Telecom Operators Eye Internet Data for Big Bucks

As it inches closer to the 100-crore subscriber base milestone, telecom industry identified mobile Internet data as the next big thing for revenue generation even as consumers were burdened with up to 100 percent rise in charges for such services in 2014.

From a subscriber base of nearly 91.5 crores at the end of last year, the industry was hoping to reach the 100-crores mark by the end of 2014, while various players were seen devising new ways to expand their revenue base and caught on to the growing interest among consumers for mobile Internet as a big opportunity.

Towards the end of the year, Airtel announced plans to charge extra for Internet calls through VOIP applications like Skype and Viber, but had to abandon the idea after a public outrage.

As more telecom players firm up plans for charging on such services, the sectoral regulator Trai, which has power to control tariffs, may soon come out with regulations for messaging and calling applications.

During 2014, telecom operators gained heavily from rise in mobile Internet usage which was driven by applications like WhatsApp, Facebook, Skype and consumer adopted them as these applications reduced their phone bill.

"In year 2014, operators saw a healthy increase in subscriber revenue on back of nearly 100 percent growth in data revenues and very favourable take-up of OTT (over-the-top) applications like WhatsApp, Facebook etc," PwC Leader Telecom Arpita P Agarwal said.

Airtel in July-September 2014 period reported 94.6 percent increase in mobile data traffic over previous year accounting for 11.1 percent of its total revenue. Idea Cellular reported over 125 percent jump in mobile data in same period.

Vodafone reported data revenue of Rs. 2,552.5 crores in the first half of 2014-15 and it now contributes 13.5 percent to the company's service revenue.

"Data will continue to drive growth in revenue and we expect to stay focused on our data penetration. As and when the market matures, we will make necessary investments to stay relevant to mass market customer's needs," Uninor CEO Vivek Sood said.

Uninor's 20 percent customers have subscribed to its mobile Internet services.

GlobalWebIndex (GWI), in survey of the Asia Pacific region including India, found that 45 percent users of such applications use them because messaging is free on them.

Top mobile messaging apps in India include WhatsApp, WeChat and Facebook Messenger, GWI survey said.


"In 2014, we saw an increase in adoption of rich media based services amongst our subscriber base, which is also a strong indicator of evolution of data users. As we step into the new year, we believe that video consumption on mobile will get even more popular amongst the youth," Aircel Chief Marketing Officer Anupam Vasudev said.

Experts feel that launch of new 4G network specially Reliance Jio Infocomm and new entrants may bring some respite to consumers.

July 2015 is the deadline for 4G spectrum holder companies to provide 90 percent coverage in metro area, if they have spectrum there, and 50 percent of rural area within five years. If a company fails to meet roll-out conditions, spectrum will be taken back.

Industry body Cellular Operators Association of India has sought extension of this deadline indicating that companies are not ready with 4G network to start service.

For seeking extension COAI has cited delay in development of technologies for it and public interference in installing mobile towers due to apprehension of health hazard from radiation emitted from it.

Latest data from Telecom Regulatory Authority of India shows that the telecom subscriber base in the country increased by 6.4 percent to 96.26 crores in October, from about 91.5 crores at the end of 2013.

As per industry estimates, the total subscriber base was earlier expected to grow to 100 crores by end of 2014.

Wireless connections dominated market which grew by about 7 percent to 93.53 crores in October 2014.

As per Trai data, there were about 26 crores Internet users in the country till June which included over 24 crores consumers using Internet over their mobile or through dongles.

Internet penetration in the country increased by about 30 percent, courtesy smartphone and dongles.

The incumbent telecom operator Airtel, Vodafone, Idea Cellular continue to dominate market in terms of both market share and revenues. The companies are now posting increase in profits as the competition has reduced in most of the service areas where they operate.

Even as the profitability of telecom operators is improving, COAI is of the view that it is still below the level witnessed 3-5 years ago.

"While the profitability of the industry is improving, it is much below the level that the sector was witnessing 3-5 years ago. The revenue growth has reduced to 8.5 percent during 2013 from 15.4 percent in 2011," COAI Director General Rajan S Mathews said.

Sistema Shyam Teleservices (SSTL), which offers services under MTS brand name, said the though sector in India continues to be under huge debt, the revenues for the sector have started to improve.

"However, the health of the telecom sector can improve a lot faster if regulatory policies which ensure a level playing field," MTS India Head of Strategy Ranjan Banerjee said.

The total revenue of industry or gross revenue of telecom service providers increased by about 10 percent to Rs. 62,919.19 crores in quarter ended June 2014, from Rs. 57,260.98 crores a year ago.

