Nimbuzz connecting VoIP Operators with Social Networks
Nimbuzz which partnered with largest German social network - StudiVZ has announced partnerships with several VoIP service providers. They are facilitating arrangements between service providers and content owners. Jahangir Raina at iLocus says that they will be the first VoIP operator to make money. The Nimbuzz release said,
By joining the Nimbuzz Operator Affiliate Program and integrating their VoIP offering with Nimbuzz, partners have the opportunity to provide customers with mobile communication and social networking value added services at a substantially accelerated speed to market and without incurring additional overhead costs. Operators and SIP providers joining the Nimbuzz affiliate program will also benefit from new revenue streams and exposure to the community of Nimbuzz subscribers in over 200 countries.
Four Indian operators – Adepto Telecom, Amtelfone, Apnatelelink and VoIP Hit have joined Nimbuzz.
NTT DoCoMo buys Tata’s Flip-Flop Telecom story at Irrational Valuation
You are already aware of the exuberant deal between NTT DoCoMo and Tata Telservices at the time of global economic crisis. Certainly, Tata’s need to be congratulated as they were able to command a 50% premium valuations to India’s leading mobile operator – Bharti Airtel [basis of EV / Subscriber Model, explained below], despite their half-hearted, unplanned and flip-flop telecom strategy.
Tata’s were one of the original promoters of Idea Cellular who exited in 2006 as they thought CDMA was the way to go. [ A business opportunity that emerged after Reliance lobbied with then Telecom Minister Pramod Mahajan] Not a bad idea at all.
In 2006, talks failed between Qualcomm and Indian CDMA operators over various issues. RCom announced its grandiose GSM expansion plans. Late 2007 and early 2008, telecom policies were fine tuned to benefit RCom and few others, Tata Tele by now had realized CDMA alone won’t help it make to make it to the Top-5 Telcos in India and thus threw its hat and got a GSM berth and is now planning to unveil a PAN-India GSM network.
Tata’s being one of the oldest industrial houses in India should lead and not follow. To me it seems like Tata’s have been following into the footsteps of Reliance, not just in Telecom but also in Energy / Power sector. [Another story on how they diverted funds from Tata Power and lost half of it for their broadband ambitions]
Valuation of Indian Telecom Companies – Bharti Airtel, Reliance Communications, Tata Teleservices
- Bharti Airtel has an Enterprise Value of Rs 1.2 1Trillion with 80 mn subscribers
- Reliance Communications has an Enterprise Value of Rs 571 Billion with 57 mn subscribers
- Tata Teleservices’ Enterprise Value is estimated to be Rs 590 Billion with 25.5 mn subscribers
Now on the basis of EV / Subscriber, Tata Teleservices valuation was at an Irrational Premium of ~50% to Bharti Airtel and ~125% to Reliance Communications [WTF!!!] Does Tata Teleservices really deserve this premium in current market scenario ?
Now does NTT DoCoMo know more than what we do ? What is that it could be ? Will Tata’s consolidate all its Telecom Operations under Tata Teleservices ? Additionally, as we move forward into 3G, NTT DoCoMo is one of the pioneers in Value Added Services and will probably introduce them into the Indian market. Shall we now expect Anil Ambani to strike a deal at higher valuations 
Wireless Revenues – Airtel grows at cost of Reliance and BSNL
Bharti Airtel’s Gross Revenues from Wireless Operations in Q2-FY09 [June-Sept] equals combined revenues of BSNL and all the CDMA operators in India [RCom, Tata TeleServices, Shyam and HFCL]. Alternatively, Bharti Airtel’s Revenues also equals to the combined revenues of second and third largest mobile operators [Vodafone India and Reliance Communications]
According to data compiled from TRAI’s release [Wireless Gross Revenues for Q2-FY09],
- Bharti Airtel – Rs 80.1 bn
- Vodafone India – Rs 47.9 bn
- Reliance Communications – Rs 34.1 bn
- BSNL – Rs 25.6 bn
- Idea Cellular – Rs 23.22 bn + Spice Rs 3.1 bn
- Tata Teleservices / Indicom – Rs 20.29 bn
- Aircel – Rs 7.6 bn
Revenue market share of all the GSM operators continue to rise over CDMA service providers. Bharti Airtel had a revenue market share of 29.8% in Dec-07 and now has 32.7%. Vodafone India inched up from 18.5% in Dec-07 to 19.6%. Idea Cellular also grew substantially from 8.1% in Dec-07 to 10%.
BSNL and Reliance Communications were the biggest losers in revenue market share. BSNL’s share dropped from 14.1% to 11.4% while that of Reliance Communications dropped from 15% to 12.4% between Dec-07 and Sept-08. Tata Teleservices / Indicom also lost revenue market share from 8% to 7.5%.
