Airtel dials 'self-regulation' to address call drop issue

PRAVEENA SHARMA | Fri, 13 May 2016-08:30am , New Delhi , dna

A day after winning the legal battle against Telecom Regulatory Authority of India (Trai) in the call drop compensation case, India's largest telecom operator Bharti Airtel has rolled up its sleeves to get its act together to spruce up its quality of service (QoS).

The Gurgaon-based telecom service provider claimed it has imposed on itself 25% more stringent call drop benchmark of 1.5% than telecom regulator's prescribed 2%.

Gopal Vittal, managing director and CEO (India & South Asia), Bharti Airtel, said the self-regulatory move emphasised the telecom company's commitment to improve its QoS.

"This self-regulation on quality of service further underlines our commitment to our customers despite the challenges of limited spectrum availability and acquisition of sites in urban areas," he said in a statement issued by the telco.

The telecom service provider's move comes after a huge debate over the rising call drop menace and its resolution, which led to the telecom regulator imposing a penalty of telcos in the form compensation of Rs 1 for every call drop, with a limit of three call drops per day. The penalty was to begin from January 1.

Telecom players fiercely opposed it and approached the Delhi High Court, which delivered a verdict against it. They raised the issue in the Supreme Court, which has ruled in their favour and struck down Trai's punitive compensation for call drops, terming it as "arbitrary and unreasonable".

Commenting on the SC's judgement on Wednesday, Mahesh Uppal, director at telecom consultancy firm ComFirst (India), said that Trai had "exceeded its brief and short-circuited the process" by trying to penalise the telcos for call drops.

"I think, Trai's heart was in the right place but clearly it had exceeded its brief and short-circuited the process. I'm hoping that this (SC's order) will persuade Trai to do what regulators elsewhere (in the world) do to deal with quality of service, which is to put information (on QoS) in the public domain. This will help users find out which operators offers good service and choose the most appropriate one. This is how market regulation works and this is how it should have worked here (India)," he said.

Uppal said the sector regulator had taken "a very whimsical approach"; "it was a very whimsical approach and virtually unenforceable. So, it is good that this method of dealing with the problem (of rising call drop) is going to be abandoned and a more market-based method will have to be resorted to".

Rajan S Mathews, director general of industry lobby body Cellular Operators Association of India (COAI) said with the apex court striking down Trai's way of addressing the call drop issue, it was time to move "forward, along with the Department of Telecom (DoT) and Trai, to address key issues like affordable spectrum, state permission for cell towers and right of way (RoW)".

"These are the things that create the call drop and so if you address them, we are sure to address the issue of call drops for the customers," he told dna.

G Krishna Kumar, Bengaluru-based telecom executive, believes some penalty would have been "desirable".

However, he feels, the public uproar over the past 6-8 months on the call drop issue has ensured that telcos will not ignore the issue.

"The compensation for call drop was only to be seen as a deterrent for ensuring the telcos provided the right quality of service," said Krishna Kumar.

He said Malaysia has effectively implemented call drop compensation and achieved 30% reduction in call drops over three months.

"It will be sad if the telcos don't continue to invest and improve the infrastructure and strive to meet the prescribed call drop norms. We need impartial and accurate information on call drops and other quality parameters to be published on a weekly basis," said the Bengaluru-based telecom analyst.

Most telcos have announced huge investment for network expansion. Airtel, under its Project Leap, would be spending Rs 60,000 crore over the next three years to improve its mobile network.

Here's how much subsidy Freedom 251 would need to fulfill 6 crore phone orders

PRAVEENA SHARMA | Tue, 23 Feb 2016-09:10am , New Delhi , dna

Even if we were to put aside all other doubts about Freedom 251, priced at Rs 251 by Ringing Bells, Pankaj Mohindroo, president of Indian Cellular Association (ICA), says it would be impossible for it to fund the subsidisation of the smartphone.

The recently launched Freedom 251 has taken the Indian market by storm with its unbelievable, and as many claim commercially unviable, pricing.

Mohindroo, who has asked the telecom ministry to look into the venture's tall claims, told dna it was a "serious matter" and that just the cost of subsidising the seven crore orders received in three days by the company would be more than daunting.

Even G Krishna Kumar, a Bangalore-based telecom analyst, said Ringing Bells would have to rely heavily on cross-subsidisation model to meet its promise on pricing, with the "bill of material" for a decent quality mobile phone in India currently being upwards of Rs 2,000 per unit.

"The bill of material of a decent quality phone will be upwards of Rs 2,000, that is the bare minimum cost to make a phone. There will also be overheads irrespective of the channel used for selling the phones (e-commerce or brick and mortar shops). So, if they are selling it at Rs 251, someone is subsidising the phone," he said.

