Indian telecom industry is gearing up for better times

India's telecom industry is at the cusp of a new beginning. After hitting many lows in the past, the sector is readying itself for better times. A new government is in place, investments are poured in from companies like Reliance and most importantly, international collaborations are being encouraged.

Developments like India and the UK going for collaboration route in the field of next generation telecommunication; new telecom minister's assurance to set things right and continue focus on quality and domestic manufacturing; and RIL's plan to invest Rs 30,000 crore, will build confidence amongst the investor's fraternity.

For a sector which has been reeling under tremendous price pressure for some time, these progresses can certainly give reasons to stay optimistic and encouraged. The government's emphasis on developing a strong domestic manufacturing ecosystem will also laid the foundation for many local domestic manufacturers, who have been exploring global markets for growth.

New Gameplans

There has been a realignment of priorities for many telcos now. Customer acquisition is the thing of the past, there is no blind competition and most importantly telcos are making efforts to highlight their value credentials amongst the subscribers.

There has been clear understanding that the sector cannot accommodate too many players in the country. Hence, consolidation is expected to drive more coherent structure in the telecom ecosystem. The consolidation wave is likely to pick up pace from the merger of state run incumbents BSNL and MTNL.

For those interests in numbers, Europe, Middle East India and Africa are jointly projected to close $50 bn of M&A deals during next few years, according to leading analysts.

Going forward, the sector is also expected to witness alliances in the space of social media, mobile payments and business intelligence. The upcoming auctions for both 700MHz and 800 MHz are expected to give much needed push to the 4G data services in the country.

Innovate and Collaborate

In technology side, a report from Cisco expects that there will be 177 million wearable devices globally, growing eight fold from 22 million in 2013. Analysts believe that this will eventually triggered the M2M and Internet of Things market, across the globe. Hence, that's an area of interest for many enthusiasts. While still in early stages in India, it will also open up a new revenue stream for telcos in the country.

The difficult times of the past have made way for the sector to start afresh and come up with new ideas to grow. Leading telcos like Bharti Airtel, Vodafone, Idea Cellular, TTSL and Uninor are extensively exploring the potential of Big Data for customer retention, market their services and improvement in customer service. There is also a strong emphasis on implementing solutions for right charging, billing and personalisation. In order to make their RoI reasonable, one may expect them to collaborate with each other to understand the customer behaviour through various intelligence tools.

Like someone says, difficult times help us innovate, choose wisely and grow in the longer run. India's telecom industry, perhaps, is learning it well...

Source: ET

Reliance Jio to invest in LTE Broadcast technology, says GSA

Reliance Jio Infocomm, the billionaire Mukesh Ambani promoted 4G telecom venture of Reliance Industries, is set to invest in LTE Broadcast technology to boost its video offerings, said a report by GSA.

The other global telecom operators that are investing in LTE Broadcast include AT&T, Verizon Wireless, EE, Three, KPN, Orange, Vodafone, Meo, Etisalat, SingTel, China Mobile, China Telecom, Smart and Telstra.

Reliance Jio Infocomm, the only pan-India 4G service provider, is in the process of rolling out 4G LTE services on both TD-LTE and FD-LTE technology. The company recently said its 4G services would be available in 2015.

Meanwhile, Bharti Airtel and Aircel are in the process of expanding TD-LTE technology based 4G services in select parts of India.

The telecom operator list shared by GSA indicates that several 4G service providers are yet to commit investments in LTE Broadcast that can be utilized for off-peak capacity to deliver new service offerings including rich media caching, or managed software updates including applications updates.

Alan Hadden, president of GSA, said: “LTE Broadcast enables innovative and profitable business opportunities for mobile network operators.”

LTE Broadcast enabled by evolved Multimedia Broadcast Multicast Service (eMBMS) technology allows telecom operators to manage networks more efficiently by multicasting content sought by multiple subscribers including live TV broadcasts, or tailored content for sporting events in stadiums or other venues.

GSA said at least 16 mobile network operators, working together with LTE systems providers and broadcast content owners, are currently deploying or trialing LTE Broadcast technology in Australia, China, France, Germany, India, the Netherlands, the Philippines, Portugal, Singapore, South Korea, UAE, UK and the USA.

