Operators speak out against TRAI recommendations (India)
Indian telecoms regulator Trai had recommended that refarming of airwaves in the 900 MHz band, largely held by incumbents and BSNL, be undertaken next year, and industry experts estimate that leading mobile phone companies will have to pay about $17.1 billion to retain the airwaves they hold, according to a report by ET. Trai had said that the spectrum available with incumbents in the 900 MHz band should be replaced by spectrum in the 1800 MHz band, which should be charged at the price prevalent at the time of refarming.
In response to this, the chief executives of five mobile phone companies – Bharti Airtel, Vodafone, Idea, Uninor and Videcon – had told telecom minister Kapil Sibal that accepting the regulator’s ‘flawed, retrograde, regressive and uncertain recommendations would irretrievably harm consumer interests, ring the death knell for the sector and lead to prolonged disputes and litigation.
As per the report, Bharti Airtel CEO for India and South Asia, Sanjay Kapoor, Vodafone India MD and CEO Marten Pieters, Idea Cellular managing director Himanshu Kapania, Uninor chief executive Sigve Brekke and Videcon Telecommunications’ director and CEO Arvind Ball had also alleged that the regulator had not carried out any study to examine the socio-techno-economic aspects and had ignored contractual and other rights of the affected operators.
The report claims that Vodafone’s latest communication further adds that substitution of 900 MHz with 1800 MHz will lead to disruption of services for hundreds of thousands of mobile customers severely disrupting the quality of services for years to come while also pointing out the huge costs for setting up additional towers for the 1800 MHz network was likely to translate to higher tariffs for customers.
Vodafone said that extension of licenses with a different type and quantum of spectrum was legally flawed added that mobile permits were already technology neutral.
TRAI plans legal action against Airtel for violation of MNP guidelines (India)
Telecom Regulatory Authority of India (TRAI) is reportedly planning to take action against leading telecom operator Bharti Airtel for violation of norms regarding Mobile Number Portability (MNP). According to reports, the regulatory authority had previously issued a show cause notice to the operator for the same.
As per sources, TRAI has reportedly been receiving complaints from users across different operators for rejecting their request for MNP services, with Bharti Airtel accounting for as many as 893 complaints, the largest number amongst all operators.
Further, reports reveal that TRAI wrote a letter to the Department of Telecommunications (DoT) stating that the regulatory authority had sent a team of officers to various network operators for analyzing the reason behind rejection of MNP requests, and has found that operators have not been complying with the MNP guidelines.
Airtel, Vodafone and Idea threaten to pull out of 3G services (India)
India’s leading telecom operators Bharti Airtel, Vodafone India and Idea Cellular have reportedly threatened to pull out of 3G services following the government’s proposal to disallow 3G Intra Circle Roaming. According to reports, the firms have written a letter to the Prime Minister expressing their concern over such a decision which has been signed by Sunil Mittal, Chairman and CEO, Bharti Airtel; KM Birla, Chairman, Aditya Birla Group and Vittorio Colao, Group CEO, Vodafone.
As per sources, the firms have said in the letter that by not allowing 3G Intra Circle Roaming, the government would be going back on what was promised during the pre-auction confirmations. Further, the telcos have asked the government to refund the amount spent by them during spectrum action along with interest as compensation for their expenditures.
Reports suggest that while the telecom firms claim that the government is going back on its technology-neutral stand, the Telecom Ministry along with the Telecom Regulatory Authority of India (TRAI) have said that the roaming agreement is illegal as it is equivalent to spectrum sharing.
Sources claim that after the 3G spectrum auction held last year, the operators had entered into roaming pacts with one another in an attempt to offer services in those circles where they could not win the bid. Further, reports also claim that the Department of Telecommunications (DoT) may revoke 3G spectrum of five telecom service providers – Bharti Airtel, Vodafone, Tata Teleservices, Aircel and Idea Cellular, for violation of licence agreement by offering 3G telecom services in states where they do not have spectrum.
Vodafone India may begin IPO process (India)
Vodafone India may be planning on an Initial Public Offering (IPO) soon as hinted by the operator’s country head, Marten Pieters, in reports. As per sources, Pieters said that they will probably seriously consider it now and start preparations, as a lot needs to be done to go from a private to a public company so that work is on the way which will take time.
Vodafone, the second largest operator in terms of revenue in the country after Bharti Airtel, is hopeful of a more level playing environment in the coming years with weaker operators leaving the market and liberal norms recommended by TRAI for mergers within the industry.
As per sources, Pieters said the company has been spending roughly $1 billion a year in capex along with additional expenses such as 3G licence, costs for additional spectrum and renewal of existing spectrum licences among others. Further, the increasing price wars amongst the various operators to maintain their stronghold in the market has resulted in an industry tariff average of US$ 0.01 per minute and is being considered as one of the most competitive mobile markets in the world.