After the overwhelming response that the company received for its product, it has stopped taking any more bookings.

dna was unable to reach the company officials on Monday, but according to reports in the media one of the promoters of Ringing Bells Mohit Goel assured all orders would be met on time.

Krishna Kumar observed that the orders that the handset company had received was more than 50% of the current smartphone market. According to the market research and analysis firm International Data Corporation (IDC), India's smartphone market was 103 million in 2015. The three-day order of Ringing Bells of around 70 million comes to about 70% of this.

"Rs 251-phone, if indeed can be realised with acceptable quality, can hugely disrupt the Indian smartphone market. India is among the fastest growing market for smartphones with about 2.5 crore smartphones sold every quarter in the country. That's about 100 million phones in a year," he said.

However, he said India had moved beyond the "cheapest only sells" market. "Just 10 years back before the Indian mobile phone makers entered the market, ultra-cheap Chinese phones were popular, but then they soon lost the market due to poor quality," said the telecom expert.

Government will have to cut 700 MHz base price, say experts

PRAVEENA SHARMA | Wed, 3 Feb 2016-08:15am , New Delhi , dna

GSMA terms the telecom watchdog's valuation of the spectrum band as "unrealistic"; one expert says it could be slashed by as much as 20-25%

After the outcry of the Indian lobby body Cellular Operators Association of India (COAI) on the exorbitant pricing of spectrum in the 700 megahertz (MHz) frequency band, international mobile operators' representative organisation GSM Association (GSMA) also on Tuesday termed it "unrealistic" and telecom experts said the government had "no choice but to cut the price".

Hemant Joshi, partner, Deloitte Haskins & Sells LLP, told dna the government would have to come out with a "fair and workable price".

The government has no choice but to cut the base price, which is unrealistic and not reflective of National Telecom Policy 2012 (NTP 2012) and Digital India objectives. They should come out with a fair and workable price and time it (the spectrum auction) in a way that everybody (telecom operators) can participate in the auction, or else a few of them (operators) will corner the spectrum (in the efficient 700 MHz band)."

The NTP 2012 and Digital India programme aims to provide connectivity to all in affordable, secure and reliable manner. Last week, the Telecom Regulatory Authority of India (Trai) came out with its recommendations on spectrum pricing for the forthcoming auction, where it has valued the airwaves in 700 MHz band at a base price of Rs 11,500 crore per MHz.

G Krishna Kumar, Bengaluru-based telecom professional, believes the sector regulator had intentionally set the price high so that it had the margin to further negotiate the price.

"As in the past, the Trai proposes a high base price for the auction, and after the uproar from the telecom companies (telcos), reduces it. Eventually, the reserve price could be reduced by 20-25%," he said.

Krishna Kumar said globally 700 MHz-based data services are being pursued mainly by countries that have matured data subscribers like the US, Germany, Japan or Australia.

According to him, leading service providers like T Mobile and Telstra are aggressively using this spectrum to bolster their data services.

"The benefits of 700 MHz spectrum, also called as the digital dividend spectrum, are very high, offering 3-4 times coverage area. They can be very useful for the rural areas," said the telecom expert.

He sees a challenge in the mass adoption of this spectrum band because currently there are only a few high-end phones supporting 700 MHz.

Deloitte Haskins and Sells's Joshi believes the four times multiple valuation of the 700 MHz band spectrum, based on the discovered price of 1800 MHz in the last auction, did not make sense at a time when the balance-sheets of most telcos were stretched and realisations from voice and data services dipping.

Google plays Santa in India

Thursday, 17 December 2015 - 7:35am IST | Place: New Delhi | Agency: dna | From the print edition

There is a strong business case in the announcements made on Wednesday by the US-based Internet search company CEO Sundar Pichai on his maiden visit to India after he took over as its head.

If free Wi-Fi at 100 Indian railways stations,Project Loon to provide Internet through balloons, Internet Sathi programme for training three lakh women in villages and other such plans of Google will help the government to push its Digital India initiative, it will also lift the revenues of the Santa Clara headquartered search company.

Here's how Google will commercially gain from what it plans to do in India.

G Krishna Kumar, Bangalore-based telecom executive, said the widening of internet user base in India will lead to Google improving its advertisement revenues, which currently constitutes over 90% of its total revenue.
"By enabling internet access to more people, Google's ad revenue can be strengthened," he said.

The Project Loon and Internet Sathi too will help in further penetration of internet in the country, which would translate into higher advertisement revenues for the company.

"Still over 50,000 villages in India don't have internet access and the Project Loon provides a sudden opportunity for enabling Internet access. How well Google is able to handle the operational problems that they would encounter will be critical," he said.

