End of Tata’s WiMax Broadband Dream Run
In a Conference call with Analysts [I couldn't make it but here are the excerpts] Tata Communications Ltd, erstwhile VSNL acknowledged the end of its WiMax Dream Run.
Credit Suisse Analysts wrote,
Management expressed disappointment over not having won any spectrum in the recently concluded BWA auctions in India. Management indicated that prices crossed their internal realistic valuations quite early in the auction process, and thus it opted out of the bidding.
Internet Services Revenue Breakup for June Quarter-09
Internet Services in India is still a small market – 2039.51 cr / USD430 mn in Q1-2009 [June-30]. Here is the break up under various offerings as published by TRAI.
Dial-up is still in vogue – 138.52 cr 
Leased Lines – 454.09 cr
Broadband – 1221.06 cr
VoIP which is yet to gain acceptance had Rs 10.23 cr sales. The biggest Hype of all times IPTV in India didn’t even touch 1 cr sales in a quarter cumulative of all service providers Airtel, BSNL, Aksh, etc and is lagging at 0.87 cr.
Bharti Airtel – Wireless ARPU + AMU Crack in Q1 FY2010
India’s largest Wireless carrier, Bharti Airtel has announced its results for Q1 ending June-30. Wireless ARPUs are down 9% QoQ to Rs 278 from Rs 305 without any increase in Average Minutes of user per user which has also fallen by 2% QoQ to 478 minutes. Looks like RCom GSM and Aircel operations have hit hard on Airtel.
- Revenue for Q1 grew marginally to Rs 9941 cr from Rs 9824 cr reported in March-09 quarter
- Net income for Q1-FY09 was reported at Rs 2516 cr Vs Rs 2239 cr in March-09 Quarter
- Airtel Broadband subscribers reached 1.138 mn with an ARPU of Rs 1,027 down from Rs 1071 reported in March-09 quarter.
- Airtel has managed to maintain 24% Wireless Subscriber base on PAN India basis with 94.7% of its customers from the pre-paid segment. Wireless Revenues accounted for 83% [~70% after eliminations] of total revenues.
- Airtel managed to get 9.3% of its mobile services revenues from Value Added Services of which SMS is still the most popular used service contributing 4.3% of mobile service revenues.
- Airtel Digital TV reported revenue of Rs 102 cr for the current quarter
- Enterprise Services is the second largest contributor to revenue at 21% [17.5% after eliminations]
- 30% of CAPEX is seen in Digital TV and others [IPTV ?]
More updates will follow.
Airtel’s Outsourcing Deal to IBM Stronger- Airtel Karnataka Systems Down
Mr. Sunil Bharti Mittal [popularly known as SBM within Airtel] surely thought out of the Box and outsourced the IT + Infrastructure of Airtel to IBM, the first kind of its deal which others copied ET reports that IBM has bagged another contract from Bharti Infratel and other business unites – IPTV, DTH etc.
However, I fail to understand the poor quality of Airtel’s Wireless Systems in Karnataka Circle [implemented by IBM ?]. Normally, such minor issue doesn’t deserve to be on this blog, but this has become a MAJOR ISSUE and Mr. Venkatesh, Bharti Airtel Wireless CEO of Karnataka seems to be turning a blind eye.
I had an issue with ISD calling and I must have called the customer care 10 times which they could not resolve because their systems were always down. I gave up after a month. Later someone called to tell me they could not investigate further, but will give partial credit and close the issue.
Airtel is back to haunting me again. I have already written about their poorly developed Airtel Selfcare / Bill Payment system earlier and today they are down again. The worst thing is I don’t even see my Mobile A/C Number, tried to pay the Broadband bill and Self Care system doesn’t let me do it. Airtel needs to address these issues with urgency and restore customer’s confidence.
Reliance launches EVDO based Broadband – Will it make a Difference ?
Following the footsteps of BSNL and Tata Indicom Photon, Reliance Communications has launched its Broadband services on EVDO Technology branded as NetConnect. [Coverage on NetConnect Plans and Coverage Map here]
Wireless Broadband using EVDO – What does this mean ? RCom already offers broadband services via Optical Fiber Cable and WiMax. OFC customers seem to be happy, however various reviews and comments on our own blog indicate Reliance WiMax customers are a frustrated lot. Does the launch of NetConnect broadband over EVDO mean a soft acknowledgment of WiMax 1.0′s failure in India by both RCom and Tata Indicom ?
Reliance EVDO – 3G Controversy Explained: Strictly going by licensing terms, Reliance and Tata can’t provide this Wireless Broadband service. However, they are using the underlying CDMA spectrum of their 2.xG network and hence their argument. GSM lobby led by Bharti Airtel has already raised concern about this issue, but IMHO, it will be overlooked by the DoT, unless the High Court of Delhi and TDSAT come into picture [Ya you know what I mean ]
Why EVDO Now, Why not earlier ? I don’t seem to understand why didn’t Reliance and Tata get aggressive on EVDO earlier if they were confident of making their case that it is a VAS to its 2.xG CDMA services ? Ok, forgt Tata’s, they never lead, but have chosen a right leader to follow, Reliance. RCom could have started this service earlier because their was and is tremendous demand for good broadband service. Did they first test the Wireless Broadband Signal strength with WiMax and when things weren’t working as expected, took this bold step ?
