Indian CDMA wireless operators market share dips
On this blog I have consistently covered about hurdles in CDMA operators way. Various factors have led to the decline and fall of subscribers and market share. At the end of Dec-2006, CDMA operators had 27.85% market share. 20 Months later [Aug-2008] CDMA operators have 76.5 mn subs[ RCom CDMA has 46,460,140 subs and Tata Indicom has 29,180,06 subs. Other CDMA operators together have ~1,000,000 subs. These Nos include Fixed Wireles Phones.] which translates to 25.5% market share – A drop of 2.35% when the number of mobile subscribers in India have actually doubled. This is also consistent with how Idea Cellular, a late entrant, pipped Tata Tele / Indicom Mobile, a CDMA service provider out of the Top 5.
Going forward, CDMA future looks a little uncertain as they compete against 5 incumbent GSM operators and 4 new GSM entrants. Reliance CDMA will compete with group company Reliance GSM. [Reliance Insiders tell that both the entities will operate as different cost centers] But analysts on Dalal Street are already making the case for Reliance Communications to completely switch to GSM. Another report doing the rounds on the street is, Reliance GSM will be launched under the original Universal Access Service License (UASL) which entitles the company for Sec 80IA benefits of the Indian Income Tax act – 100% exemption of profit for the first five years and 30% in the next five.
Tata Teleservices/Indicom Mobile out of Top 5 Operators
At the end of August 2008, Indian Telcos reached a big milestone of serving 300 million wireless subscribers. The big news is that Tata Teleservices focused on providing CDMA cellular services has slipped out of the Top 5 ranks and Idea Cellular is the new entrant.
Bharti Airtel has consolidated is position in the 2G Wireless services controlling a fourth of the Indian market. Expect intense competition from Vodafone India in the next two quarters as it expands its service launches in Category – C circles.
The Top 5 Wireles Service Providers in India and their subscriber numbers at the end of August 2008 are as follows.
- Bharti Airtel with 74 mn subscribers
- Reliance Communications with its GSM and CDMA operations has a combined subscriber base of 54 mn subscribers
- Vodafone India with 52 mn subscribers
- BSNL the biggest loser during the best times of subscriber additions has 38mn subs
- Idea Cellular pipped the mammoth Tata group company Tata Teleservices / Indicom to have 29mn subs. Add 3.5mn Spice Tele subs to it [ Spice acquired by Idea]
Keep up the great show.
Amendements to NDNC Registry for better grievance redressal
Acknowledging that the National Do Not Call Registry hasn’t been effective in curbing UCC even after a years operation, the TRAI has issued amendments to the existing act to make it more effective.
TRAI has asked service providers to give an option to consumer to opt of of UCC at the time of obtaining the mobile connection. Service providers have to make this clearly visible in the application form.
Another poorly implemented measure by the Indian telcos was “complaint handling for an UCC“. Operators would conveniently reject the complaint on the basis that it was received beyond the 7 days period. The new laws have made the operators accountable for the complaints and have also made it mandatory that the Cellcos give an investigation report back to the customer about his UCC complaint. [18th Sept Notification by TRAI, Demand and Exercise your Rights]
The Telcos should realize that if they fail in implementing these measures, then TRAI will be left with no option but to recommend a Do Call Registry.
GSM Operators Rock amidst Inflationary Pressure in Indian Economy
In spite of the Inflationary pressure prevailing in the Indian Economy, GSM Wireless Operators continue to add record users though the m-o-m growth has tapered now, at least in case of Bharti Airtel.
As usual, Reliance Communications numbers are not yet available and assuming the same number of adds as in previous month, GSM Operators now have ~226 mn mobile subscribers 
55% of the net additions came from Category – B and Category – C circles. [No iPhone effect in the metros yet 
]
Bharti Airtel added 2.7m subscribers taking the total tally to 74.77m. Vodafone added 1.8m and is the second largest GSM operator with 52.75m subscribers. Vodafone also launched its service in Orissa last month. Idea Cellular operational in just 12/22 circles managed to add close to 1m subscribers taking its total tally to 29.27m BSNL with abundant spectrum and network is unable to add more subscribers and could manage to get just 0.5m taking its total subscribers to 38.49m
I am making some calculated guess on how the top 5 GSM operators will add subscribers over the next 6 months.
- Bharti Airtel is likely to add 16m subscribers and end FY09 with around 90m subscribers.
- Vodafone to add another 12mn and close FY09 with 64m subs
- Idea Cellular is likely to add around 8m subs and close the year with 37m subs
- BSNL will likely accelerate its growth and add around 6m subs over the next 6 months takings its tally to 44m
- Reliance GSM operations may get kicked off in late December coinciding with Dhirubhai’s birth anniversary and may end the FY with 14m subscribers
Skepticism on Tata WiMax Broadband reaches Dalal Street
Analysts do give a company sometime before they react on recommending a stock and the amount of time Tata Communications got was more than anybody expected. What is really commendable is the report released by HSBC Telecom Analysts – Sharma and Grinnan who have openly expressed their views against Tata Communications WiMax Broadband.
The authors say,
We have a sceptical view on WiMax, especially as an effective solution for retail broadband. Furthermore, the recently announced broadband policy is ambiguous and near-term release of broadband spectrum looks unlikely. In our view, WiMax faces a variety of technical challenges, including global spectrum fragmentation, performance issues relating to TDD operation, technical power management and sub-optimal mobility and voice support. Given this, we believe raising finance to fund WiMax initiatives would lead to value destruction.
It is only now that the management really wakes up to fix issues as Investors began to question them. E-Mail sent to Tata Communications went unanswered [Thanks to Google Apps, I still have the mail in my archive]. Maybe with the departure of laidback President [Broadband & Retail] Shankar M. Prasad, services will improve in the company. Also, WiMax as a technology is yet to mature and deliver its best, hopefully it will.
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