Latest Telecom News (24th to 27th July)

1.    Telecom services segment grew 15% in 2010-11.

·         The Indian Telecom services grew by almost 15% to post revenues of Rs 1, 66,168 Crores, up from the previous fiscal’s Rs 1, 44,600 Crores.

·         The services include cellular, fixed line, broadband and VSAT.

·         The mobile services market, the largest among all the communication services offered in the country, saw revenues grow by 16.6% to cross the one lakh crore mark.

·         As a whole the total revenue of the Indian telecom sector grew by 7 per cent to Rs. 2, 83,207 Crores for 2010-11 financial year.

·         But the revenue from telecom equipment segment declined by 2.52% due amendment in security norms.

2.    Telecom stock bullish following tariff hike.

·         Telecom stocks rose by 0.8% (148.99 points) on 25^th July.

·         It was mainly due to the hike in tariffs by Bharti Airtel last week. Airtel’s stock increased by Rs 22.05 or 5.37%

·         Reliance Communications stocks rose by 14.9%.

·         Recently, Bharti and Vodafone announced a 20 per cent hike in tariffs for on-net calls (on-net traffic accounts for 25 to 30 per cent of the total traffic).

·         Aircel, Idea also followed suit.

3.    2G scam: Behura drags in RBI Governor

·         Former Telecom Secretary, Mr. Siddhartha Behura has dragged in the RBI governor, D.Subbarao in 2G scam.

·         He has blamed Subbarao for not revising the 2G spectrum price in 2007 as the then Finance Secretary.

·         However, as reported by Business Line earlier, Dr Subbarao, the then Finance Secretary in a letter dated November 22, 2007, had in fact asked the Department of Telecom to justify how it was taking an entry fee of only Rs 1,650 Crore from operators in 2007 as this amount was fixed in 2001.

·         Behura also added that a meeting was convened by Subbarao on Dec 4, 2007 and mentioned that the fee were finalized. He insists that he joined as the Telecom Secretary in Jan 2008 and hence he should have been a witness instead of being behind bars as the decisions were taken before he took charge.

·         But the Govt has defended Subbarao and in fact hit back at Behura saying that it was really strange and unbecoming of a top official to make references to a meeting which he had no personal knowledge and no supporting documents to claim the same.

4.    Bharti Airtel launches 3G services in Kerala. Key cities included are Kochi, thiruvananthapuram and Kozhikode.

5.    BSNL: Spectrum costs and delay in execution of plans pulls down revenue.

·         State run telco BSNL is likely to announce a substantial revenue loss in 2010-11.

·         It is because of high spectrum costs and a long delay in execution of projects.

·         3G spectrum and BWA was given to BSNL and MTNL before the auctions took place and kept out of auction process.

·         The spectrum to both public sector companies was given under condition that the two will have to match the best price paid by the highest bidder in the respective telecom circles.

·         BSNL paid Rs 10,186.58 Crore for 3G spectrum and Rs 8,313.8 Crore for wireless broadband spectrum.

·         Deadlines for Various tenders like managed lease line network, Mpls Based Next Generation Transport (MNGT), mobile network expansion couldn’t be met.

6.    British Telecom set to exit Chennai Company ACCEL.

British Telecom (BT) is set to exit the 330 Crore Chennai based IT company Accel Frontline, listed on the BSE, in which BT has 51% stake.

BT acquired 51% stake in May 2007.

Back in 2007, the acquiring of stake by BT was hailed as the greatest moment in Accel’s history and believed that it could ride the BT wave to gain substantial business.

But that did not happen and this is seen as the reason as to why BT had decided to part ways.

7.    Tata Sky mobile access launched.

·         DTH service provider, Tata Sky, in association with Ryz Media Inc, has introduced Tata Sky mobile access, for Apple devices.

·         This application would allow/enable iPhones, iPads and iPods to remote control consumer electronic devices at home.

·         In addition subscribers can read upcoming programme information, read about movies and search for programmes based on title.

·         This application will also enable users to record their favorite programmes when on the move, which will coerce the users to use this feature of Tata Sky.

·         To use this application, an accessory needs to be plugged into the audio jack of the Apple devices.

·         Separate applications for Android devices will also be launched soon.

8.    Vodafone Essar’s mobile newspaper.

·         Vodafone Essar has announced its launch of mobile newspaper for its customers across TamilNadu.

·         The news will available in the form of a MMS and covers many genres of news.

·         It is available at Re 1 per day, Rs 5 per week and Rs 20 per month.