LTE Broadcast supports all specified bandwidths and formats of LTE, including FDD and TDD modes and LTE-Advanced carrier aggregation. 

KT in South Korea was the first telecom operator in the world to launch LTE Broadcast commercially in January 2014.

Source: telecomlead.com

Reliance Jio, BSNL sign tower sharing deal

Reliance Jio Infocomm (RJIL) has signed a deal with state-owned telecom firm Bharat Sanchar Nigam Limited (BSNL) for leasing around 4,000 mobile towers. As per the deal, BSNL will be offering a base rate of Rs.38,000 per month for ground based towers (GBT) and Rs.24,900 per month for rooftop based towers (RBT). BSNL, however, will offer discounted rates if Reliance Jio commits leasing of at least 1,500 towers in the first year.

“The rent for ground towers will be Rs.35,000 per month and Rs.21,000 per month for rooftop towers if Reliance Jio commits leasing of 1,500 towers in first year,” BSNL director (consumer mobility) Anupam Shrivastava told PTI. He added there is also a provision of 5% discount if RJIL commits leasing of at least 1,000 towers within three months. When contacted, no response was received from RJIL on the deal.

Reliance Jio already has an agreement with Bharti Airtel, Reliance Communications, Viom Network, American Tower Company and Ascend Telecom Infrastructure to utilise their infrastructure. The company holds pan-India broadband wireless access spectrum that can be used for 4G services. Besides, it won radiowaves in the 1800 Mhz band, widely known as 2G spectrum, which is also being used for 4G services worldwide. RJIL is the first telecom operator in the country to get a unified licence for all 22 service areas in India. The unified licence, which it received in October, will allow RJIL to offer all telecom services, including voice telephony.

Source: Livemint

PM Modi's Digital India project: Government to ensure that every Indian has smartphone by 2019

The Digital India project that aims to offer a one-stop shop for government services would use the mobile phone as the backbone of its delivery mechanism. The government hopes the Rs 1.13-lakh crore initiative that seeks to transform India into a connected economy to also attract investment in electronics manufacturing, create millions of jobs and support trade.


In an interview with ET, telecom minister Ravi Shankar Prasad said the government of Prime Minister Narendra Modi wants to ensure a smartphone in the hands of every citizen by 2019. Currently, nearly 74% of the population has mobile phones, most of which though is in the hands of urban India.

"We want to ensure that all the services can be provided through a mobile handset, especially, health, education, various government services and retail," Prasad said. "We want it (handset) to be used as a tool for empowerment. We will need to incentivise its usage in order to promote the social and the economic objectives of the government."

In order to use the mobile phone to help achieve financial inclusion, the government will need to structure the delivery of financial services in a manner that encourages a villager to go for mobile banking, the minister said. For instance, the Pradhan Mantri Jan Dhan Yojana, a financial inclusion plan the Prime Minister announced on August 15, can be effectively rolled out through mobile handsets. The programme seeks to give every household in rural India access to bank account, along with a RuPay debit card and insurance cover of Rs 1 lakh. At present, nearly 60% of the nation's population doesn't have access to financial services.

Digital India promises to transform India into a connected knowledge economy offering world-class services at the click of a mouse and will be implemented in a phased manner, according to information released by the government last week.

Plans to digitally connect the entire country will be supported by 20- and 40-hour modules on digital literacy in regional languages, which the government plans to run over the next few years. "During a presentation, the PM remarked IT+IT equals IT. This means India Today plus Information Technology (through Digital India) will yield India Tomorrow," said Prasad.

The government feels that open access to "broadband highways" across cities, towns and villages would give a fillip to trade across the country. "The other important benefit we see is surge in e-commerce. If we can bring broadband to the remotest corners of the country it will give rise to trade and warehousing," Prasad said.

Supporting the initiatives will be 6-7 manufacturing clusters for electronic goods which have been approved to be set up in Jharkhand, Maharashtra and Madhya Pradesh for products such as mobile handsets, microchip and chip-less designs and set-top boxes, he said.

