Reliance Communications – Integrated Telecom Company with Global Ambitions
I just got off the Reliance Communications conference call and would like to share some of the key points from the same. They have announced real good results for FY2008, though with a caveat on Debt and others [See the balance sheet, I hardly know accounts]
Mr. Anil Ambani said,
- They added over 18 mn customers taking the total to over 46 mn
- RCom is now amongst the top 5 Telcos in Asia
- World’s largest network by year end [CDMA + GSM]
- Awarded contracts for equipment and network rollout in the GSM segment.
- Reliance Mobile [GSM vertical] has secured startup spectrum of 4.4 MHz in 1800 MHz band across India.
- GSM operations apart from the existing 6 circles will begin by the end of this year in Phased Manner [Completeness of Coverage in a Circle]
- Has got spectrum in Sri Lanka and Uganada for wireless services.
- Acquistion of eWave World WiMax operator for Global Enterprise services. $500 mn CAPEX planned for this segment
- BigTV – Reliance Communications DTH Platform has commenced trial runs with employees and other channel partners. Only High Definition DTH provider in India.
- Reliance Globalcom to be amongst top 5 Enterprise service providers in the world
- Total CAPEX of $11 bn between previous year and current year
RCom doesn’t hope to kill the CDMA services and will let the market / customers decide on what platform they want to be on. However, pricing and schemes by the company will be an influencing factor. A number of companies have already approached Reliance for MVNO deal, and the company is said to be waiting for MVNO guidelines to be finalized rather then rushing into Tata-Virgin, Franchisee Deal.
On Reliance Infratel [Tower company], Mr. Ambani hinted that with the recent regulatory changes one can accommodate Active Infrastructure as well. Valuation has certainly gone up and the company is weighing on options to include GSM and 3G + WiMax when auctioned under the same. RCom will hold 85% after the listing.
Mr. Ambani made it clear that the company is looking at Higher EBITDA market share rather than customer market share or revenue market share. His underlying tone to Analysts was to look at RCom’s high EBITDA busiensses such as Reliance Globalcom / Yipes Enterprise services. IDC business where it is already the number one in India and will add 1 mn sft this year. He even stressed that DTH will be a High EBITDA business for RCom.
The management carefully avoided to be compared directly to peers in the wireless business. MOU is down again this quarter for RCom while the same is up for Bharti Airtel and Idea Cellular. Mr. Shukla, President Wireless Business did admit about some re-balancing being done. RCom has a different strategy, when incumbent operators begin operations. However the tone that I infer is – don’t give up on EBITDA and design products that will preserve the same.
I think I agree, it is always better to look at bottomline than customer market share / MOU etc. For instance, RCom has schemes in which you can talk for unlimited minutes on Reliance network. I have interest in RCom stock by various means.
Bharti to bid for MTN South Africa ?
It is reliably learnt from various analysts that India’s leading mobile service provider, Bharti Airtel is likely to bid for MTN South Africa. Bharti’s management recently stated that Bharti’s business model could be replicated in other emerging markets and it may opt to go for oversees acquisitions.
Bharti Airtel’s model of business is particularly suited to low income, high density population countries and may also fit some of the markets in which MTN operates e.g. Nigeria. MTN reported 68.2m subscribers across the 21 countries in which it operates. The three key markets by subscriber numbers include Nigeria with 17.8m subscribers, South Africa with 15.2m and Iran with 9m subscribers.
However, the enterprise value of MTN is approximately the same as that of Bharti Airtel at $41 bn and if it involves a cash component, it may not be a feasible idea considering the 3G auction in which Bharti Airtel has to bid desperately in India. However, keep your fingers crossed as SingTel, Govt of Singapore, etc may come in handy as trump cards 
How Indian Social Networks are Monetizing on User Generated Content
Being a Google’s AdSense publisher for over a year and closely tracking this network, I am of the opinion that good quality user generated content [UGC] generates high revenue. Social Network have atleast 35% quality UGC inventory and hence can cash-in on this. Hence, we conducted an agile study on how social networks in India or networks targeted at Indians are monetizing user generated content.
