Merrill not convinced about Datacom + new wireless entrants
Datacom promoted by Videocon group expects to start pan-India operations by end- FY09 with a network of ~35-40K towers [This is a Sunny Day Scenario with Indian Economy in reverse gear and rising Interest rates, you know what will happen]. The Company has floated its RFP for active infrastructure & said it is fully funded for electronics. Staff strength is expected to scale up from ~100 currently, to ~800 by end-CY08. Datacom’s RFP for towers/passive-infrastructure is likely in July. Datacom is keen on tower-sharing but will likely follow an equity-linked sharing model i.e. ~80% ofits towers may be rented from a Company where Datacom will have equity participation.
Merrill Lynch is not convinced about Datacom’s GSM based wireless services. After having met Ravi Sharma, CEO of Datacom, Merill report said,
We returned feeling bullish about the competitive position of current market leaders like Bharti & RCom, despite ST industry risks from potential hike in spectrum charges & possible cut in termination rates. Datacom’s current stance on tower sharing suggests that existing tower Cos may find it challenging to capture value.
Other new entrants are Unitech with 22 licenses and spectrum in 5 circles. Loop Telecom [Promoted by BPL Mumbai, Essar Group owns 10%] 21 licenses and spectrum in 4 circles. Swan Telecom [Reliance Communications company] and Shyam Telelink [Majority owned by Sistema].
Tencent Invests in MIH Internet – ibibo + dwaar + onefamily .com
Tencent Holdings has announced an USD 7.5 Mn investment over a 3 year period in MIH India Global Internet, promoter of Indian Social Networking site – ibibo.com, local search engine dwaar.com and a family tree portal onefamily.com.
Naspers Limited promoter of MIH India Global Internet holds substantial equity in Tencent Holdings and thus this indirect equity infusion with some technology transfer too.
Tencent has the right to subscribe for new shares up to the maximum amount resulting in its holding 50% shareholding of MIH India Global Internet minus one share, with conditions on assuming certain loans. This deal is part of a deliberate long-term strategy of securing strategic stakes in leading private companies in key companies that, like India, will likely become important Internet markets in Asia.
Tencent has granted MIH India Global Internet a perpetual and royalty-free license, mainly to use certain of Tencent’s software, content and trademarks, as well as some other unspecified materials, in India, for nil consideration.
Update: Financials of MIH India Global Internet
If you are wondering how much these startups maybe spending and earning here is a brief insight.
- Consolidated total assets of MIH India Global Internet were approximately Rs 320.82 million
- Net liabilities at the end of FY08 – Rs 741.58 million
- Consolidated net loss (after taxation and extraordinary tems) for the years ended 31 March 2008 and 31 March 2007 were approximately Rs 585.45 million and Rs 196.88 million
Intra circle roaming permitted
In a circular, the Department of Telecommunications / DoT has permitted mobile operators (both existing operators and license holders) in India, to provide intra service area (intra circle) roaming facility based on mutual commercial agreements amongst each other.
Now why would one need Intra Circle Roaming ?
Companies like Spice Mobile in Karnataka hardly have service areas in the interiors and to serve customers of Spice, Intra circle service is essential at times of emergency. [When you are in Home circle, you cannot manually choose a different network / service provider, but from now on, if Wireless operators wish, their customers can]
Intra circle roaming is now permitted but not mandatory. So, the existing operators may choose not to provide the facility to the new entrants or vice versa. DoT has suggested that TRAI can prescribe tariffs for the intra circle roaming arrangements. Presently, for inter circle roaming, TRAI imposes tariff ceilings and not an absolute charge / rentals.
Upcoming service providers can go for an arrangement with spectrum abundant Telcos for Intra circle sharing until they roll out their own services. However, TRAI’s prescription for tariff on intra circle roaming becomes critical in this case.
GSM subscriber base crosses 200 million
GSM operators reported combined subscriber net-adds of 6.6M in May versus 6.5M in April assuming that Reliance Telecom’s net adds in May were same (342,000) as in April (the numbers have not been disclosed yet). GSM mobile subscriber base has now crossed the 200 M mark and now stands at 206M.
Bharti Airtel reported 2.46M net adds in May vs 2.39M in April. At this rate, Bharti’s wireless subscribers will exceed our Mar-09 forecast of 89.1M. Aircel is gaining traction; has commenced operations in Kolkata circle and reported a 55,030 subs addition in the first month.
Total GSM Wirless Subscribers at the end of May-2008, operator wise
Bharti Airtel 66,826,000
Vodafone India 47,467,000
BSNL 36,997,000
Idea Cellular 26,141,000
Aircel 11,492,000
Reliance Telecom 7,701,000
MTNL 3,350,000
Others 5,829,000
Separately, if Idea Cellular wins Spice Telecom bid, it will inch closer to BSNL with a subscriber base of 30.63M and entry into the powerful circles of Karnataka and Punjab with spectrum in the most sought after band, 900MHz.
Northgate’s Social Media Exchange records solid growth
Northgate Technologies promoted Social / Online Media Exchange platform that is powered by Axill, has recorded solid growth of 82% YoY and accounted for 82% of total revenues of the company.
Northgate launched the beta version of Social Media Exchange (SMX), an online platform connecting buyers and sellers. The platform covers three primary media.
SMX has exclusive rights to monetize 25 trains in Delhi Metro, 300 bus shelters in Chennai, and 20 Tier 2 rail stations across India. Contracts with 3 regional TV channels and in the process of negotiating with another 6 channels and over 300 online web properties including BharatStudent, Ziddu and EggLadd.
Online media properties contributed 18% of Northgate’s total revenues. The company has also launched Longhaier.com – A student-oriented Chinese language social networking
website produced in partnership with Tencent. Flagship portal, BharatStudent recorded 70 million page views per month from 3.5 million registered users ans is amongst the top 20 websites in India. The portal is associated itself with 14,000 colleges of higher education in Australia,India, UK and the US.
Feed