The intention is to bring down net electronics imports to zero by 2020, from about $100 billion now, a move which will help the country control its current-account deficit. As things stand, net annual electronics imports could rise to $400 billion by 2020, outgrowing oil imports.
"The PM is absolutely focused on making India the manufacturing hub and we see massive potential in electronic manufacturing," Prasad said.

Modi had listed Digital India and local manufacturing as among the top priorities for the new BJP-led government during his Independence Day speech on August 15.

In his Budget for this fiscal year through March 2015, Finance Minister Arun Jaitley had introduced a slew of measures to boost electronics manufacturing, such as a basic customs duty of 10% on telecommunication products outside the purview of the Information Technology Agreement and investment-linked deduction for semi-conductor wafer fab units.

Prasad said the government is working towards establishing the first manufacturing cluster by March next year.

According to the minister, the programme has already generated huge interest nationally and internationally. "We are holding a conference with the IT ministers of various states on August 26," to decide on the modalities of how to implement the project as state participation will be key, he said.

Referring to his meetings with global corporate honchos, Prasad said companies such as American network equipment maker Cisco Systems wanted to access benefits of cluster manufacturing.

"Facebook has also expressed interest in partnering with the government in delivering governance programmes such as e-education," he said, referring to his meeting with the US social media company's chief operating officer Sheryl Sandberg, two months ago.

Prasad though admitted that the main backbone of Digital India — National Optic Fibre Network (NOFN) venture — had seen virtually "no progress" for the past three years. He said given the current focus on Digital India, which is being monitored by the Prime Minister himself, NOFN will meet all its deadlines henceforth.

To suggestions that the private sector may be roped in for the NOFN project to speed it up, Prasad said the government will continue to implement it through state-run public sector units Bharat Sanchar Nigam, Power Grid Corporation and RailTel.

As reported earlier by ET, common service centres in villages will serve as critical pivots around which most goods and services will be delivered. Once connected to broadband, an entire village's requirements of goods can be placed through these centres and people can use these facilities as one-stop shop for all their e-needs, said a senior official at the telecom department.

Source: ET 

Green energy to be used to run 2,200 mobile towers

For the first time in India, solar power will be extensively used to run 2,200 mobile towers to be set up in nine Naxal-affected areas.

The mobile towers, to be set up at a cost of Rs 3,216 crore, will be operated without any support from electricity or generators. This is for the first time in India that green energy will be used so extensively to run such a large number of telecom towers, official sources said.

Solar energy will be used to avoid interruption of electricity supply, which is irregular in most of the areas. Diesel-run generator sets create lots of pollution in addition to the problem of regular supply of fuel.

A technology developed indigenously by an Indian vendor will feed the towers with solar power to function normally in addition to charging the battery simultaneously.

On August 20, the Union Cabinet gave its approval for the project to be implemented in one year.

The Ministry of Home Affairs has been pushing for installation of mobile towers in Naxal-hit areas since 2010. The absence of mobile services has made it tough for security forces to operate and get timely help in critical situations, leading to loss of lives in some incidents.

The lack of telecom infrastructure in Left wing extremism affected states -- Jharkhand, Bihar, Chhattisgarh, Madhya Pradesh, Maharashtra, West Bengal, Odisha, Uttar Pradesh and Andhra Pradesh -- severely compromises the position of the security forces vis-a-vis the Maoist ultras.

Most of the towers will be set up in secured locations like police stations or camps of security forces so that the extremists cannot target them for destruction.

Source: ET

Telecom industry to benefit from e-commerce boom: survey

Indian e-commerce companies will be able to drive the next phase of growth for the telecom companies wherein they would be able to generate additional revenue of Rs. 48,000 crore and EBIDTA of Rs. 17,400 crore over the next three years, according to a study.

A joint study conducted by Google India and A T Kearney said with over 155 million mobile Internet users at present, India will see a major mobile explosion as the Internet user base will more than double to 480 million by 2017. It is estimated that in next three years, smartphone penetration will grow six times to touch 385 million people and the number of users who transact online will grow to 160 million.

The study says data consumption on mobile phones will triple, and consumers will buy five times as much content.