9.    Telecom the next big call for Loyalty Service providers - Accentiv.

·         Accentiv, an end-to-end loyalty solutions provider, has said the growth in organised retail and airlines is fuelling the growth of loyalty service providers in India.

·         The company is looking to invest in Analytics – an area which provides data on customer buying behavior and also track return on investments for corporate.

·         DTH and telco, Airlines and Retail Industries are fuelling growth in India and therefore Accentiv is looking forward to provide loyalty programmes to as part of the organizations customer retention programme.

·         It estimates that the loyalty market in India is anywhere between Rs 5000 – Rs 8000 Crores.

·         Given the hyper competitive environment in the Indian Telecom sector and very high customer churn in this sector, it is a good commercial venture for Accentiv.

Latest Telecom News (19th -23rd July)

       1)    DOT may soon allow unlimited calls via Internet.

·    DOT is considering opening up the Internet Telephony and allow unrestricted calls using internet connection.

·     DOT was contemplating to do the same in 2008 for ISPs without any additional licence fell but was rejected on the grounds that it would not be a level playing field for those who have paid money as entry fee.

·    DOT is planning to include this scheme in the new telecom policy to be launched in November 2011.

·     This scheme would enable Internet companies to offer voice services along with data services and thus would kick start another pricing war among the operators.

·     Reliance Infotel would benefit the most as it has only a broadband wireless spectrum.

·     Currently Net Telephony is allowed only for PC-PC or international calls and operators with UASL are allowed to offer domestic calls but not implemented by any.

         2)    Bharti Airtel to concentrate more on its core activities in Africa.

•   Bharti Airtel has decided to concentrate only on its core competencies, which can be ascertained by the recent developments.

·    Service Management – management of networks across given to Ericsson (5 year deal).

·     IT solutions provider for its African operations – IBM (10 year deal).

·     $400-million order to a Chinese telecom vendor Huawei for modernizing and expanding its 2G and 3G network infrastructure in African countries.

           3)    Mobile Payment volume to touch $86 Billion in 2011 – Gartner.

·     The volume to increase from $48.9 billion in 2010.

·     Mobile payment users also to surpass 141.1 million in 2011 as against to 102.1 million in 2010.

·     The above phenomenon is favorable in developing economies due to high mobile penetration and low banking services.

           4)   Wrist Mobile Phone unveiled.

 ·                             Wireless Gadgets Manufacturers India Pvt Ltd has launched a wrist mobile phone TB007.

·     Priced at Rs 8499, it has Bluetooth, USB port, supports upto 4GB external card.

·     Last the company introduced projector phones.

      5.   3.5 % quarterly revenue growth  at Vodafone.

     Vodafone, UK’s telecom giant has posted a quarterly growth rate of 3.5% in the April - June quarter based upon a good show in emerging markets like India. Its revenue grew to a 11.7 billion pound with a free cash flow of 1.2 billion pound. It was basically driven by strong service revenue growth in India (16.8%), Turkey (32.1%) and South Africa ( 7.8%).Vodafone performed good in emerging market like India where its revenue growth was 9% to 1.03 billion pound which was mainly due to rise in its customer base. But its southern Europe (including Spain and Italy) business remained challenging due to price reduction. Currently on 1^st July 2011 Essar Communications (Mauritius) Limited (ECML) and Essar Communication Holding limited (ECHL) agreed a term under which they will sell their direct and indirect shares holding in Vodafone Essar Limited (VEL) to Vodafone UK.

6.    Panchayats across the Country to get Broadband service in next 3 years.

            Telecom Commission on 22/07/11 cleared a project with a vision to connect all Panchayats of the country with a optical fibre network in next 3 years for providing broadband services . Project values upto 20,000 crore Rs. Project is waiting for an approval of Union Cabinet. This National Optical Fibre Network (NOFN) project will be financed by Universal Services Obligation Fund (USOF). All mobile phone companies contribute 5 % of their annual revenue toward USOF for supporting rural telephony. With this USOF has a total capital of 15,000 with 6000 Rs being added every year.According to a world bank stat a 10% increase in broadband penetration leads to increases in GDP growth by 1.4%.Indian telecom regulator has set a target of 75 million broadband connections in next two years and 160 million by 2014.

         7.   Apple displaces Nokia as Smartphone leaders

•                      Apple has overtaken Stephen Elop’s led Nokia in the Smartphone race to become new leaders in this phone category.

·     Nokia sale volume remained at 16.7 million units whereas Apple Inc sold about 20 million units of I phones in the April- June quarter.