The adjusted gross revenue, which operators count as revenue earned from selling telecom services, grew even at higher rate of 13.49 percent in April-June 2014 quarter to Rs. 43,851.85 crores from Rs. 38,640.3 crores registered in same quarter a year ago.

New players Videocon Telecom, Uninor, SSTL have seen growth but are yet to achieve dominating position in the market as they operate only in select service area.

Uninor posted highest revenue growth among all other telecom units of its Norway based parent firm Telenor in quarter ended September.

Videocon, which operates in four service areas, shared that its revenue jumped by 160 percent to Rs. 182 crores in the second quarter ended September 2015 with Strong growth in data revenue.

COAI said that in the last 2-3 years, the industry has been under huge financial stress due to high regulatory costs such as one-time license fee, spectrum usage charges and higher capex requirement resulting from spectrum auctions.

Telecom operators have attributed rising rates of services to inflation, building of new infrastructure to add more capacity specially through spectrum purchase as reason for rise in mobile Internet rates.

This year the industry also jointly made bids of about Rs. 62,162 crores for buying spectrum - which act like pipe for sending data on mobile.

The industry is gearing for another auction for three sets of spectrum- 800MHz (CDMA), 900MHz and 1800MHz (currently used for GSM services). Auction of these airwaves is planned for February 2015 from which government expects to collect minimum of Rs. 9,533 crores in current fiscal.

Most of the spectrum proposed to be auctioned are currently held by leading operators namely Airtel, Vodafone, Idea Cellular and Reliance Communications through their licence expiring in 2015-16.

Non-availability of additional spectrum will make auction tough for these incumbents.

The other issue before dominating telecom operators is presence of 11 telecom operators which makes it a competitive and good for consumers. However, the sector players have demanding government to frame rules that could help sector to consolidate. Many players in the sector are bleeding and only less than half of them are posting profits.

Government framed mergers and acquisition rules in February but it did not help industry players in making any move. Guidelines like spectrum sharing and trading which would have supplemented it are yet to be announced.

Airtel attempted to buy business of Loop Mobile but failed to crystallise it in the absence of permission from the DoT.

In 2015, new players that hold broadband wireless access spectrum, mainly Reliance Jio Infocomm, are expected to make entry and make market more competitive.

Source: NDTV

Digital India initiative: Government to connect 55,000 villages with phones by December 2016

The telecom department plans to take mobile network by December 2016 to nearly 10 per cent of Indian villages that are still unconnected, to make the government's ambitious Digital India programme more pervasive. Of the 6,00,000 villages in the country, about 55,000 are still awaiting mobile connectivity.

These villages fall primarily under the red corridor — a vast swathe affected by left-wing extremism — and in the Northeast. "In sync with PM Narendra Modi's vision, it has become imperative to offer digital services on mobile platform," telecom secretary Rakesh Garg said, speaking at the 'Good Governance Day' programme hosted by the Ministry of Communications and IT.

Under the Rs 1.13 lakh crore mega Digital India initiative, the government aims to connect every nook and corner of the country with broadband Internet, and deliver services electronically through mobile phones. The Trai had earlier in a study revealed major network gaps in the northeast region. Arunachal Pradesh had the highest coverage gap at nearly 56 per cent, followed by Meghalaya with 38 per cent, Mizoram with 32 per cent and Manipur 24 per cent.

In September this year, the Cabinet had approved spending of Rs 5,300 crore to install 6,673 telecom towers across 8,621 villages, primarily boosting telecom network along national highways in the Northeast.

"The department is setting up telecom towers in Northeast with a pecuniary budget of Rs 5,300 crore and additionally deploying 2,199 towers in left wing extremism affected areas," Garg said. Setting up mobile phone network in the Naxal-affected regions is one of the long-pending demands of the home ministry, which has recently asked the telecom department to fasttrack deployment. Garg said the work would be completed by the end of September 2015.

Source: ET

Google fibre services in India soon

Internet giant Google is in talks with the IT Ministry to roll out optical fibre-based broadband services as part of the Digital India programme. Google plans to roll out a fibre network in a small area as a showcase project.

According to top officials in the IT Ministry, the discussions are at an initial stage. “We are keen to partner a company like Google in furthering the Digital India plan. Modalities have to be worked out,” the official said. One of the issues being discussed is whether Google can be allowed to do the project without having to acquire a telecom licence.

Google has launched a similar programme in the US called Google Fiber where it provides broadband internet and television to a small area. The service was first introduced in Kansas City. In February 2014, Google announced that it had chosen another 34 cities as candidates for expansion.

