3G Spectrum Auction in India - Current Status

India is supposed to be the booming telecom market all over the world.

Facts about telecom industry in India:

• India has around 490 million mobile subscribers by the end of November 2009.
• India has mobile penetration of around 40%
• Rural penetration is around 32%
• 12 mobile service providers are existing and around 4 more in line to launch their service.
• Competitive pricing strategy is compelling TSP to generate more innovative ways to create revenue
• ARPU for the companies is reducing drastically.

All these figures are just a glimpse. But the main fun will be when one of the most awaited technology will be launched in India.

3G (Third Generation of Mobile Communication)

When the world was welcoming 3G, India was struggling to implement fully functional 2.5G in India.

Now it has been a situation that the American and European market is almost saturated for 3G implementation but still, India is trying hard to launch its 3G service.

Government Stance:

Government decided to do auction of 3G much before but the process is "still" under review.

Facts:

• Initially Govt decided to auction 3G spectrum on May 2009.
• Later it got postponed to Sep 2009. Many of the service providers gathered money and were geared up for the auction.
• But government later changed its decision and decided to do the bidding program on 7th Dec 2009. And as expected, government changed its mood and postponed to Jan 14, 2010.
• Now the current news is that the auction is still delayed to mid of Feb or Mar 2010.

So what this is all about?

Government is giving reason that defense is not releasing spectrum on time. Also they are saying that now there will be only 3 private players who will get 3G after auction. This will heavily impact the business strategy of the companies who are betting big time on 3G.

People have kept lot of hopes on the competitive pricing of 3G too. Now if the government delays the auction, it will generate a vicious chain of events which will create lot of problem for many players.

Group getting affected by delay in 3G auction:

· Telecom Service Providers who have invested a lot on 3G infrastructure.

· Equipment Vendors like Alcatel Lucent, Nokia Siemens Networks and Juniper networks.

· Indian Telecom Department who are waiting for proper revenue from 3G auction.

But all this will take place only when Government takes proper steps to auction 3G.

Hopefully the auction will be ending by March end and the companies will be launching services by the end of October 2010.

Keep reading my blog for latest news of 3G telecom auction in Indian market.

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Hardik

Telecom Market Overview - Part 2

Hi Folks,

After a long time I am updating my blog. I would like to continue with my previous article in the changing mobile market scenario.

In recent days, I found one very interesting thing. The concept of "Pay-Per-Use".

Pay Per Use Strategy:

The ‘Pay-per-use’ model represents a paradigm shift in the overall telecom experience. It allows the consumer to pay only for the seconds utilized, heralding another revolution in the mobile telecommunications industry, not only in India but all over the world. This business model will help user to pay money only for the amount which the customer has actually used.

Previously, they were following the concept of 'Pay-for-all' but there was no profit related to it. The customer was using this because there was no competition. But now the scenario has changed. New companies are coming to market with very innovative strategy.

Rise of TATA-DOCOMO:

Tata-Docomo is a joint GSM service provided by TATA teleservices of India and NTT Docomo of Japan. They started a GSM service in India. But what is so special about this? The answer is the innovative model "Pay-Per-Use".

The pricing model is very innovative. They charged only 1paise/sec. Wow!! Isnt it interesting? Ofcourse it is. The proof is clearly visible from the next line.

Tata Docomo, the GSM-based mobile services of Tata Teleservices, on Aug 7 2009 said it has crossed the 5 lakh-subscriber mark in Tamil Nadu within a month of launching its services in the region.

"We are focussing strongly on network superiority, coverage and service offerings... Tata Docomo will soon unveil a portfolio of value-added services that will reinvent mobile telephony in India, with products and services like free voicemail, timed SMS service, free missed call alerts and call-me tunes" - Tata Docomo Strategy

Problem with this NEW model:

The following are the problems which I thought which will give jitters to TSP.

• Cheap mobile cost and cheap pricing strategy. Will it reduce overall ARPU?
• Is the pricing model beneficial for the TSP?
• Complicated billing engine?
• Real time pulse calculation and phone usage?
• What is in it for the TSP?
• What is the Return On Investment (ROI)?

The answer to these questions are bit complicated and not much clear. As per the recent press release, the company said that they are in loss currently. And the balance sheet is supposed to be in red for this financial year. The company might come out of this losses by the end of 2010.

But the main benefit was due to the joint venture. TATA teleservices has lot of infrastructure which is not a problem for them. Same goes with NTT Docomo. They have designed the most complicated billing engine. So it wont be a problem for them too.

It will reduce the ARPU in the initial stage as people will talk less and they are likely to get more benefit. But as the time pass, people will be increase in the call usage.

Ntt-Docomo uses iMode technology and possess state of art technology especially in the billing side. They will make most of the use for it and get more profit.

So try to give thought about this technology and business model. If you have any comments do contact me.

Copyright © Hardik Upadhyay

You can follow me on TWITTER

JSK

Mobile Market in India - Latest March 2009

Hi Friends,
Today I am going to give some data about the current mobile market subscriber base in the Indian Market. I have read from the few sources like financial express and economic times and came up with the following data. It may be helpful to many people who are dealing with the mobile industry.

Telecommunication Scenario in India:

As everyone knows, if they are not knowing, i will tell you one fact. There is a regulation in Indian market that any company cannot come to India unless they have a tie up with the Indian company.
So many of the foreign companies are coming to India by tying up with the existing mobile companies in India. Latest news is about Japanese company DoCoMo tying up with TATA communications and launching the service named TATA DOCOMO. It is supposed to be a hit which is estimated by many market researchers.

Also there are few ways where they can expand their business with their new technology and other features. Let's see what happens in the near future.
Below are the current features in the mobile market of India.

Overall ARPU GSM services in India:

March Quarter: INR 205 (down 6.82 %)

December Quarter: INR 220

Postpaid ARPU : ARPU for postpaid service fell 2.8 percent to INR 543
from INR 559,

Prepaid ARPU: Declined 6 percent to INR 181 from INR 192.

For CDMA services:
The blended ARPU per month went down to INR 99 from INR 111.

The postpaid ARPU for CDMA services was five times that of prepaid
ARPU, which Trai attributed to the declining importance of processing
fees on recharge vouchers purchased by prepaid subscribers.

Mobile Internet access: 117.82 million over their phones in March

Subscriber Base:

­India's total subscriber base of wireline and wireless services
reaches 429.72 million for quarter ending March 2009 as against 384.79
million for quarter ending December 2008, thus registering an increase
of 11.68% during the quarter

Total Mobile subscriber base - Wireless Subscriber Base: The
subscriber base for wireless services has increased from 346.89
million for quarter ending December 2008 to 391.76 million for quarter
ending March 2009 increased by 44.7 million in the quarter.

GSM subscribe Base:
The GSM-based subscriber base now stands at 315.7 million, an increase
of 2.9 percent over the 306.8 million in the previous month.

Airtel: Bharti Airtel retained its top position with 2.8 million new
subscribers added in June, making it the first operator to cross the
100-million subscriber base mark

Rural Wireless Subscriber Base:
Increased from 93.15 million for quarter ending December 2008 to
109.71 million for quarter ending March 2009, registering a growth of
17.77%.

Total Revenue: Total revenues for the telecom services sector in the
three months to March reached INR 404.45 billion, up 2.63 percent from
the previous quarter.

I hope that the above statistics were helpful to you. Keep reading my blog for further information.

JSK