Reliance unveils unlimited talk time plans (India)
www.WirelessFederation.com/news: Unlimited talk time to the subscribers for minimal one-time monthly charges will be offered by Reliance Communications thus igniting war in the CDMA mobile telephony space. The move reflects its drift from conventional tariff metering plans. Only CDMA users can avail this facility.
According to the company, it will offer customers with unlimited local calls at a monthly fixed charge of Rs 299, and unlimited STD calls at a fixed charge of Rs 599. Two unique calling packs, one for local calls and the other for STD ones will be launched under the new ‘Simply Unlimited CDMA Offer. ‘
Unlimited local calls to any other Reliance subscriber at a monthly recharge value of Rs 299 can be made by the Reliance customers through the local pack. For local calls to other networks such as Airtel and Vodafone, subscribers would get 30 minutes of free talktime per day.
Reliance Comm expects intense tariff war to continue (India)
www.WirelessFederation.com/news: Pressure on telephone call charges has been expected by Reliance Communications Ltd as new operators continue to rush to the world’s fastest growing mobile phone market by number of users.
The Indian telecom market is undergoing an intense price war and with the entry of new and competent telecom operators, the already instigated ambience has become all the more aggressive and to counter the situation, aggressive offers are expected to be launched to attract subscribers and existing players lowering tariffs to retain users. The local call tariffs have gone as low as INR0.10 a minute for certain plans because of the tariff war.
According to Mahesh Prasad, president of wireless services at Reliance Communication, by and large, the tariff pressure that the country has seen in the second and third quarters has come down a lot but, there will be continued pressure on tariffs, as some of the greenfield operators have not yet made the entry.
11-Digit Phone Numbers plan opposed by Indian operators
www.WirelessFederation.com/news: Indian regulator’s plans to move the country to an eleven digit phone number system has been opposed by the majority of India’s mobile network operators. Pending shortage of available numbers within the current mobile prefix has made the changes to the numbering system a requirement and has leaded the TRAI to hold a consultation.
Mobile operators have countered this suggestion of TRAI by suggestion that the numbering blocks currently reserved for landline can be made available to mobile subscribers. The GSM operators have been represented by Cellular Operators Association of India which feels that keeping six billion numbers reserved for fixed line subscribers is unfair. This is a clear wastage of the precious numbering resource as the actual number is even below 40 million.
According to the association, considering the relative size of the subscriber bases in the mobile and fixed sectors and the exponential growth of mobile subscriptions, it is worthwhile to free up the fixed line numbering resources and re-allocate some levels to mobile services
The only operators which had not objected to the idea of longer phone numbers are Reliance Communications and the Tata Teleservices. In their opinion, long term trend towards 11-digit phone numbers in inevitable regardless of how many dialing prefixes are made available.
Bharti Airtel to float one of their Tower subsidiaries (India)
www.WirelessFederation.com/news: A stock market floatation of tower holding subsidiaries, the wholly owned Bharti Infratel and its smaller joint-venture with Vodafone and Idea Cellular, Indus Towers, has been mulled by India’s Bharti Airtel.
Around 100,000 towers are owned by Bharti Infratel while Indus has around 70,000 towers. 42% in Indus Towers is owned by Bharti Airtel and Vodafone each while remaining 16% is owned by Idea Cellular. Looking at the financial conditions of Infratel or Indus, Bharti may issue initial public offering in the next fiscal.
In 2007, Reliance Communications too sold a 5 percent stake in it towers business with an equity valuation of US$6.75 billion. A merged GSM tower business with 70,000 towers of RTIl could be worth around US$33 billion. However, it has to be kept in mind that RTIL is a whole operations business, whereas the Indus Towers is solely based on the passive infrastructure and does not include any of the RAN or antenna facilities.
Indian telco’s profit to be hit by lower call rates
www.WirelessFederation.com/news: The tariff war engulfing India’s telecommunication industry and extreme competition in the telecom market is likely to hit the profits of the telecom operators in the October-December quarter. A decline of 6% to 13% is expected in Average revenue per user, or ARPU.
Only Bharti Airtel Ltd is expected to post an ARPU of more than INR200 in the fiscal third quarter. The price war was started by Tata DoCoMo by introducing per-second billing plans in June. Reliance Communications Ltd. joined the league with a plan in October by offering INR0.5 per minute, and subsequently all operators launched per-second schemes.
Aggressive billing plans launched by new players entering the market also forced established companies to slash call charges to acquire and retain customers.
Price war & the Indian regulator cause mobile stocks to tumble
The Indian mobile sector, a darling of the Indian stock markets has just fallen from grace. Fears that a renewed tariff war may bring its dream run of profit growth to an end and could force smaller players to sell out or shut shop has caused the leader, Bharti Airtel to lose 17% in two trading sessions. Reliance Communications has fallen 11% and Idea Cellular fell 8%.
Mobile tariffs in India are already the lowest in the world. On Monday, Reliance (RCOM) announced the slashing of tariffs across the board for local, roaming and long-distance calls to 50 paise, i.e under a cent per minute.