Krishna Kumar pointed that if the system developed by Google is robust enough then it will certainly help the government's Digital India. He said the business model between the search company and the telecom companies (telcos) would also be critical for its success.

In Indonesia, Google recently tied-up with telcos for offering Internet services through Project Loon.

"It will be interesting to see how this will play out and can provide learning for Google's plan to implement in other countries (like India)," he said.

Telecom minister Ravi Shankar Prasad said his ministry has given an in-principle nod for the Project Loon's pilot and a final decision would be taken after all the security aspects and clearances from aviation ministry were sorted out.

"In-principle, we are agreeable for a pilot project (Loon). Certain issues of security and the harmony with civil aviation ministry have to be done. We'll finalise that also, but surely we are quite open to the idea of the Project Loon being undertaken on a pilot basis," he said.

Prasad informed Google will partner with BSNL for the pilot.

Google's free Wi-Fi at 100 railway stations by 2016, beginning with Mumbai Central Station, would also bring in revenues from both advertisement and increased surfing with easy Internet accessibility at the stations, which would be cheaper than the roaming rates on regular mobile services.

"Most of these free Wi-Fi come with advertisements. Also, we have generally seen that people tend to continue surfing even after the free browsing time is over at stations and airports as they are cheaper than roaming charges," said Krishna Kumar.

Other announcements made by Pichai include hiring in Bangalore and Hyderabad, setting up new campus in Hyderabad, training two million developers along with the National Skill Development Council and bicycle for women (Internet Sathi) programme to help women get online.

The Google chief expects India's Android user base to surpass that of US by next year.

"We are excited to partner for Internet Sathi along with Community Service Centres (CSCs) and we are focused on bringing Google's products to many more Indian languages so that we can reach Indian villages," said Pichai after his meeting with Prasad.

Threat of fine to telecom operators brings down call drop rate

Thursday, 26 November 2015 - 8:25am IST | Place: New Delhi | Agency: dna | From the print edition

The latest data of the TERM Cell, the vigilance and resource monitoring arm of Department of Telecom (DoT), revealed that all major telecom operators had registered an improvement in their call drop rates in Delhi till October-end, and were now only marginally above the benchmark rate of 2%.

The latest improvement in the call drop situation in Delhi, which was amongst the worse areas, comes after the Telecom Regulatory Authority of India (Trai) recently cracked its whip by coming out with a proposal for imposing a penalty of Re1 per call drop with a limit of three for one day

The TERM Cell numbers, put out on Wednesday, show most telecom companies (telcos) rates were moving closer to the benchmark rate of 2%, but telecom minister Ravi Shankar Prasad said he would like it to see further improvement.

The call drop rates have improved also because 13,775 cell sites have been repaired. The last survey had shown 27,598 cell sites were defective. This left 13,823 more cell sites to be repaired.

Bangalore-based telecom executive G Krishna Kumar said Trai's ultimatum to the operators to improve services or pay fine seemed to be working well.


"I don't think the fine would be imposed. It was only meant to be a deterrent (for the telcos) and seems to be working fine with all of them (telcos) swinging into action," he said.
 

Cases in Business Marketing

Just found - I am quoted in this book titled "Cases in Business Marketing", Published by Tata McGraw Hill 2013 Chapter 6 page 103 . "Indian OPD Industry orbiting its way to the core"

This has been taken from my column "Can we get an Indian Huawei?" published in FE 2011

Quoting G Krishna Kumar, Financial Express 2011 -
Eight of the world’s top 10 most innovative companies of 2011 are in the ICT domain, reports a US based magazine Fast Company. Not surprisingly, all of these are product companies. While India is the largest exporter of ICT services, generating revenue of $76 billion from the IT sector, but products contribute to less than 2%. India’s contribution to technology innovation is negligible.
The product companies witness non-linear growth (not proportionate to the head count)—the revenue per employee or profit per employee of Google or Microsoft is over 20 times that of India’s top services companies. Also, these technology giants serve as a beacon and are the undisputed trendsetters on the world technology road map.

Nasscom indicates that delivery model innovations such as SaaS and innovative revenue models could fuel IT product adoption in future.
BERD (business expenditure on R&D) and patents/IP management are key indicators of a country’s technology innovation capability. An EU commission report on ICT 2011 indicates that India lags behind China and other emerging economies in terms of BERD/GDP. While China has seen a 10-fold increase in the number of patent applications over the past decade, India’s contribution is insignificant. Generating IPs and protecting them is just one part of the story. Realising value from the IP is a different ball game. Appropriateness of the solution is the key. 