Reliance Broadband NetConnect Speed: Their broadband division has sent a document which clearly contradicts all their previously stated claims on the wireless internet speed,they say,
NetConnect Broadband / EVDO is 10-15 times faster 10-15 times faster than any data card or USB modem available in the market. The connectivity speed you will get is 400Kbps to 500 Kbps.
The above statement clearly confirms that Reliance 1.x DataCard speed was /is mere 30 Kbps and not 128 – 144 Kbps as claimed [assuming 450 Kbps is what NetConnect EVDO will deliver now and is 15 times faster than 1.x USB Datacard offering] Reliance claims to have 60% market share in USB Data Card Internet Services. What about the 2 Mbps to 3.1Mbps NetConnect speed claimed ? It is practically not feasible, atleast in India and is good in theory and test labs [Correct me if I am wrong by posting a comment, I'll be happy to eat my post]
Tata Indicom Photon + RCom NetConnect the Roadmap: Tata maybe a great brand but I have the wost experience since they have never replied to my questions. RCom does reply but never acknowledges its shortcomings but silently tries to improve on its own. RCom has placed an order for 1 mn EVDO modems and assuming they they might plug them in a years time with an ARPU of Rs 1,000, the company is likely to make a bottomline of Rs 200 crore over the next 12 months [Subscriber addition in chunks of ~100K / Month over 12 months with a profit of Rs 4 crore / month = Rs 192 crore (by Arithmetic Progression) in first 12 months]
Finally, will 3G based broadband help India ? If not, the TRAI must send a strong signal to DoT to open BSNL Wireline Copper Network, atleast by franchisee route so that most of India will be connected. I feel it will be a fantastic move to preserve existing Landline customers and make them subscribe to DSL broadband / IPTV.
Reliance Communications – Lackluster Q3 – ARPUs Down 8% QoQ
Reliance Communications announced its Q3 FY09 results this evening had lackluster numbers to report.
Lets review the performance of Reliance Broadband and then run through the results. At the beginning of 2008, Reliance had wired up 787K building and providing 1 mn broadband access lines. At the end of 2008, the number is a dismal 892K buildings and 1.33 mn broadband access lines. Reliance Broadband has registered below average industry growth in 2008 – mere 33%. [74.12% as per TRAI, this means BSNL / MTNL have done an excellent job in 2008] Avg Revenue per Line has been stable at Rs 1,681.
Wireless Business continues to fill the company’s coffers despite the aggressive CAPEX in launching the Reliance GSM. ARPUs are down 8% QoQ to Rs 251 [Airtel has Rs 324] – Seriously Alarming and MOU is also down to 410 [Airtel reported 505]. Reliance will launch range of CDMA services in the next few weeks. CDMA churn rate is down to 1% indicating customer loyalty. 60% share of data card internet access market in India. There has been lot of updates on the Reliance GSM Mobile and we will write about it separately.
Reliance Globalcom has witnessed significant demand in the B2B bandwidth for Voice and Data. It boasts of customers like Vodafone, Idea Cellular, Spice, Tata Indicom and Shyam Tele to name a few. In the international arena, this segment has done well cutting deals with various Retail Chains and vendors to link their facilities across the World. One of them is an Italian chain with over 50,000 PoS systems linked processing over 6 mn transactions a day. Reliance Globalcall has 2 mn customers and is the market leader in NRI’s Calling Home country segment
Reliance Enterprise Services did witness some slowdown due the economy but the company is laving no stone unturned to encash on this. Reliance with its bouquet of offerings is finding it easier to win new customers. It has added Vishal Retail and Shoppers’ Stop to its clientele. It now plans to build a new data center in Delhi after the completion of one in Hyderabad.
Reliance Big TV managed to get 1 mn customers within 90 days of launch, which is a World Record. RCom also hopes to expand its Non-Voice Revenues from current 7% to 15-20% over the next couple of years.
Highlights from RCom Conference Call:
- No Revenue Guidance but margins are expected to be stable in future.
- To a question on discrepancies in reporting of numbers, the management is of the view that it was a campaign by rivals and it has handed over all the details requested by TRAI.
- CAPEX of Rs 15,000 crore for FY10. FY09 CAPEX revised downwards to Rs 25,000 crore from Rs 30,000 crore. [We feel RCom will be unable to meet even Rs 25,000 Cr target and may end the year with Rs 21,000 cr]
- RCom’s Optical fiber to inch closer to 200K Kms from the current 175K.
- Reliance to launch IPTV in association with Microsoft
- A question regarding the transfer of stake of Reliance Tower and Infrastructure Ltd and Reliance Globalcomm to a Reliance group company and back created some confusion as there was no clear answer. Hopefully management will come clean on this.
Stay tuned for more updates on Reliance GSM Mobile launch and its business model to lure customers
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