In addition to this, the Indian Telecom regulator suggested on Monday that telecom operators shift to per-second pricing as opposed to per-minute. After the Indian stock market got jittery with this announcement and telecom stocks started tumbling, the regulator (TRAI) was seen as diluting their position on this statement, stating that proposal on per-second billing was at an initial stage and too much was being read into the issue.
TRAI chairman J.S. Sarma also said that mobile operators were free to oppose the scheme and the regulator would consider their opinion during the consultation process.
Sunil Mittal, the chief of Bharti Airtel said tariffs were best left to market forces.
Reliance plans IPO for Infrastructure arm. Hopes to raise $1Bn for 10% via IPO.
India’s second largest Mobile Operator, Reliance Communication plans to seek regulatory approval for selling 10% of Reliance Infratel (its infrastructure arm) for close to $1Bn.
Reliance Infratel sold a 5 percent stake to global investors for about $290 million in 2007. It had revenue of more than $1 Bn and a profit of $300 Mn in the year ended March 31, according to Billionaire Chairman Anil Ambani.
The share sale will help fund an expansion of the nationwide network of 48,000 towers at Reliance Infratel as demand for leasing networks is likely to double in the next couple of years according to Ambani.
A mobile revolution in rural India
The total mobile penetration may have reached 14 per cent of India’s population. However, industry experts assert 13 per cent of this is in urban centres and only one per cent in villages.
The opportunity is not lost on market players like Bharat Sanchar Nigam Limited and Reliance Communications who have been present in this segment for a while.
Now Hutchison Telecom, Bharti Airtel and Tata Teleservices too have descended on the turf with big network expansion plans and innovative marketing strategies specially tailored for these regions.
“The B and C category census towns are raking in good business for us. Currently, almost 35 per cent of our business comes from these circles. However, the potential here is immense as only a per cent of the total population actually use mobile phones,” says a spokesperson for Tata Teleservices.
TTS, operating in 20 of the existing 23 mobile telephony circles in India, is using a door-to-door marketing strategy, involving members of gram panchayats and trained market-feelers to make residents of villages and small towns aware of the usefulness of mobile telephony and how the system of pre-paid refills work.
According to the company spokesperson, value-for-money handsets priced between Rs 1,000 and Rs 1,400 with a plethora of tariff plans to choose from is what is driving subscription growth in these regions.
Sanjay Kapoor, joint president, mobility, Bharti Airtel, agrees with the trend and says his company had enjoyed a growth of 166 per cent in June of 2005-06 in circle C towns, as compared to a growth of 65 per cent in metros.
“We are concentrating on improving network connectivity in the rural areas along with existing circles we and are spending $1.5 billion this year for that purpose only,” says Kapoor. Airtel is appointing distributors at the tehsil level and using existing channels of fast moving consumer goods in these areas to push their products.
Reliance Communications will also make investments to the tune of Rs 1,500 crore (Rs 15 billion) till March 2007 to enhance its network in the eight global system for mobile communication circles it operates in.
The company plans to extend its GSM network to 4,000 towns in the existing circles of Bihar, Orissa, West Bengal, Himachal Pradesh, Assam, north east, Madhya Pradesh and Kolkata. Currently, its GSM network covers 340 towns in these circles.
A company spokesperson says the company has added over 200,000 subscribers in its eight Category C circles in the previous quarter alone. Reliance is importing handsets in bulk for use in these markets and is trying to leverage its low tariff plans to increase subscriber vase.
Handset manufacturers too are gearing up. Devinder Kishore, director of marketing at Nokia India, notes that handsets priced between Rs 10,000 and Rs 15,000 are reasonably popular in these regions.
“While the handset market in India is growing at an approximate rate of 75 per cent annually, about 30 per cent of the demand comes from metros now. The rural market, therefore is growing rapidly in terms of sales and it has a tremendous potential in future,” he says.
Nokia is using channels with territorial reach like Doordarshan and All India Radio to reach the interiors. The company has also incorporated nine Indian languages on certain handsets to promote sales.
Says Dinesh Sharma, marketing and sales head of Samsung CDMA, “Sales in category C towns are growing at a rapid pace. Currently the fasted growing circles for us are the categories A and B. Sales in metros have been slower, although absolute numbers are growing as almost a per cent of urban populace buy a phone every month”.
Sharma feels that for rural areas, incorporating local languages in handsets will become a focus area in future, as will be voice short messaging service, the latter dependent on service providers.
“Rural India is keen on high feature phones but not as much as urban India. A customer in the rural area is happy to have features, which are available in the urban markets. They are happy to have colour handsets, other accessories like phone book wherein he can store details of contacts, games, alarm tones and so on,” explains H S Bhatia, National Product Group Head- GSM Division, LG Electronics India.
Industry experts feel an estimated investment of around $6.5 billion would be needed to increase India’s rural tele-density to four per cent from the current one. With the current investments, the expectation may not be far off the mark.
Source- http://inhome.rediff.com
Technorati : BSNL, Bharti Airtel, Hutchison Telecom, India, Reliance Communication
Ice Rocket : BSNL, Bharti Airtel, Hutchison Telecom, India, Reliance Communication