When contacted, Google India spokesperson said that the company continuously engages with the Centre on various programmes. The spokesperson did not comment specifically on the fibre project. However, IT Ministry officials said that some experts from Google’s US operation are expected in India to evaluate the project.

In a 2012 blog post, Google had said that Google Fiber will offer a different experience from other internet and TV providers.

“Our internet is 100 times faster. Our TV has hundreds of channels in crystal clear HD. And we’re offering quality service plans that are affordable,” Google had said while launching in Kansas.

For players like Google, internet proliferation is key if it wants to reach the next billion consumers.

However the big challenge is that telecom companies are cash strapped to quickly roll out infrastructure that supports data services. In India, for example, most of the telecom operators are struggling under huge debt and high spectrum costs.

Therefore players such as Google and Facebook have been experimenting with balloons and solar-powered drones to address the need for cost-effective connectivity. The more people are connected on the Internet the more money can be made by selling advertisement space on websites and mobile portals.

This strategy fits in very well with the Indian Government’s agenda of taking internet and digital technologies to the masses.

Source: HBL

Reliance Jio gets security nod for 4G services, but with riders

Reliance Jio Infocomm Ltd has received security clearance to start 4G technology-based broadband services in six circles, but with riders.

The Department of Telecommunications (DoT), while giving its approval, has asked the company to plug gaps in the lawful monitoring requirements and interception of data services, including Yahoo and Gmail.

The security go-ahead is the last major clearance before company can start services.

The DoT has granted RJio permission to start data services in Kolkata, Karnataka, Bihar, Odisha, Andhra Pradesh and Gujarat. The operator’s demonstration of Lawful Intercept and Monitoring (LIM) system in these circles was found to be adequate, though there were some concerns, sources close to the development told BusinessLine.

For example, the security agencies were unable to read, view or listen to data flowing through encrypted services and proprietary protocols such as Yahoo Mail and Gmail. Before commercial launch, the DoT wants RJio to facilitate pushing of legally intercepted traffic to security agencies in readable, printable and audible formats (depending on the type of data). Further, it has asked the company to set up servers on its premises.

In addition, the company has been told to install systems that would enable security agencies to intercept e-mails, track chat IDs, IP (Internet protocol) addresses and voice over Internet protocol calling of specific users.

The DoT also wants to carry out certain tests after the launch to ensure the proper interception and delivery capacity of the monitoring system, according to the sources.

Earlier, the DoT had assigned signalling point codes to RJio, a move that would enable the company provide international and national long-distance services.

Mumbai-based RJio had won spectrum in the 1800 MHz spectrum across 14 circles in the last round of auctions. It also has airwaves in the 2300 MHz in 22 circles.

The company had taken licence in 2010 and has to complete the rollout obligation by 2015.

Source: HBL

India to have around 15m 4G subscribers by 2015: PwC

India is expected to have 10-15 million 4G LTE subscribers next year, driven by competitive pricing, superior network experience and affordable smartphones.

As PwC India today shared top trends and wishlist for Indian telecom industry in 2015, it said next year will witness multiple Indian players launching 4G on a more efficient 1,800 MHz spectrum and subscribers will adopt 4G whole-heartedly to satiate their need for mobile data. Mukesh Ambani-promoted Reliance Jio Infocomm is gearing up to launch its 4G services on both TD-LTE and FD-LTE technologies early next year.

“We expect 4G LTE subscribers to reach 10-15 million by December 2015 driven by competitive pricing, superior network experience and affordable smartphones,” said Arpita Pal Agrawal, leader — Telecom, PwC India.

Bharti Airtel is slowly expanding its 4G presence in select cities using TD-LTE technology. Airtel is also likely to launch 4G on FD-LTE next year. Currently, Airtel and Malaysia’s Maxis-joint venture Aircel have limited 4G presence. Though Aircel has announced the launch of 4G services, its website does not have any tariff details or other related data.

Yesterday, Uninor, a subsidiary of Telenor, said it would start trials on narrow-band LTE due to limited availability of spectrum.

The report said Public Wi-Fi will become a reality. India will see a significant spurt in Wi-Fi hotspots driven by both Government “Smart Cities” and “Digital India” and private sector initiatives.
In the wearable space, Indian consumers have shown most interest in buying fitness monitors (80%), smart watches (76%) and internet-enabled eyeglasses (74%).

In this sector, the price points are expected to go down with Chinese and local manufacturing increasing and the increasing penetration of smartphones and their ability to carry confidential subscriber data will be a significant driver for traction in security applications for smartphones.
Given the steadily increasing divergence between data revenues and cost, a trend that will likely sharpen in 2015 is that the mobile companies will start looking at unconventional monetisation options.

