns and 4,342 villages in the state have Tata Teleservices connection.
Bharti Airtel & Zain to sign Africa deal on Tuesday
www.WirelessFederation.com/news: The much talked about $10.7 bn deal between Kuwait’s Zain telecom and India’s top mobile firm Bharti Airtel, which has been making the rounds of the telecom world is expected to be signed on Tuesday at the headquarters of Zain Africa.
African market was penetrated by Zain in 2005 by the acquisition of the operations of the Dutch Celtel firm for around $3.5 billion. Last week, both the companies stated that they have finalized agreement for the sale of Zain’s operations in 15 African nations. Zain’s operation in Sudan or its investment in Morocco is not included in the sale of the African assets.
$8.3 billion, raised mainly from international banks, will be paid by Bharti on signature of the deal, while the remaining $700 million will be paid a year later. Through the deal, 42 million clients in 15 African countries from Burkina Faso to
Zambia would be gained by Bharti while Zain clients will shrink to 30 million from 72 million.
Zain board clears Bharti’s bid for African assets
The board of Kuwait-based Mobile Telecommunications Co. KSC, Zain has approved the sale of its African assets to India’s largest telecom service provider Bharti Airtel Ltd. This deal values the assets at $9 billion.
According to the Zain board, the due diligence has been completed and the parties are finalizing definitive agreements which are expected to be signed in the coming days.
The Zain’s assets which are spread across 15 countries would cost Bharti over USD 9 billion. Mittal’s Bharti will also take on Zain’s $1.7 billion debt, which will put the deal value at $10.7 billion.
Bharti Airtel offers its services in India and Sri Lanka and has over 118 million customers apart from the 116.01 million mobile customers, according to the data record of November 2009.
Bharti hails audit reports from Indian govt
www.WirelessFederation.com/news: The findings of the government-appointed special auditor have been welcomed by Bharti Airtel. According to the operator, the audit showed that the license fees and spectrum charges paid by the company conform to the license conditions and rulings of the regulator.
However, the Department of Telecommunications (DoT) has got an option to claim Rs 98 crore from the company as additional license fee and spectrum charges because of the reports. The amount is the likely license fee impact on distributor margin.
However, it has not been specified in the 306-page audit report, which was submitted last week to the government whether Bharti is liable to pay this amount and has left it to DoT to take a final view on the issue.
However, it has been categorized that Bharti will not need to make any additional payment. According to company spokesman, based on specific request from DoT, the auditors have done their own estimates of the likely license fee impact on distributor margin and there is no liability whatsoever on this account as the company has paid license fees on actual realized revenues.
Vodafone launches app store in India
www.WirelessFederation.com/news: An application store for the Indian market has been launched by Vodafone’s Indian operation, Vodafone Essar. The operator waited for 10,000 downloads before officially announcing it even though the app store has been running since the middle of last month. This is the third major app store launch in India recently and there’s a fourth one on the way.
These apps provide smartphone features for feature phones and the lineup is also not that fancy when compared to the one on the iPhone or Android app stores. Currently, almost 800 apps available are focused on being useable and cheap.
Between 15% and 25% of the apps on the store are currently free of charge while the rest cost between Rs 5 and Rs 30 to download or roughly $10 to $65 or 8 to 50 euro.
Airtel, which is the biggest rival of Vodafone Essar in India, also launched its apps store a few weeks back. Next month, Reliance will be launching a store as well and prices are again expected to be very low.
Bharti regains losses as investors revisit Zain deal (India)
www.WirelessFederation.com/news: Within two days of the announcement that Bharti Airtel and Zain will enter into exclusive talks for Zain’s African assets, Bharti lost $3.6 billion in market capitalisation.
However, an improvement in the investor’s sentiments has been noticed since then, primarily after Bharti’s conference call with analysts in end-February on the Zain acquisition. The main concern was the fact that the valuation of the deal at 11.6 times estimated 2009 EBITDA was far too high.
In its clarification, the company said that the $1.7 billion debt component in Zain Africa’s enterprise value is inclusive of the share attributable to minority shareholders. The company has also indicated that tax rates in Africa are relatively lower, which justifies some premium in the valuation. Besides, the capital infusion of $9 billion of Zain till date makes the valuation of $10.7 billion look reasonable. The fact that Zain’s margin is lower than Bharti’s margin also leaves room for cost containment.
$4 billion would be used by Zain Africa’s holding company to retire debt on its books with the interest burden of $4 billion debt already reflected in Zain Africa’s financials, hence, the incremental interest burden would only be on $5 billion of debt.
All the factors have contributed well to improve the sentiments of the investors and has helped Bharti regained almost two-thirds of those losses.
Tata DoCoMo enters Gujarat (India)
www.WirelessFederation.com/news: Indian state Gujarat would now receive Tata DoCoMo. GSM mobile service after the company launched the services across the state barring Ahmedabad, Baroda (Vadodara) and Jamnagar. Though the official announcement is yet to be made, all the information regarding list of circles, tariff and other details for future consumers of Tata Docomo across the state have been posted on the website.
The plans include the Tata DoCoMo life time prepaid card priced at Rs. 49 and the “pay as you go” scheme, with a pulse of one second, and a charge of 1 paisa per second. There is no difference in the tariff plan when compared to other circles in which the company operates
DoCoMo joins other big players already operating in the state including BSNL, Reliance (GSM and CDMA), Airtel, Tata Indicom (CDMA), Idea Cellular, and Vodafone.
MWC2010: Bharti tips telcos to connect to physical media
www.WirelessFederation.com/news: The need to connect to the media world physically has finally been realized by the telecom world and it has also been realized that it requires replacing telecom veterans with media talent.
According to Bharti Airtel deputy CEO Sanjay Kapoor who was present at the Mobile World Congress, the presence of operators now involves events in the media industry, which have become part of life going forward and the consumers are not willing to pay a premium for music, video and downloads on their mobile if they are available on other mediums. He also advised to take out the telecom person and bring in a media person, who now heads the division.
Operators can charge up to 25% premium if they can package content for mobile in a form acceptable to customer ahead of other mediums and it was insisted that the one-size-fits-all model of the past doesn’t work anymore.
Bharti keen to enter African market by buying Zain’s African assets
www.WirelessFederation.com/news: By seizing on a potential $9 billion deal with Kuwait’s Zain, Bharti Airtel appears determined to wade into a market loaded with poverty, promise and major legal tussles but the deal if completed, would catapult the company into the ranks of major telecom operators in Africa. Thus Bharti would have significant footholds in two continental markets- India and Africa.
While Zain appears to be keen seller, Airtel too expects to get a head start over those trying to buy scattered operations or acquire licenses in different African countries.
However, Bharti isn’t the only telecom operator eager to enter the African market. $2.5 billion has been bid by a consortium involving China Unicom (Hong Kong) Ltd for the former state telecoms monopoly in Nigeria.