Bharti Airtel reports highest earnings of $ 2.03 billion in the first quarter (India)
Telecom Regulatory Authority of India (TRAI), revealed the earnings for the Indian tele-companies during the first quarter of 2011-12, with Bharti airtel leading the way by accounting for 22 percent of the total revenues of US$ 9.321 billion.
As per TRAI’s India Telecom Services Performance Indicator Report, Airtel had the highest gross revenue at $ 2.03 billion, followed by Vodafone at $ 1.37 billion, Idea Cellular at $ 914.59 million and BSNL at $ 880 million.
The revenues for Reliance Communication, MTNL, Videcon and Quadrant Televentures, showed a decline and were at $ 599.3 million, $ 149.2 million, $ 32.24 million and $ 10.22 million respectively. Further, other telecom operators such as Tata Teleservices reported earnings of $ 569.6 million, followed by Aircel at $ 306.3 million, Unitech at $ 107.1 million, S Tel at $ 7.657 million, Loop telecom at $ 36.98 million and Shyam Sistema at $ 55.47 million.
As per sources, the report also showed that the gross revenue had gone up by 3 per cent from the previous quarter and 13 per cent compared to $ 8.228 billion earned in the same period last year. Further, the adjusted gross revenue (AGR) on which the government charges the license fee grew by 3.56 per cent in the first quarter. As per reports, telecom operators are charges a licence fee based on the category they fall in, such as 10 per cent of AGR in the metros and category ‘A’ areas, 8 per cent in in category ‘B’ areas and, 6 per cent category ‘C’ areas.
TRAI proposes easier rules for M&A and spectrum sharing (India)
The Telecom Regulatory Authority of India (TRAI) has reportedly proposed liberal norms with respect to mergers and acquisitions and spectrum sharing. As per reports, TRAI has recommended that mobile companies could merge their operations as long as the combined market share does not cross 60 percent.
According to sources, the telecom ministry has asked the regulator to review the proposal and is yet to approve it. Further, reports suggest that as per the proposal by TRAI, the combined entity would be allowed to control a maximum of 14 units of airwaves, but can hold up to 25 percent of the total available airwaves in that region. Analysts claim that this will enable the larger telecom players to buy out the smaller operators thereby reducing the total number of operators in the market.
TRAI has reportedly said that if the market share of the combined entity is less than 35 percent, the merger would be approved automatically, while in the event that the market share was between 35 percent and 60 percent, the proposal would have to be first approved by TRAI to ensure there is no market dominance.
As per sources, Sanjay Kapoor, CEO, Bhari Airtel (India and South Asia) has responded positively to TRAI’s new proposal saying that the proposal seems to have very balanced recommendations. He added that the spectrum sharing and M&A norms in particular seem very lucrative.
TRAI sets limit of 100 SMS per day (India)
Telecom Regulatory Authority of India (TRAI) has put a cap on the number of SMS that users can send per day. As per the new regulations, TRAI has prescribed a limit of 100 SMS per day per SIM for all the customers. Currently, telecom service providers offer SMS packages offering as many as 2000 SMS per day. As these can be made use of by unregistered persons for sending commercial communications from ordinary numbers, TRAI has introduced the regulation in order to protect consumers from receiving unwanted messages.
However, transactional messages send by bank and airlines to customers do not fall under this restriction. Further, TRAI also plans to introduce a $0.001 termination charge for every commercial text sent, excluding messages involving transactions. Consumers will have a choice to either completely blacklist the messages or receive commercial SMS as per their preference.
The regulation also requires all telemarketers to register for a phone number with a new 140 prefix. In order to ensure that they do not call consumers on the blacklist, TRAI has set up a fine of up to USD 5,017 per offence for failure to comply.
New TRAI guidelines upset VAS providers (India)
Recent directives by the Telecom Regulatory Authority of India (TRAI) on the procedure for providing Value added services (VAS) to users, have turned all VAS providers against the telecom authority as they feel that this would not only harm the industry but could also cause a revenue loss of about $317 million to the government.
In an attempt to protect the interest of the consumers, TRAI had proposed directives in July to service providers on the procedure for providing VAS to users. As per the directive, the service providers need to obtain confirmation from the consumer through SMS, e-mail or in writing within 24-hours of activation of service, and only on receiving such confirmation will the service provider be able to charge the consumer. In the event that the consumer does not respond or sends a negative response, the services will be discontinued.
The service providers on the other hand feel that such directives are not consumer friendly and could hamper the ease with which mobile subscribers currently access their favourite services such as music, sports updates, news reports, video streaming among others.
