BSNL’s board decides to scrap GSM deal (India)
www.WirelessFederation.com/news: A tender worth $6 billion to supply equipment for 93 million mobile phone lines on the global system for mobile communications, or GSM, platform has been decided to be scraped by the board of Bharat Sanchar Nigam Ltd.
Scarcity of GSM lines have been suffered by the state run Indian telco, in its bid to increase its subscriber’s addition pace to match the bigger rivals Bharti Airtel Ltd., Reliance Communications Ltd. and privately held Vodafone Essar Ltd.
A report submitted to the Indian government by a panel set up for the restructuring of BSNL and led by, adviser to the country’s Prime Minister Sam Pitroda led to this decision. Changes in BSNL’s procurement processes and procedures have been suggested by the panel in consultation with the Central Vigilance Commission, the country’s federal corruption regulator.
It has also been alleged that the cancelling of the whole tender process has also been suggested by the panel.
Controversies hit the much-delayed tender due to various issues including legal and government directives right from the start. First BSNL was dragged to the local court by the telecom equipment maker Nokia Siemens Networks after it was disqualified for the tender, as it didn’t meet “techno-commercial criteria.
L.M. Ericsson Telephone Co., Huawei Technologies Co, Alcatel-Lucent, ZTE Corp. and Nortel Networks Corp included in the list of bidders.
Bharti going after Zain with a $10.7 bln offer
Bharti is eyeing the african market all over again, with an offer of $10.7 billion for Zain’s african operations.
With acquisition talks abuzz, Zain’s share price on the Kuwait Stock Exchange has risen by more than a fifth in about a week, raising it’s value to $16.2 billion.
Zain – Recent Developments
- Earlier in Feb, Zain CEO Al-Barrak handed his resignation to the Chairman of the board. The New Zain CEO is ex-minister Nabil Bin Salama.
- In August 2009, Reliance Communications started talks to buy Zain’s African operations.
- Etisalat was also a suitor for a 51% stake in Zain at the “right price”.
- Zain operates in 23 countries. Kuwait’s sovereign wealth fund is Zain’s biggest shareholder with a 24.6% stake and the Kharafi Group is the second largest shareholder with 13.7%.
-In 2008, Zain reported revenues of 2 billion dinars (USD 6.96 billion) and net profit of 322 million dinars. Current liabilities stood at 1.5 billion dinars at the end of March 2009.
- In May 2009, Zain announced a rare cut of 2,000 jobs of its 15,500 workforce, signalling that the expansion was probably being re-visited. Zain has spent in excess of USD 12 billion in Africa since 2005.
For more news on Zain please visit this link: http://wirelessfederation.com/news/?s=zain
Subscribe to Wifed News RSS on Zain Here: http://wirelessfederation.com/news/feed?s=zain
Indian telco Reliance plan mobile app stores
www.WirelessFederation.com/news: Online mobile applications stores has been planned by one of the India’s top mobile firm, Reliance Communications, thus opening up a new revenue stream from add-on services such as music and social networking.
The first version of Reliance Communications application store would go live for GSM customers by the end of February and expended version would be available to its CDMA customers by the end of March.
Seventh-ranked Aircel was the first Indian operator to announce a mobile applications store in January when it signed a deal with number two software services firm Infosys Technologies.
India’s RCOM global asset sale generates little interest
www.WirelessFederation.com/news: India’s Reliance Communications (RCOM) offered its global assets for sale more than a month ago but has not yet received much interest for the package.
The initial late-January deadline for bids has already been extended by RCOM; still very few potential purchasers have stepped forward.
The three main units that are reportedly up for grabs are: California-based Yipes Holding, which provides high speed data network access to customers in US metros; Vanco, a British telecom services provider the Indian telco purchased in 2008 for USD77 million; and FLAG, which RCOM acquired in January 2004 for USD211 million. FLAG undersea network operates some 65,000km of undersea fibre-optic cable that is utilized for broadband operations across the world.
However, RCOM has denied that it is looking to sell any part of its global unit Reliance Globalcom.
Games on USSD lunched on RComm GSM handsets (India)
www.WirelessFederation.com/news: Reliance user can now play games in their GSM handsets from high-end to the low-end ones, on the phone’s USSD platform. Reliance communication launched the service with the most popular games Tic Tac Toe also commonly known as Noughts and Crosses.
The game is known to be educational yet fun tool for teaching concepts of strategy. Player wins the game if he is successful in placing three respective marks in a horizontal, vertical or diagonal row.
All GSM phones are capable of Unstructured Supplementary Service Data (USSD) and associated with instant messaging type phone services.
According to Reliance Communications, Head (VAS), Krishna Durba, the product is designed keeping in mind the evolving market dynamics.
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
