Sunday, August 31, 2008

Onus on Govt to transform telecom market

I have always been a strong believer and advocate of improving and enhancing the quality of services to the end-customer, which the government has always professed that they do, through their policies. For a very long time, India has been the most dynamic and fastest growing telecom and mobility industry worldwide, setting new milestones in adopting best practices, in technology upgradation and most importantly, in subscriber growth.

India may have been a late starter in starting mobile telephony services, but today is the hub of global telecom growth — several factors contributing to the present day base of 300 million mobility subscribers, moving rapidly towards 500 million subscribers, which we wish to achieve by 2010.

To achieve this grand target of 500 million, there are some basic elements we as industry players and the government alike must focus on — better systems, higher quality of services and modern technology, all of which will enhance productivity and make the lives of customers that much easier. It is all about the providing the very best to the customers — only then would the industry grow by the levels we want it to.

Among the various things that we have been discussing and debating are the early implementation of 3G technology, which is underway but needs more clarity in policy, the implementation of mobile number portability and a controversial but important policy initiative through MVNO. These initiatives are exactly what I have spoken of earlier — providing choice and giving them the best options.

We have been slow on the uptake on 3G, especially at a time when competing Asian economies such as China and Korea are already using or testing 3.5G or 4G. However, evolutionary enhancement and adoption of 3G must be preceded by adoption of something very basic — number portability. This concept gives me great pleasure, because it is customer friendly and stops cartelisation which I have always been opposed to. While customer retention may become a major challenge, it will ensure that service providers value and service their customers better.

On the issue of allowing MVNOs in, I know there is much debate and controversy, but there is no denying that there is a strong latent demand.

We already have Virgin Mobile in a MVNO-like mould, with reasonable success. With the growth MVNOs worldwide, we must take a leaf from the global book and encourage international players to enter into strategic alliances with existing spectrum holders and infrastructure players who have surplus capacity. I welcome TRAI’s recommendations that MVNOs be allowed in India while the issue is being hotly debated at all possible telecom forums.

I strongly believe that MVNOs will drive collaborative growth — between themselves, service provider and even network enablers or content providers — in all facets of the wireless market facilitating lucrative partnerships. It is high time the government took a mature stand on these subjects and resolved these issues as early as possible. We are waiting for that ballistic push that will transform the Indian telecom market.

( Dr B K Modi, Global chairman Spice Corp & Spice Group )

Friday, August 29, 2008

Every second Indian to have a mobile by 2012

With India now adding 8 to 10 million mobile subscribers every month, as much as half the nation's population or one in every two citizens will own a mobile phone in India by the middle of 2012.

According to Business Monitor International, a renowned London-based research firm, 612 million mobile subscribers by 2012 will help India clock a mobile teledensity of roughly 51% by 2012. This scorching pace of growth is unlikely to falter unless the sector faces unforeseen policy disasters or if India's operators fail to roll out their networks. International Telecom Union's (ITU) projections are in the same range.

India is already the world's second largest mobile market, behind China's 500 plus million mobile subscriber base. Increasing incomes, changing lifestyles and lower cost of technology are allowing more and more Indians to ride the telecom wave.

The new numbers overtake earlier estimates, including from UBS, Citigroup and Credit Suisse predicting a mobile population of between 400 to 450 million by March 2010. Merrill Lynch and Lehman Brothers have been more even conservative, betting on a base of just 400 million by 2010. However, India will reach this milestone in 2009 itself. India's mobile revolution has been a huge social leveler, with the growing number of users tying a diverse nation in a manner rarely seen before.

Its youth are expected to contribute significantly to these surging numbers. Sir Richard Branson, founder, Virgin Group, which tied up with Tata Teleservices to launch branded services in India recently said, "An exciting market, with more than 215 million Indians aged between 14 and 25 years. Over the next three years we expect to be adding 50 million new youth subscribers".

While companies like Virgin are focused on urban market, it is clear that next set of growth will come from B and C category cities and rural India. Mobile penetration of this magnitude has the ability to revolutionize long distance learning and health care reaching some of the most far flung terrains.

Where content is concerned most analysts agree that, largely on the back of India's film industry, music services will grow fast, even if other content related revenue lags behind. Given that a reasonable part of the population by 2010 will be children below 14 and senior citizens, it seems mobile access amongst the youth and working classes will be more in the range of 70% - 80%.

Wednesday, August 27, 2008

Virgin Mobile’s operations given thumbs up by DoT

The Department of Telecommunications (DoT) has given the all clear to Virgin Mobile’s operations in India, reiterating that it does not consider the company’s services that of a mobile virtual network operator (MVNO), Indian news source The Economic Times is reporting.

The DoT previously ruled that Virgin could only be considered a franchisee of Tata Teleservices in March 2008, a decision supported by the Telecoms Regulatory Authority of India (TRAI); GSM operators, led by the Cellular Operators Association of India (COAI), contended that Virgin was offering a full range of mobile services in the same manner as a full licence holder. It is understood the latest ruling comes after consideration of Virgin’s advertisements, tariffs and services on 20 August.

Sunday, August 24, 2008

Virgin Mobile Brand In India Belongs To Us, Says Tata Teleservices

An ironic twist to the entire MVNO saga: Tata Teleservices (TTSL) MD Anil Sardana has said that they have exclusive rights over the Virgin brand in India, reports CNBC-TV18. TTSL is claiming the right of first refusal, which allows them to prevent Virgin from tieing up with any other telecom operator. So does this mean that Virgin Mobile cannot apply for an MVNO license without TTSLs approval?

Did Virgin Mobile shoot itself in the foot? Richard Branson had told ET, at the time when the service was launched, that “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.” Remember that they have entered India at a time when MVNOs are not legal, and hence done a joint venture with CDMA telco Tata Teleservices. The JV was initially the subject of much scrutiny from competitors and even the government - but the arrangement was deemed legit by those in power.

That debate over Virgin as an MVNO then led to Department of Telecom (DoT) announcing that they’re open to MVNOs in India, and eventually the telecom regulator TRAI announced guidelines for allowing MVNOs in India. No date has been set yet for the final policy, which will be announced by the Department of Telecom. In its present form, we believe the guidelines favour telecom operators, and make it difficult for MVNOs to switch telecom operators anyway. More on that here.