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

Industry / Sectors - Not Affected by Recession

Recession is one of the most common word which is famous with today's people. Every single person has only one tension in their life. How to fight against the recession?

People think about the measures which has to be taken in order to fight against the growing terror named terrorism. They have to take some steps. But how?? Will it continue for all the time or there will be something, some kind of miracle which will save them from this current conflict of minds?

Also there is one more dilemma which people are facing. Most of the people are scared to change the job thinking that they will not get any kind of benefits from the change. Also they are skeptical that the change of job will be useful to them or not. It may not turn out to be a nightmare if they change from the existing job to a new job and that particular industry faces far more serious issues. So what should be done? I will try to help you finding some answers to your intriguing questions. Hopefully it will help you to find some answers.

The following are the top 6 sectors which I think are least affected by recession:

1. Health Care: I would say that health care is one of the key sectors that have largely remained unaffected because it is a necessity. People will go to the doctor when they are ill. But currently they are facing some serious issues in finding some answers. The US health care is facing lot of issues today. But the solution lie in changing the functional methodology of the whole system. But still there is lot of scope for improvement in the health care sector of any company and I believe that it will come out to be a successful industry in the future.
2. Pharmaceutical: There is a truthful saying "Health Is Wealth". Humans are getting lesser immune now a days. They are getting sick again and again. So due to this, they will go to doctor as they already have insurance. Wouldn't people still go to various doctor's or other pharmacies to get their prescriptions and medicine they're in need of? If your answer is "YES" for this, then I need not to explain anything furthermore. Pharmaceutical industry is growing at a fast pace with lot of drugs still to come. So I firmly believe that they have a shiny future and will survive this recession tide.
3. Education: After the storm of recession, most of the people lost their job. They had their savings but what was the use. They needed to do something. The only option left for them was to go for higher studies. People prefer spending more on education to counter job
   crunch in times of economic meltdown. This results in extra spending which will act like returns for them. Every year lot of students pay a hefty price to get better education. Management and Science are at the centre of the core. So even if the recession is at peak, people will prefer to get higher education and spend money there. So the monetary flow in this industry will keep on going in this tough times.
4. Power Sector:It's a basic infrastructure requirement and there is
   still a long way to go in achieving self sufficiency in this sector. Power sector has been changing its trends in recent times. They have faced lot of issues and also growing demands. There is also the change in source of power generation. So there will always be demand for more energy, hence there will be demand for jobs in this sector. But they have to play a safe game.
5. Telecommunication: Telecom sector has also shown a recession proof
   character as a mobile phone today has evolved into more of a necessity
   , just like food, shelter, clothing, health care, etc. People are spending more and more on mobile and its utilities. They are using various services and people are also ready to give more money for getting better next-gen network for their usage. Today telecom industry is investing more and more on infrastructure. Government initiatives are also backing up the process. They are helping the users to regulate the scenario. There is wide scope for employment and profit from this sector. In fact, this sector is supposed to be a saviour in the times of recession and will help the industry to revive from this current position.
6. FMCG: Daily utility items and will move at the counter irrespective. People don't care about the increasing food price or goods. People will prefer to cut their cost in spending more on electronics goods and other electronic entertainment items but the daily items will be on the top of their list. This things boils down to a simple rule. The industry of FMCG will continue to excel. But the pace may be slow comparatively. The reduction in exports may be a factor for slow growth but it will not be affected much by the attack of recession.

I guess my insight on the current industry scenario was helpful to you all. If you want any kind of help, then do mail me.

You are also free to follow me on twitter.

www.twitter.com/hardikupadhyay

My email id is hardik2447@gmail.com

JSK