·     Nokia’s revenue fell by 7% from 10 billion last year to 9.3% billion posting a loss of 523 million $(  2^nd quarter,2011) against 227 million $ in 2^nd quarter of 2010.

·     Nokia mobile phone market also feel as its sale fell down to 88.5 devices in 2^nd quarter as against 111 million in same quarter last year and 108.5 million the last quarter.

·     Nokia working on cost cut through cut in staff, outsourced professional,

Facility cost and improvement in efficiency. It also need to come up with innovative products to remain in the battle.

          8.   DOT under pressure to release spectrum.

·    DOT has recently revealed that it has 211 MHZ of 2G spectrum for GSm operator and 75 units for CDMA. This admittance has surmounted DOT with pressure of releasing this spectrum to the operators who are in great need of it.

·     DOT had earlier announced that after the auctioning of 2G frequencies in 2008 it had exhausted spectrums in some regions.

·     Lack of spectrum has adversely affected service quality of operators, rolls out plans, and pushed up costs for some.

·    Finance ministry to gather around 25,000 crore Rs from auctioning these spectrums.

        9. Airtel hikes prepaid tariff by 20%.

·     Airtel taking a bold step forward raised their prepaid tariff rates in 5 leading circles.

·    The changes will be implemented on calls and SMS rates within the Airtel network even as tariffs remain unchanged for calls and text messages sent from Airtel to other operators. Subscribers of the Advantage pack will now pay 60 paise instead of 50 paise per minute for local and STD calls and 90 paise for calls to landlines.

·     It is taken as a move which will set the trend and end the low margin and low profitability which is hurting the entire telecom industry.

·     Five circles namely New Delhi, Andhra Pradesh, Kerala, Gujarat and Madhya Pradesh will witness rise in tariff of Airtel prepaid connections.

·     Hikes are considered to cause major implications on pricing as prepaid constitutes of 95% of the total subscriber base.

·     Tata Docomo had earlier announced that subscriber joining their network after 16 June 2011 will have to pay more for using STD services after one year of activation and also increased the SMS rates.

·     It is also speculated that Airtel has restricted this hike in 5 circles to watch consumer sentiments and if the churn is not too much then they can roll out this hike for the entire Pan India network.

·    Airtel currently reported fifth straight drop in their quarterly profit majorly due to low margin in African operations and increasing interest cost in acquisition of 3G licence.

       10.  Apple surpasses lenevo in Chinese market.

·     Apple may dismantle lenevo (biggest Chinese computer maker) in Chinese and surrounding market in terms of renenue.

·     Lenevo revenue may lag behind Apple’s $3.8 billion in China, Hongkong and Taiwan.

·     Lenevo’s revenue in china was $3 billion and its Hongkong and Taiwan revenue will not take the total past $ 3.8 billion mark.

·     Lenevo had acquired IBM’s personal computer business in year 2005 whereas Apple had introduced I phones in Chinese market in 2009

International Telecom News

 

           1)  Pacific Fibre picks vendor for subsea cable

          New Zealand's Pacific Fibre has signed a deal with US-based TE SubCom to build its planned $400 million international cable. TE Connectivity subsidiary TE SubCom has been contracted to design, construct and lay the 12,750km subsea cable linking New Zealand with Australia and the US.  the deal could be worth as much as $320 million

 

    2)  Sony Ericsson swings to $70.6m loss

           Sony Ericsson swung to a quarterly loss – its first since 2009 – blaming component shortages and a faster than expected collapse of the low-to-mid end phone market.The company reported a €50 million ($70.6 million) net loss for the second quarter, with sales slumping 32% year-on-year to €1.19 billion. Total shipments shrank slightly less than sales – by 31% to 7.6 million - but ASP also dipped 3% to €156.

 

2) Telecom, IT lift Singapore jobs market

Recruitment consultancy Robert Walters expects the IT and telecommunications sectors to continue to show strong hiring numbers in the second half of 2011. The company also recently revealed that more than 82% of people working across Singapore received a salary increase this year, according to a recent global survey of more than 3,200 professionals. According to the survey, 40% of respondents received a pay rise of between one and five percent, 20% received between six and ten percent, 14% received between 11 and 20 percent and 8% received more than 21%.