Source: Tribune India

India's 4G subscriber base to reach 10-15 million in 2015

PwC India today shared top trends and wish-list for Indian telecom industry in 2015 and said India will have 10-15 million 4G LTE subscribers next year.

Incidentally, Reliance Jio Infocomm, the Mukesh Ambani-promoted telecom venture of Reliance Industries (RIL) are gearing up to launch its 4G on both TD-LTE and FD-LTE technologies early next year.

“We expect 4G LTE subscribers to reach 10-15 million by December 2015 driven by competitive pricing, superior network experience and affordable smartphones,” said Arpita Pal Agrawal, leader – Telecom, PwC India, in a statement.

This apart, Bharti Airtel, the Sunil Mittal-promoted telecom operator, is slowly expanding its 4G presence in select cities using TD-LTE technology. Airtel will also likely to launch 4G on FD-LTE next year.

Currently, Bharti Airtel and Malaysia’s Maxis-joint venture Aircel have limited 4G presence. Though Aircel officially announced the launch of 4G services, its website does not have any tariff details or other related data.

On Thursday, Uninor, a subsidiary of Telenor, said it would start trials on narrow-band LTE due to limited availability of spectrum, one of the main demands of Indian telecom operators.

With limited spectrum and lack of eagerness to invest in advanced technologies such as 3G and 4G, Indian telecom operators are unable to increase their ARPU. For instance, Indian operators’ ARPU stands at nearly $3 against Verizon’s ARPU of $47. The huge difference is because of income levels and investment in network technologies that can improve customer experience.

At a telecom event organized by mobile network vendor Ericsson and COAI, participants urged Indian telecom minister Ravi Shankar Prasad to release additional spectrum to ensure better services and coverage.

One of the demands of Ericsson India head Chris Houghton was investment by telecom operators in advanced networks and availability of spectrum.

The following is the wish list of PwC India

# In 2015, Indian players will be launching 4G on a more efficient 1800 MHz spectrum and Indians subscribers will adopt 4G wholeheartedly to satiate their need for mobile data

# Public Wi-Fi will be a bigger phenomenon; while wired broadband will remain work-in-progress. India will see  a significant spurt in Wi-Fi  hotspots driven by both Government Smart Cities and Digital India and private sector initiatives. Wired broadband for retails consumers is likely to remain work in progress by end of 2015.

# In the wearables space, Indian consumers have shown most interest in buying fitness monitors (80 percent), smart watches (76 percent) and internet-enabled eyeglasses (74 percent). Price points are expected to go down with Chinese / local manufacturing.  Increasing penetration of smartphones and their ability to carry confidential subscriber data will be a significant driver  for traction in security applications for smartphones.

# Given the steadily increasing  divergence between data revenues and cost, a trend  that will likely sharpen in 2015, mobile companies will start looking at unconventional monetization options. These would span strengthening of internal capabilities to offer differentiated network experience (Smart Pipes), as well as harnessing the extended ecosystem including OTT plays.

# Current M&A guidelines have not been able to stimulate any consolidation in the sector despite all policy makers having expressed the need for it. With new network launches expected in 2015, rapidly growing data market will witness intense price competition and will rekindle memories of 2010 voice led price wars.

Source: Telecom Lead

Signalling Point Codes allotted to Reliance Jio in Mumbai, Delhi, Karnataka and Kolkata

The Department of Telecommunications (DoT) has assigned signalling point codes to Reliance Jio Infocomm Ltd for launching its national long distance (NLD) and international long distance (ILD) services. The codes have been allotted in Mumbai, Delhi, Karnataka and Kolkata. Signalling Point Codes are required to establish interconnection between two networks.

The codes have to be used within six months, or they would be withdrawn, according to the regulations under which they were issued. Reliance Jio has pan-India 20 MHz broadband wireless access (BWA) spectrum in the 2,300MHz frequency band in 22 telecom circles and 5-7MHz spectrum in the 1,800 MHz band in 14 circles which it plans to use for offering high-speed 4G services in 2015.

Reliance Jio was the only operator to acquire pan-India 4G spectrum during the $8 billion BWA auction in 2010. The operator has since signed infrastructure sharing deals with a number of major players, including Indus Towers, Reliance Communications and Bharti Airtel’s infrastructure arm Bharti Infratel.

Earlier, the company had also sought regulatory approvals to merge its two subsidiaries, Infotel Telecom Ltd and Rancore Technologies, with itself. Reliance Jio holds a unified licence, Infotel Telecom has licences for long-distance telephony licences and Rancore is an R&D unit.

Source: http://telecomtalk.info/