Archive for the ‘telecom’ Category

>Mobile number portability opens war for Post paid users mainly

January 20, 2011

> Profitability of Indian cellular service providers is likely to be squeezed further following mobile number portability (MNP), triggering a short-term spike in subscribers switching service providers, which will force operators to spend more on attracting and retaining customers, say analysts.

Analysts estimate the rate of subscriber churn at 6-8% among pre-paid subscribers, who make up nearly 95% of India’s 700 million mobile phone connections, and 1-3% among post-paid subscribers.

The 5% subscriber base of post-paid subscribers contributes about 20% of revenues for larger telecom players. That’s the prize money various mobile operators are going to fight over — to win the post-paid subscribers.

Some operators such as Tata Teleservices and Reliance Communications (RCom) are at particular risk of losing subscribers as they still operate a CDMA technology-based network, though both the players also operate GSM networks.
The only other CDMA operator in the country is MTS India, a new operator.

In India, GSM is the mainstream technology platform for mobile telephony, with nearly 85% of subscribers being on GSM networks.
At the time of going to the press, DNA was yet to get responses from RCom.

A spokesperson for Tata Tele did not respond to calls and messages.

For the 109 million or so CDMA subscribers in India, the incentive to move to GSM comes from a wider choice of handsets as well as service providers.

Given the smaller CDMA subscriber population, the choice of handsets available here is very limited.

Mobile number portability will “expose it (Reliance Communications) to the risk of losing CDMA subscribers, who so far had limited options,” Rajiv Sharma and Harbhajan Singh, analysts with HSBC Securities and Capital Markets, said in a January 11 note.

Goldman Sachs also believes Tata Tele and RCom are at risk of losing their CDMA subscribers once MNP is implemented nationally.

Along with mass market ad campaigns, some large operators are learnt to have launched targeted strategies to poach high value corporate customers from rivals.

“We expect a near-term increase in S&M (sales and marketing) costs, network expenses, and churn rates. We do not expect a meaningful proportion of corporate subscribers moving from incumbents to new entrants,” Goldman Sachs analysts Sachin Salgaonkar, Piyush Mubayi and Paras Mehta wrote in a January 18 note to clients.

Operators are likely to respond by bringing down post-paid tariffs, which are currently about 25% higher than pre-paid call rates.
According to the Goldman Sachs analysts, such post-paid tariff reduction could put “5%-8% of Bharti’s (Airtel) earnings at risk.”

Besides the revenue loss from lower tariffs, mobile service providers will also be forced to spend more to stay in the race, in a market that is not only among the fastest growing telecom markets in the world, but also the most competitive one, with at least 10 operators slugging it out in every telecom circle.

“We expect MNP to increase the cost structure of all the players as they will need to spend more on improving their quality of service and customer care,” said Amit K Khire of Ambit Capital.

Pan-India operators such as Idea Cellular and Vodafone Essar have already started advertising and marketing campaign to educate potential subscribers about number portability and hopefully woo them over to their own networks.

The boldest move yet has came from Loop Mobile, a regional operator in Mumbai, that went beyond the talk by offering to compensate subscribers for every dropped call.

“We declare that for every Call Drop that subscribers experience, we at Loop Mobile shall compensate them,” the company said in statement on Wednesday.

“For every confirmed call drop, we will reimburse the customer 50 paise,” S Mahadevan, chief operating officer for Loop Mobile told DNA.

Being one of the oldest operators in Mumbai circle – the only circle where Loop Mobile operates – the company’s legacy high end customers is an obvious prey for larger national operators.

Such measures, to both attract customers and retain customers take its toll on profitability according to rating agency ICRA Ltd, especially given that tariff levels are already extremely low.

“Higher customer acquisition and retention costs coupled with declining tariffs is likely to affect the profitability of telecom operators post implementation of MNP,” ICRA said in a client note on Tuesday.

“Under such a scenario, telecom operators with stronger financial profile would be better placed to cope with the increasing competitive intensity.”

>Top telecom companies in india

January 20, 2011

>List of telecom comanies in india

Top teleecom comapnies as per market cap

Bharti Airtel is one of the most valued company of India. It is also the leading telecom provider in India.  Reliance Communications follows Airtel in market capitalization. Interestingly the same order holds good for the total number of subscribers these telecom companies has.

