Wireless Operators @ DoT to surrender Licenses – Consolidation Soon
The DoT has leaked to the media that some of the new entrants have approached the DoT to surrender license and spectrum in some or all of the circles. Etisalat DB, Loop, S Tel are the likely players. This means their will be an end to the 2G wireless spectrum crunch faced by the incumbent players and hence better use of 3G spectrum for Broadband and Data.
As per current license conditions, there is no refund of license fees on return of license and spectrum. However DoT is studying the same to enable exit of some of the non-starter telcos. DoT is also studying M&A guidelines to enable Read more
Reliance Mobile ARPU Drops 24% in Q2- Broadband ARPU Rises
RCom quietly announced its results yesterday [if you run a company and have bad results to announce, do so on a holiday, only if you are worried about huge SELL OFF in your stock] and the numbers look way too ugly. Employees at the Wireless division must be singing Queen’s song – Under Pressure 
Look at Wireless ARPU Rs 161 [GSM + CDMA + FWP] it has dropped 24% QoQ. EBITDA down 20% and Net profit has halved. Awesome!!! Quick peek into the results, Read more
GSM Wireless Subscribers Base at 289 mn Ex-Reliance – Airtel Subscribers Reach 94 mn
According to figures released by the COAI, the Indian GSM Wireless Subscribers base has touched 288 mn [ 288,363,482] excluding Reliance GSM. GSM operators added a record 10.8 mn subscribers in the month of March-09, the highest ever addition since they began operations in India.
- Vodafone Essar India added 2.84 m subscribers beating Airtel to reach 68.76 m subs
- Bharti Airtel added 2.80 m subs takings its total tally to 93.9m
- Idea Cellular added 1.5 m subs ans is now serving 43 m subs across India
- Aircel is coming strong as it added 1 m subs and now has a total subscriber base of 18.4 m
- BSNL continues to be the laggard adding just another 1.08 m subs and has a base of 46 m subs
Will be updated when Reliance GSM releases its numbers.
Bharti Airtel Downplays Reliance Mobile GSM Tariff War
Bharti Airtel’s management dismissed any threat from Reliance Mobile’s GSM Tariff war which includes Free minutes and Low Lifetime Pre-Paid validity cards. Significant number of questions in the Analyst call were related to the tariff war which was downplayed collectively by Akhil Gupta, Manoj Kohli and Sanjay Kapoor.
Mr. Sanjay Kapoor President, Mobile Services at Bharti Airtel said,
We will not have a knee jerk reaction. No free minutes models are sustainable. Reliance will eventually withdraw after sometime. Airtel will remain competitive with excellent QoS. Since Reliance GSM launch in the past few weeks, we have not seen any impact nor there is any such caution to be noticed.
I am not quite sure which of the above executives said this,
Free Minutes will see huge rise in traffic. There is a section of customers who are deal seekers and who churn from operator to operator. Once freebies stop, these customers move back or settle else where. We are not worried about this.
Coinciding with elimination of FREE Minutes and distinguishing itself as a Superior Wireless Company in India, Bharti Airtel did terminate some FREE minute schemes thus seeing lesser MOUs.
Mr. Sanjay Kapoor further came down heavily on Reliance Communications,
There is a cost differential in maintaining and expanding 900 MHz and 1800 MHz networks. Reliance currently has constant revenue stream and is thus offering FREE minutes to lure customer. However, this cannot go on as the company will start eating into its own revenues [60 CDMA mobile subscribers] and is self destructive. Market seeks Big Brands. The top 2 companies had 50% of the Revenue market share. Airtel has a huge loyal subscriber base.
Additional details from the Call,
- Airtel has seen an increase of less than 1% in Spectrum charges and is awaiting more spectrum in more circles.
- Addition of new users unlikely to drive the MOU / ARPUs. What this really means is as Airtel expands in rural areas, market expected customers to rise and MOU to fall, but looks like the company now has a solid strategy to preserve it from being eroded.
- Airtel declined to comment on WiMax bidding as the policies are still unclear and also for competitive reasons. [So this makes me thinking if Airtel now wants to bid for WiMax spectrum along with 3G ?]
- International Roaming revenues have been below expectations. [We really wish Mr. Maran was still in the HotSeat of IT & Communications ministry where we could have seen a drastic fall in International Roaming Rates]
Even with the launch of Reliance Mobile GSM discounted tariffs, Airtel clearly states that there is no shift from the sweet-spot to sub-optimal, at the moment 
It is really worth noticing that Reliance continues to offer FREE calling while Airtel is against it. What are you consumers for ? [Remember QoS, Customer Care etc]
India Wireless Subscriber base at 342 mn – Dec-2008
At the end of Dec-2008, Indian Wireless subscriber base touched 342 mn [+49.0% yoy]. A whopping 75.5% of the subscribers are on GSM platform while the remaining 24.5% opted for CDMA. 112m wireless subs were added in 2008, 36% more than were added in 2007 (83m).
Top Mobile Service Providers in India at the end of 2008:
- Bharti Airtel – Ended 2008 with 85.65 mn subscribers
- Reliance Communications – GSM + CDMA together had 61.34 mn subscribers
- Vodafone Essar – 60.93 mn mobile subscribers
- BSNL – 41.36 mn cellular subscribers
- Idea Cellular – 34.21 mn + Spice – 3.8 mn
- Tata Teleservices / Indicom Mobile – 31.76 mn subscribers
The following pie-chart shows the market share of various mobile operators in India led by Bharti Airtel controlling 25% of the market.
Indian Metros had 56.06 mn subscribers while Circle A had 120.75 mn subscribers. Circle B is leading the telecommunication revolution with 126.82 mn subscribers while Circle C is still trying to catch up with 38.38 mn subscribers. Bharti Airtel and Vodafone Essar had comparable ARPU / Month of Rs 320 while that of Reliance Communications is around Rs 300.
So where do you think India will end 2009 with in terms of subscribers ? Can we hit the 500 mn milestone this year ?
2G + 3G Spectrum Pattern + Likely Pricing for 3G
If you are a regular reader of this blog, then you are already aware of our coverage on 2G spectrum allocation.However, it is important to note the frequency bands in which Indian Telcos operate.
- CDMA – 824-844 and 869-889 MHz
- GSM – 890-915 and 935-960 MHz
- CDMA / GSM – 1710-1785 and 1805-1880 MHz
Now as far as 3G is concerned, India has offered the same frequency as Singapore, Korea, Malaysia, etc at 2100 MHz and is fairly in line with the rest of the world.[Very essential to make a business case for Telcos as it becomes easier to deploy the networks]
- 3G – 1920-1980 and 2110-2170 MHz
Pricing: The consensus estimates by various analysts is that the all India pricing for 3G spectrum is likely to be $1 bn or ~ Rs 5,000 crore [Excludes Rajasthan and North East] This may change if we see foreign Telcos throw their hat in the ring and will be known only when the list of bidders is announced in Jan 6th, 2009. Indian 3G spectrum is likely to be the most expensive in Asia and Australia.
Additionally, Government has said that foreign 3G entrants will get 2G spctrum. It would be unfair to rely on Government headd by IT Ministr like A. Raja who will twist and turn policies according to his will
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