 

 

    4)   SK Telecom launches T Smart Learning

           SK Telecom has soft-launched its T Smart Learning mobile education offering, unveiling more details - including pricing and initially supported devices - of the platform. The company revealed it is taking registrations for the platform, which has been designed to work on tablet PCs, and will at first be made available on the Samsung Galaxy Tab. The service will reach stores from next month, and SK Telecom aims to extend it overseas from next year. The company is targeting 50,000 users within six months of launch.

 

 

           5)  Cisco cuts 6,500 jobs in streamlining

           Cisco will slash around 6,500 jobs and sell a manufacturing plant to Foxconn as part of a plan to achieve cost savings of around $1 billion.The vendor said it will cut around 9% of its total full-time staff - including 15% of its executive-level employees - in a round of layoffs first flagged in May. The layoffs are expected to cost the company around $1.3 billion in severance and other packages, which will be expensed over Q4 and fiscal 2012.

 

        6) News in Nutshell

 

                         a) Telefonica job cuts to cost $3.8b

Telefonica's plan to lay off 20% of its Spanish workforce – or around 6,500 employees – will cost it an estimated €2.7 billion ($3.82 billion).

b) SLT draws criticism with ZTE LTE deal

Sri Lanka Telecom and subsidiary Mobitel have contracted ZTE to deploy an LTE network, but because the vendor was not the lowest bidder in the Mobitel auction, the tender has been criticized by trade unions.  

c) MTN to trial LTE, flags rollout by 2014

South Africa's MTN will trial a 100-site LTE network, in co-operation with Huawei and Ericsson, with an eye toward a commercial roll-out in two to three years.

 

      d) Oracle seeks deposition of Google CEO

Google said a request for the deposition of CEO Larry Page in the lawsuit over Android's alleged infringement of Oracle patents represents a “harassing demand,” and will fight the motion.

 

      e) MS buys microsoft-sony.com

Microsoft's purchase of domain names microsoft-sony.com and sony-microsoft.com has ignited speculation, with theories ranging from Sony Ericsson planning to launch a WP7 phone, to far more unlikely scenarios like Sony and Microsoft teaming up in the game consoles sector.

      f) Etisalat Q2 profit shrinks 15%

The UAE's Etisalat reported a 14.9% slump in second-quarter net profit to 1.59 billion dirhams ($432.9 million), due to growing operating costs and a charge for anticipated overseas tax liabilities.

     g) France Tel in talks with ZTE over Congo buy

France Telecom is in talks to acquire a controlling stake in Congo China Telecom from ZTE. A source said the operator may later buy out the remaining 49% from the Congolese government, and that both transactions could cost a combined €300 million ($422.5 million).

 

      h) Philippine ISPs ordered to disclose minimum speeds

Philippine broadband providers have been ordered to specify minimum connection speeds and service availability in advertising about their offerings, with the lowest allowed reliability being 80%.

 

i) Morocco to sell 7% stake in Maroc Telecom

The Moroccan government is looking to sell an up to 7% stake in Maroc Telecom, and will open bids in September. Such a sale would be worth around $1.1 billion at current market prices, and would cut the government's holding to 23%.

 

      j)Telecom NZ cuts fiber prices to compete with UFB

Telecom NZ will slash prices for its fiber broadband offerings in Christchurch and some other cities where the company was not contracted to roll out the nation's Ultrafast Fibre network.

Highlight of Indian Telecom Subscription data as on 31st May 2011

Particulars	Wireless	Wireline	Total Wireless + Wireline
Total Subscribers	840.28	34.40	874.68
Total Net Addition	13.35	-0.15	13.20
% of Monthly Growth	1.61	-0.44	1.53%
Urban Subscribers	554.75	25.87	580.62
Urban Subscribers Net Addition	7.33	-0.07	7.25
% of Monthly Growth	1.34%	-0.30%	1.27%
Rural Subscribers	285.53	8.53	294.07
Rural Subscribers Net Addition	6.02	-0.07	5.97
% of Monthly Growth	2.15	-6.86	2.06%
Teledensity	70.23	2.88	73.11
Urban Teledensity	154.18	7.19	161.37
Rural Teledensity	34.13	1.02	35.15
Share of Urban Subscriber	66.02%	75.19%	66.38
Share of Rural Subscriber	33.98%	24.81%	33.62

- Mobile Number Portability requests increase from 85.41 lakh
subscribers at the end of April 2011 to 105.70 lakh subscribers at
the end of May 2011.
 
- Active wireless subscribers on the date of peak VLR in May- 2011
are 588.13 Million.
 
- Broadband subscription reaches 12.12 Million in May-2011 from
12.01 Million in April-2011.

Source - www.trai.gov.in