Bharti has a subscriber base of 91.1 million and added 2.7 million subscribers in Feb 2009. Reliance added 3.3 million new subscribers in FEB 2009 to take the airtel total to 69.6 million. Reliance rolled out its GSM operations late last year following which there was a surge in the number of new subscribers. It also added more subscribers than Airtel in a month.
Following MTNL is the list of other telecom providers in infrastructure, equipment and value added services. Vodafone-Essar which has 66 million subscribers is not listed on the Indian Bourses.
BSNL is also not listed and that is the reason why it is not in the list. If listed it could be one of the top companies. There is a lot of things happening around BSNL’s IPO even before the recession started. Now, that the recession has started the IPO plans were postponed. But, BSNL will dilute 10% stake sooner than later.
*Market valuations as on 20 MAR 2009. Source (ETIG)
List of top 30 Telecom companies in India :

Company Name Market Cap in Crores
Bharti Airtel 108066.23
Reliance Communications 32683.44
Idea Cellular 14368.92
Tata Communications 13181.25
Tata Teleservices 4393.06
Spice Communications 4136.13
MTNL 4044.6
GTL 2475.12
GTL Infrastructure 2210.49
OnMobile Global 1403.52
HFCL Infotel 457.73
ITI 413.28
Him.Fut.Comm 386.99
Astra Microwave 241.88
Gemini Communications 125.71
Avaya Global 118.54
Shyam Telecom 64.58
Nelco 63.55
XL Telecom & Energy Limited 55.96
Goldstone Infratech Ltd 52.6
Nu Tek 48.16
Kavveri Telecom 26.51
Krone Communications 24.52
Mobile Telecommunications Ltd 17.37
Valiant Communications 16.58
Pun.Communi. 16.19
Nettlinx 12.68
Aishwarya Telecom Ltd 9.86
Interg.Digit 3.15
Vital Communications 2.81

>Number portability from today

January 20, 2011


Prime Minister Manmohan Singh will formally announce a nationwide roll-out of the much-awaited mobile number portability (MNP) service on Thursday. This facility will allow mobile subscribers to switch operators without changing their phone numbers, thus forcing telecom companies to improve efficiency of their networks, offer competitive tariffs and more value-added services.
“I think it is a great step forward for the consumer, as it enhances choice and brings in more competition, because the more efficient you are as a service provider, the more likely that consumers will choose you,” Communications and Information Technology Minister Kapil Sibal told journalists here on Wednesday.
Due to technical reasons and laxity on the part of telecom operators, the MNP missed at least three deadlines last year. However, it was introduced in Haryana as a test case in November 2010. In the meantime, private operators had already begun a major marketing campaign, creating awareness of the service in order to woo mobile users.
How much churning will happen in the mobile space due to MNP, only time will tell; but it will definitely put pressure on mobile operators to offer better and more value-added services not only to woo customers but also to retain their existing customers. Some operators could further slash their tariffs to attract customers. Mobile operators such as Idea Cellular, Vodafone Essar, Uninor, Reliance Communications, Airtel and Aircel are all geared to introduce the MNP to give a boost to their subscriber base.
“Idea is ready to enable the MNP on its network and has made substantial investment in network, technology and processes to allow mobile subscribers to switch network and move to Idea, post MNP. Idea has also launched an MNP helpline to guide mobile subscribers on various aspects and procedures of number portability. The mobile users across all 22 circles can call up the toll-free number and register their requests for porting on the Idea network,” Idea Cellular said in a statement.
According to CDMA operator Sistema Shyam TeleServices (SSTL) president and Chief Executive Officer Vsevolod Rozanov: “I think tariffs will go down further especially if we speak about the post-paid customer base, where we are likely to see the average revenue per user going down. In the pre-paid segment, I doubt a significant change in their tariffs or profitability.” The SSTL offers services under the brand MTS.

>Verizon iPad On The Way Though no date or price yet specified

January 12, 2011

>AT&T officially lost their exclusive rights to the iPhone earlier today, and it looks like the same fate awaits their exclusive HSDPA-embedded iPad arrangement. According to Bloomberg News, Verizon will soon sell a version of the iPad with an embedded chip allowing the device to connect directly to the Verizon network. Previously, Verizon only sold the iPad with a bundled MiFi hotspot for between $629.99 and $829.99. Speaking to Bloomberg, Verizon CFO Francis Shammo confirmed the device was coming to Verizon, but didn’t specify a price or date. Bloomberg also doesn’t specify whether the device will be CDMA/EVDO only, EVDO/LTE dual mode, or LTE only. Verizon’s upcoming version of the iPhone will be CDMA only, something Apple says is because an LTE version would “force some design compromises that we wouldn’t make.”

>Apple Admits fault with improper signal strength in iPhones

July 6, 2010


Apple Inc came clean on Friday about an embarrassing software glitch that overstates network signal strength in its hot-selling iPhone, as complaints mounted about the phone’s wraparound antenna. Apple admitted its signal strength miscalculation dates back to its original 2007 iPhone. It promised to fix the glitch in a few weeks, but did not directly address concerns that its antenna design causes reception problems for iPhone 4, its newest phone.

Apple’s apology—a relative rarity from the company known for its marketing savvy—marked the third time in less than three weeks it had to apologize to customers of iPhone 4.

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