Nikolai Dobberstein, a Partner at AT Kearney, said, “Indian telcos are poised to leapfrog directly into a digital play since the shift from data to digital will happen much faster in India, as more digital content and services are adopted by users. By FY17, the Indian telecom industry is expected to reach $35 billion in revenues, with data revenues growing at over 70 per cent annually till then and with new digital VAS streams emerging and growing exponentially. Indian telcos may have had varying degrees of success with digital content and services in the past, but the outlook for these services, as well as digital customer engagement, which can unlock massive opportunity in e-stores and e-care, is extremely positive.”

The study also looked into consumer lifestyle needs and telcos’ internal digitisation capabilities to compile a list of four priority areas that could unlock billions of dollars of cumulative value for telcos. These are e-store and e-care, media content and services, mobile business apps for SMEs and mobile payment.

Rajan Anandan, VP and Managing Director of sales and operations, Google India said, “Indian telcos have the opportunity to significantly expand the pie by catering to unmet demand in online music, video and online recharges.”

The study outlines that by 2017, data and paid content consumption will double organically to 470 MB data per user per month and $1.6 in content revenue per year. Global markets have seen similar shifts as they matured from voice to messaging and from data to digital. Markets such as Japan and Korea have taken up to 10 years to move from data to digital, but India is poised to leapfrog as the country has already embraced the Internet, as seen by the massive adoption of social networking and the recent e-commerce boom.

Source: HBL

It’s time to say hello to Reliance Jio

RJio has the financial muscle, but it may take a while before it overtakes its competitors and emerges as a key player

The prospect of the Big Boy of oil and gas, Reliance Industries, muscling its way into the telecom sector has been watched with much interest in recent years.

So, will the entry of Mukesh Ambani’s Reliance Jio Infocomm (RJio) into the fray force the top players to rethink their strategies?

Not necessarily.

It has been nearly four years since the company first successfully bid for and won spectrum for offering data services on a pan-India basis. But the venture has not commenced active operations yet.

In the meantime, entrenched players in the market have emerged much stronger and have enhanced their revenue share. Even in the broadband space, BSNL, Airtel, RCom, Idea and Vodafone have very strong presence. These operators together command nearly 85 per cent market share.

In wireless mode
In the spectrum auction this February, RJio bid for spectrum to offer voice services in 14 circles.

It also signed tower-sharing agreements with several players. But even after these moves, what its bouquet of offerings will be is unclear.

It now appears that RJio would not just be a data services provider but would offer a combination of broadband (wireless) and voice services. Recent data from the telecom regulator indicate that nearly 92.5 per cent of all internet consumption in India takes place through the mobile wireless mode.

This means that RJio will first have to look at adding a substantial number of mobile subscribers first before getting them hooked to its data and internet plans.

In the mobile services space the top three operators have a 70 per cent revenue market share.

Other prominent players such as RCom, Tata Teleservices, BSNL and Aircel too would compete for subscriber and revenue share. So, RJio’s task is certainly not going to be easy.

One differentiated strategy could be that, given that the metros and top cities are already saturated, it will set its sights on smaller cities.

A recent report from the telecom regulator shows that while urban teledensity is 139.7 per cent, the figure for rural areas is just 43.7 per cent. So there is an undertapped market to target for RJio.

Not for tariff war
Then, there are reports that it may offer 4G LTE (long-term evolution) services, where speeds are likely to be faster than even 3G offerings.

But handset compatibility would need to be worked out and smartphones need to be configured to work with 4G technology.

The company has invested an estimated $8-10 billion thus far in capex and spectrum charges; so it is unlikely to start a tariff war as a new entrant. It would know from the experience of new entrants in the last few years that playing the tariff war against seasoned incumbent players is a sure way to lose money.

While over time RJio may emerge as a strong fifth or sixth player in the telecom market, trying to race to the top through tariffs would surely mean a race to the bottom.

The industry itself simply cannot afford any more tariff wars, as evidenced by the kind of erosion in margins and realisations of operators that it led to during 2009-12.

Looking for clarity
More clues may emerge if it decides to bid for spectrum in the auction slated for early 2015.

Of course, if the company does take the inorganic route to expansion, possibly acquiring the weaker operators, it would certainly stand a good chance.

Maybe that’s one thing the smaller players in the telecom space could look forward to.

Source: HBL