Revenues from Which Circle ?
Across the board, Category-A circles [including Chennai] recorded the highest revenue in Q2-FY09 followed by Category-B Circles. Metro Circles stood third and Category-C circle at the bottom.
Mobile India has an excellent compilation about existing and revised 2G Spectrum Charges and Revenues.
GSM Operators acquire highest customers in October-2008
GSM Operators in India added a record number of mobile subscribers in October-2008. According to data released by COAI, they added 7.3mn. If we assume RCom’s GSM net adds were the same as last month then the addition will be around ~8 mn subscribers. The GSM subscriber base in India is a whopping 241 mn. [Excludes RCom GSM]
Bharti Airtel continues to lead the GSM pack with record number of additions. The company added 2.7 mn subscribers in Oct-2008. Airtel now has a GSM market share of 33.2% with 80 mn subscribers.
Vodafone India achieved a new milestone by adding its highest subscribers in a single month – 2.1mn. Vodafone has a 23.5% GSM marketshare with 56.7 mn subscribers. Vodafone launched its services in MP and Bihar, thus extending its services in 20 out of 22 circles. It captured 14% and 18% of net adds in Orissa and Assam, where it launched its services in August and September, respectively.
Idea Cellular also achieved a new milestone by adding highet subscribers ina single month – 1.2mn. Idea has 31.5 mn subscribers [excludes Spice subscribers of 3.6 mn] and is closing the gap with state owned BSNL which has almost stagnated its growth and has a subscriber base of 39 mn. Idea launched services in Bihar.
Aircel added 781,000 subscribers ans now has a subscriber base of 14.6 mn.
Spectrum + License Scam – A. Raja Defends + Lock-in Proposal + Insider Views
In the new 2G operator licensing and spectrum allotment scam, Telecom Minister A. Raja tried to defend his First-Come First-Serve allotment in a press conference but TRAI has always maintained a distance from A. Raja’s policy since allotment as it always wants to be recognized as a powerful Telecom Regulatory functioning with integrity. TOI writes that A. Raja has very weak standing in this case.
I strongly criticized A. Raja’s spectrum allocation move in Feb-08 but in vain. Why didn’t our dear politicians in the Left / Communist act then ? Don’t they all know prevention is better than cure ? Do our Left / Communist political bosses want a Nano shift to happen in new Telecom operators + licenses ?
3 year lock-in for new operators – An Eye wash:
It is the Government under the able leadership of A.Raja which has committed the mistake [or with vested interest ?] of allowing new licensees to sell their stake without any roll-out obligations or commitments. Now A. raja is making an attempt to dilute the issue by a fresh 3 year lock-in period clause.
Insider Views:
What has happened is, cash rich companies like Unitech and Swan [was once backed by Anil Ambani, but the thin thread seems to be cut now and is now part of Mumbai based Realty Major Dynamix Balwas] floated wireless subsidiaries and wanted to make a quick buck by getting the license and spectrum and sell it off to some foreign operator [It is a suspense which only A. Raja can confess on why he opted for the First-Come First Serve Policy]. But due to Global Economic crisis, the plan didn’t work as well as they expected but they still managed to pull the strings together and rake in a moolah. Unitech Sold stake to Telnor and Swan sold stake to Etisalat. This is when the Political bosses in Left / Communist woke up as they realized what was the true value of 2G mobile license and spectrum 
I am wondering what is the solution to the problem, when elected representatives of people act against the interest of the Nation.
A. Raja’s Telecom Licensing + Spctrum Challenged
Exactly a year ago I had written on how A. Raja was favoring certain business houses with twisted policies as if it was his grandfather’s Ministry. Finally, a brave soul Mr. Gupta has come forward and filed a Public Interest Litigation in the High Court of Delhi against License and Spectrum allocation.
The left front has accused A. Raja for a Rs 51,000 crore [$10 bn] Telecom License and Spectrum allocation scam. What was the Left doing over the last 6 months when Mr. Raja was allotting spectrum as though he was the king of India.
How A. Raja favored Reliance again ?
Recently, Mr A. Raja has levied an additional 2% spectrum fee for operators holding more than 6.2 MHz of spectrum. This will directly affect BSNL, Bharti Airtel, Vodafone and Idea Cellular. BSNL is all in the house matter, so its spared and the other three have to bear it. Now according to telecom policy / TRAI GSM operators were eligible for twice the spectrum than their CDMA counterparts as the latter network was considered more efficient and was give preference in the frequency range. So why isn’t A. Raja levying a 2% spectrum fees on CDMA operators holding more than 3.1 Mhz of spectrum ? Reliance will be severely affected and Tata Indicom to some extent.
This will go on and hopefully end once the 3G licenses are auctioned.
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