More for Customers
Vodafone's innovative market strategies have paid off well. Unlike its competitors, the telecom major never made regular tariff cuts a business strategy. But this year Vodafone undertook many tariff revisions.

During the last fiscal, TTML improved customer segmentation and loyalty programs, and introduced youth offerings through Virgin Mobile. TTML has given close attention to churn control. Customer addition was done with new devices and exchange offers.

Vodafone was instrumental in kicking off some of the recent changes in tariffs across the country. In January, 2008 Vodafone announced local calls at Re 1 per minute. It launched bonus recharge through SMS for customers in Tamil Nadu, becoming the first service provider to launch this service in the state. In many parts of Kerala, it launched self-service kiosks to improve customer reach. The company also launched the unique prepaid Sambhav Card at Rs 151 for customers with hearing and speech disability on the occasion of World Disability Day. The special card enables them to use the phone purely for SMSes.

Slashing security deposit for international roaming from Rs 10,000 to Rs 1,500, and reducing basic international roaming monthly rental charges to Rs 99 have been Vodafone's other significant offerings. Also, it extended the BlackBerry Connect software to a number of handsets including Nokia, Sony Ericsson, and Dopod.

MTNL started offering its customers local call rates for STD calls between Delhi and Mumbai from June, 2006. It had also introduced One India Roaming Freedom Plan under its post-paid cellular service in June, 2007, in which all calls are at Re 1 per minute. Offering next generation services was MTNL's other focus area. MTNL and Aksh Optifiber together launched IPTV service AkshTel and videophone calling service Vspyk, in Mumbai.

Idea Cellular launched MyGang, a pre-paid card targeted toward the youth. MyGang is a power-packed product encompassing unique services like the closed user group on pre-paid and the Youth Mobile Radio. MyGang offers local group calls within MyGang subscriber groups at the rate of 10 paise per minute and group SMSes at the rate of one paisa without the hassle of mobile number registration or restriction on the group size.

The other services by Idea Cellular include facilities to copy a dial tone of any other Idea user in India, receive and send voice messages, listen to music, send color SMS, watch live television, and search on Yahoo!.

Tata Teleservices introduced mobile Internet radio, live streaming of world radio-casts in English, Hindi, Telugu, Tamil, and other international languages with Mp3 sound. It offers a bouquet of 41 international and local radio stations for customers to discover a different radio service on their phones. Tata Teleservices and SNDT Women's University, Asia's largest university, have entered into an alliance to provide distance-learning education on mobile phones. The mobile education service will enable delivery of e-learning program to people even in remote locations.

HFCL Infotel's Ping mobile services offer call charges of one paisa per second with the benefit of single second billing. This effectively means that the user would pay only for the time of usage in seconds, instead of minute-based charging wherein the user ends up paying even for the duration not used.

BSNL's new offerings come through value added services for both pre-paid and post-paid GPRS subscribers called Mobile Newspaper (mPaper) on BSNL's WAP portal Cellone Safari. BSNL decided to launch a special prepaid SIM for foreign tourists visiting India with instant activation facility over the counter at places convenient to foreign tourists.

Reliance Communications announced its tie-up with Sadhna TV to beam all programs online on Reliance mobile handsets. Reliance Mobile World offers unique experience of viewing Sadhna TV's popular social-religious discourse and other interesting programs in its Mobile TV portfolio.

Bharti Airtel introduced Airtel Messenger, an innovative service that offers the power of text chatting within a personalized set of communities. This feature-rich service gave Airtel mobile customers the same experience as a desktop chat service.

It also launched a GPS-based navigation application on mobile handsets, in collaboration with Wayfinder Systems AB of Sweden. The application turns compatible mobile phones into a complete GPS-based navigation system with detailed maps and points-of-interest of a number of cities in India. The navigation system uses the wireless network via EDGE/GPRS.

The Road Ahead
TTML is planning to invest Rs 850 crore without GSM outlay. The company is also planning to increase wireless coverage from 60% to 95% of all census towns, and 75% population. The priority will be upgrading the Mumbai fiber network, which supports over 2.5 lakh blue chip corporate and SME customers. It is looking at selective enhancement of fiber network in major parts of Maharashtra.

During the quarter ended March, 2008, Spice Communications, which has cellular operations in Karnataka and Punjab, signed license agreements with the Department of Telecommunications for commencing GSM operations in four additional circles such as Delhi, Haryana, Maharashtra, and Andhra Pradesh.

Reliance has embarked on rolling out the world's largest network expansion program. This will enhance network coverage to over a billion people-nearly the entire population of India. The network will have the widest and deepest, covering 23,000 towns, over 500,000 villages, as well as all railway tracks, national and state highways.

Expansion plans of Reliance Communications are supported by capex of over $11 bn or Rs 45,000 crore over the current year and the previous year. This amounts to the largest capital expenditure in the telecommunications history of this country. It is almost equal to the aggregate capex committed by all other Indian telecom companies put together. Reliance Communications is the only operator that has received spectrum for start-up purposes on a nationwide basis, both for CDMA and GSM.

On February 28, 2008, Idea Cellular was granted licenses in Assam, Jammu & Kashmir, Kolkata, Karnataka, the North East, Punjab, Tamil Nadu (including Chennai), and West Bengal for which the company had deposited a requisite license fee of Rs 684.59 crore. The company was allotted the 4.4 MHz spectrum in Mumbai and Tamil Nadu (including Chennai). For the current fiscal, Idea Cellular is likely to spend $1.4 bn toward capex.

Regulatory Support
Despite special initiatives taken by mobile operators in India, the cellular penetration levels are still low in the country. Affordability in India has been a key issue, though several companies have tried to bring down the price barrier. Despite lowering tariffs, a number of companies could maintain their margins and profitability.

Certain regulatory issues were also resolved during the fiscal including the abolition of the ADC regime, which has been welcomed by operators. The much-awaited guidelines for active infrastructure sharing were also announced by the DoT. The industry believes this is a step toward lowering costs, and more importantly, delivering affordable services in the country. Recently, DoT issued guidelines on intra-service area merger, whereby a clause for prohibiting merger for three years from the date of grant of license was laid out.

A majority of net adds are now coming from towns and villages with population of less than 20,000 and that makes it a sustainable growth story

The industry saw new initiatives on the bio-diesel front as well. Southern Biotechnologies has tied up with Idea Cellular to offer bio-diesel for operating Idea's gen-sets at all towers in Andhra Pradesh. The bio-diesel will be blended in a ratio of 2:8 with ordinary petro-refinery diesel to yield a 20% bio-diesel blend. Usage of this 20% blended bio-diesel can reduce pollution emissions by up to 40%, making Idea Cellular the first telecom operator in the country to adopt this environment friendly fuel.

Baburajan K
baburajank@cybermedia.co.in