Service providers added 18.18 million subscribers in August. With this, the total mobile user-base touched 670.60 million in India. The 18.18 million new connections are not new subscribers, but SIM cards sold in the country. According to reports, around 20-30% of new additions are just sale of SIM cards to existing mobile users. Can the telecom regulator take stock of the situation and urge operators to report actual number of individual / new users on their network. Few operators are ready to report actual subscriber-base. If all operators are ready for actual reporting, it will bring more transparency.
Baburajan K
Executive Editor
Voice&Data
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Telecom operators will delay their BWA launches in the country. Most of the operators, who bagged BWA licences following the spectrum auction, is currently confused about technology selection for rolling out services. They are yet to decide between TD-LTE and WiMax. Both telecom equipment vendors and operators are responsible for this delay. SPs are not guided properly from the beginning. Government's guidelines on roll out obligations will not help if big vendors are promising healthy returns even if there's a delay in launch. The country will not add another 10 million broadband customers in 2011.
Baburajan K
Executive Editor
Voice&Data
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With the Mukesh Ambani-promoted Reliance Industries, the largest pan India BWA licensee, deciding to opt for TD LTE technology to roll out 4G services, WiMax vendors will not have too many options to do good business in India. WiMax vendors have been relying on Tata Communications and Reliance Communications. Both operators did not win spectrum. Airtel was not an aggressive WiMax player. WiMax vendors' main business will be with BSNL and a select operators who have won BWA spectrum.
Baburajan K
Executive Editor
Voice&Data
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Prospective 3G operators are not expecting substantial revenues from majority of rural folks considering the initial bid value for some of the states. On day 9 of the 3G auctions, Himachal Pradesh, Bihar, Orissa, Assam, North East and Jammu & Kashmir attracted bids worth less than Rs 31 crore each. But there may be some interest at a later stage. Besides three metros, 3G bidders are focusing on Maharashtra, Gujarat, Andhra Pradesh, Karnataka, Tamil Nadu (including Chennai), Haryana, Uttar Pradesh E & W, Rajasthan and Madhya Pradesh. The bid price is between Rs 200-600 crore for these states. Kolkata, Kerala, Punjab and West Bengal got bids worth Rs 100-200 crore. Only Delhi attracted bids worth more than Rs 700 crore. India's business hub Mumbai is worth Rs 668 crore for 3G operators.
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UK-based operators may plan a legal challenge to the British government's decision to increase the availability of Internet access on mobile phones. According to media reports, if O2 and Vodafone are considering legal action, it will delay the 4G spectrum auction in the first half of 2011 in the UK. While the US and Japan are in the process of starting 4G services this year, India is lagging behind. The recent 4G/LTE consultation paper from TRAI may help operators plan their investments in India. However, 4G investment will depend on the success of 3G auction slated for April, 2010.
Baburajan K, Executive Editor, VOICE&DATA
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"Compared to wireless voice communication the contribution of Broadband penetration to country’s GDP growth is nearly 3 to 4 times, because every 10% increase in broadband penetration, which enables voice, video and data, leads to 1.2 to 1.4% increase in GDP. Video communication through IPTV will drive broadband penetration to the common man as it is easily intelligible for him and this essentially will bridge the digital divide. According to me, within next three to five years broadband usage should reach a minimum of 100 m subscribers which would pave the way for overcoming the digital divide and is essential for Indian SME businesses to remain competitive, globally. To sustain the GDP growth, the information flow needs to be abundant and for that broadband is a must, which is why Government investment into this sector is essential. Broadband contributes to the growth right from agricultural industry to high end technology business and hence it becomes imperative for additional focus from the Government on this segment. In this budget, we expect the current government to set aside investments for funding or subsidy for promotion of broadband in India and look at BB from the perspective of an essential infrastructure required for the country".
- Vijay Yadav, Managing Director, UTStarcom
“I expect the budget to relook at perquisite taxation on ESOPs (Employee Stock Ownership Plans) since ideally gains on share sales should get taxed only when they are sold. The FM should relook at the MAT (Minimum Alternative Tax) rates since the current rate of 15% is quite steep. To preserve India’s competitive edge globally and for a long-term continuation of its leadership in the global IT market space, the government should not cease tax holiday extensions for units in STP areas by 2011.“
- Amar Chintopanth, Executive Director & Chief Financial Officer, 3i Infotech.
"Last year Chidambaram had announced as part of budgeting fee that a committee would be formed to look into licensing issues - but it has still not been finalised, resulting in a loss to the government. Thus, this year, we are looking at a rationalisation of tax and levies, uniform license fee of one per cent of the AGR. We are also hoping for a re-look at direct tax, tax holidays and section 81 (A), a re-look at licenses and indirect taxes. As far as infrastructure products are concerned, we are hoping for a boost in telecom infrastructure and telecom should also be included as part of infrastructure, so that all tax holidays applicable to infrastructure are applicable to telecom. Also, bank guarantees should not be required for telecom, and instead we should be included under the corporate guarantee scheme instead. Also, there should be a reduction in customs duty and CVD for mobile handsets and accessories. Basically, there should be an overall simplification of the tax regime.
-- Vikram Tiwathia, chief regulator relations, TTSL
"We are hoping for a tax exemption for STPI, and an expansion in the limit for the same. Double taxation incidents wshould also be removed. Further, telecom bandwith re-selling and rate of USO contribution should come down from five per cent to three per cent. Further for consumers, broadband taxation should be removed from the total taxable income, which has an indirect benefit for operators as more bandwith will be used. Further, service tax on interconnect charges should be removed."
Satyen Gupta, chief regulatory advisor, BT Global Services
, "We are looking at a reduction in import duty. Since the government is pro-telecom, they should do all they can to help operators. We are also looking at a gross reduction in spectrum licensing fees."
-A K Dinkar, GM-Operations, MTNL
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Mobile Number Portability (MNP) allows subscribers to change their service provider to one having the best service quality, lower tariff options and better network coverage while retaining their old telephone number. It can be: a) Location Portability b) Service Portability c) Operator Portability.
India has one of the lowest rates for mobile services but quality of service offered by SPs is poor.
A subscriber is forced to continue with the current operator, even though he/she is extremely dissatisfied.
MNP eliminates pseudo and psychological barriers to churning, thus providing truly competitive market and service quality improvement. According to IDC India, 30% of mobile subscribers are likely to shift to an operator offering better service, if given an option. Internationally 10% churning of numbers with NP is common. Charge of Just Rs 200 can cover costs. Internationally average charges are around $12-14.
If consumer is ready to pay for better service and avail better tariffs, why it is taking so long to implement. Regulator has specified that pre-paid users must give an undertaking of being aware that balances on both talktime and minutes will not be carried over to the new operator they are switching to. Post-paid customers must furnish proof that all outstanding dues to their current operator have been cleared, which is quite acceptable by Indian nationals.
Delay in implementation of MNP will negate the concept of''true market” and operators will go on compromising on service quality standards. Hence don’t we feel that MNP should be given more priority than 3G.
Sarvendra Dubey
Author is General Manager
with iSmart Panache India
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