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