- ApnaCircle – own Ad Network
- BharatStudent – Axill Ad network. Axill and BharatStudent are owned by Northgate Technologies.
- BigAdda – Using part of Reliance Entertainment’s Zapak Ad network and Google’s Adsense
- Campus18 – from TV18 group. No Ads yet but other group websites such as Moneycontrol.com is a premium AdSense publisher.
- DesiMartini – Zedo. HindustanTimes is also powered by Zedo
- Facebook – Microsoft + NDTV
- Friendster – Indian Affiliates + Google’s Adsense
- Fropper – Google’s AdSense
- goYaar – N/A
- HumSubka.com – Using AdsforIndians network which pulls classifieds ads at times from some classifieds site.
- ibibo – RealMedia network
- IndyaRocks – Google’s Adsense
- Jhoom – doomed social network
- MingleBox – none
- Myspace India – Google’s Adsense
- Orkut – Google’s Adsense
- saffronconnect – got disconnected
- Sunsilkgangofgirls – none. In the past, has ran campaign about Hindustan Unilever products.
- Yaari – Google’s AdSense
- Yo4Ya – none
7 of the 20 networks depend on Google’s AdSense for monetization and is an acceptable number though we would really like to see more networks sign-up with Google. [Mere number of networks may not make sense, but number of pages, time spent, and other attributes should tell a better story. Since none of the networks disclose these stats, its impossible to know the real facts] Apart from Google’s Adsense, no two social networks in India have the same Advertising platform. Can any Indian company really accept Google’s challenge ?
Bangalore politicians opt for online campaigning
The Silicon Valley of South Asia, Bangalore is under hectic political activity to elect a new government. If you have read newspapers that politicians are going for a door to door campaign through mid-night [24/7 working class], one of the candidates chose to target viewers of the IPL Twenty-20 cricket match by booking ads on Rediff. [Here is the screen shot]
However, there is hardly any information about Mr. K. Gopaliah on the landing page. I did few searches on Google / blog search [Google] on the election coverage and none of the candidates nor their supporters seem to know about Google search marketing and AdSense. At half past mid-night, i can only chuckle on how much more moolah is at Google’s door step while its stock created history on NASDAQ today by rising 20%
GSM operators marketshare at the end of March-08
GSM mobile operations constitute ~67% of India’s wireless market. Bharti Airtel continued to rock in the GSM space at the cost of BSNL increasing its market share to 32% [30.63% in 2007] at the end of March 2008. 
Vodafone India has thrown BSNL to the third spot [See March - 2007 rankings here] by having a market share of 23%. BSNL has to be content with 19%. Idea Cellular has maintained at 12%.
In a separate development, Bharti Airtel’s Chariman, Mr. Sunil Mittal has been inducted on the board of ITU.
Airtel + BSNL DataOne broadband begin the tariff war
A year after then IT Minister, Mr. Maran declared 2007 as the year of broadband, BSNL DataOne and Bharti Airtel have quietly launched a tariff war and are ready to serve customers’ higher bandwidth needs.
It was BSNL DataOne which announced the launch of 512Kbps unlimited data transfer plan at a discount to Airtel’s Home 1499 plan [512 Kbps]. Bharti Airtel under ARPU pressure in the mobile segment badly wants to maintain the revenue by upgrading its customers and hence launched the 1 Mpbs Unlimited plan. [ Airtel offers 8 Mbps broadband in select cites and areas, however no unlimited data transfer plan exists] For anybody who is planning to go Broadband, the entry cost is now just Rs 750 / month.
For the time being, Tata Indicom and Reliance WiMax broadband have been a failure on all fronts – Connectivity to Customer Care. E-mails sent to look into the issues to Tata Communications evoked no response, while Reliance ADAG’s office in a follow-up call assured they will look into the issue but so far no action seems to be taken. Hopefully BSNL and Airtel will continue to woo customers with higher bandwidth and lower tariffs
Feed
Display Ad