DoT report rekindles fire over Net Neutrality

Monday, 20 July 2015 - 8:04am IST | Agency: dna | From the print edition

Reactions to the government panel's report on Net Neutrality range from stunned to amused, and most are wondering whether it has given in to the pressure from the telecom giants.
Nikhil Pahwa, a volunteer of savetheinternet.com and editor of MediaNama, said that while the department of telecom (DoT) committee has taken a middle path, it has deviated from the main objective of coming out with a regulation for saving the Net Neutrality to saving telecom companies' (telcos) revenues.
"What was supposed to be a regulation for protection of Net Neutrality has turned out to be more a regulation for protection of telcos' revenues. Curiously, the panel even states it so in the report and we are opposed to any such move," he said.

G Krishna Kumar, a Bengaluru-based telecom executive, is also quite amused by the submission of the panel to the telcos' demand.
"It is quite amusing that even after the uproar created due to Airtel Zero, it has been given an okay by DoT panel stating that Trai (Telecom Regulatory Authority of India) would take a decision on a case-by-case basis," he quipped.
Airtel Zero is a platform developed by Bharti Airtel that will charge app developers for data while consumers will get free access to it. Many believe it goes against the tenet of Net Neutrality as it will discriminate between apps.
At the same time, both Pahwa and Krishna Kumar believe that the panel's suggestions have some positives too. One of them being no licence required by over the top players (OTTs) for instant messaging services in the domestic market.
Pahwa, however, feels that institution of carriage fee for internet usage under Airtel Zero-like platform would be a disadvantage for start-ups and could compel them to set up their businesses elsewhere in the world.
 Krishna Kumar is of the view that pure Net Neutrality was just a wishful thinking.
"Telcos will need flexibility on cost and priority of data. While differentiation based on broad category of applications like VoIP (Voice over Internet Protocol), streaming, etc., is okay, we don't want specific content providers' data to be given different priority. For example VoIP apps should be given higher priority, but within the group Viber and WhatsApp should not be differentiated," he said.
Even Mahesh Uppal, director, Com First India Pvt Ltd, said Net Neutrality of the kind in the West was a non-starter in India. He feels something like Airtel Zero was necessary to help telcos to come up with innovative pricing to subsidise people to come on to the internet. Today, internet penetration is as low as 20%. Given the low internet access, Uppal believes the debate on Net Neutrality, at this stage, was more like the 'if you can't eat bread, eat cake' argument. "Net neutrality cannot be treated as a priority, given India's level of internet usage and access," he said.
Many also cannot decipher the discrimination between Airtel Zero and Internet.org as they are not very different from each other. The government expert committee believes that the content and application providers like Internet.org should not be permitted to act as a "gatekeeper".
Internet.org, although criticised by DoT, has over 80 million subscribers in the world and over eight lakh users in India.
A Bank of America-Merrill Lynch (BoA-ML) report on the issue said that government committee's stance seems "mildly positive for telcos" as it would reduce voice revenue cannibalisation from VoIP.
BoA-ML analysts Sachin Salgaonkar and Karan Parmanandka wrote if the suggestions were accepted by the government, new telcos like Relaince Jio (RJio) could look at acquiring VoIP licence.
"Given RJio's lack of traditional voice offering and considering that its Vo-LTE offering may not be mature immediately, we see possibility that Jio may look to acquire a VoIP license," they say in the report.
According to them, if such a scenario were to play out, then there would be no free VoIP call offers and this would be positive for all telcos as it will reduce cannibalisation of voice revenues from VoIP uptake. Their international revenues, however, would remain under pressure as that traffic would continue to move to VoIP.
 

Government gives telecom companies a ring on rising call drops

Wednesday, 8 July 2015 - 6:50am IST | Place: New Delhi | Agency: dna | From the print edition

Inundated with complaints on rising rate of call drops, telecom minister Ravi Shankar Prasad on Tuesday talked tough with telecom companies (telcos) and announced a slew of measures the government would take to rein in the menace.
These included directing telecom service providers (TSPs) to optimise radio frequency network, a special audit of service quality by department of telecom (DoT), enabling in-building solution (IBS), modification of building by-laws to include a provision for telecom infrastructure and exploding myths on health hazards of radiation from mobiles towers.
Interestingly, even as grievances relating to call drops have shot up across all circles lately, as per the latest Telecom Regulatory Authority of India (Trai) report the parameter call drop rate has shown improvement during December 2014 quarter, compared with the previous quarter.
The permissible limit of call drops set by Trai is anything less than 2%. Trai's findings for the December quarter last year shows the call drop rate improved to 2.7% from 3.28% in September quarter.
G Krishna Kumar, a Bangalore-based telecom professional, said, with a "disparity" in the findings of various agencies on call drops and the actual reality on the ground, the government should look at taking direct feedback from consumers to get the real picture.
"Looking at the disparity between what subscribers experience and what is reported by the network operators/auditors and Trai, the government should actively consider collecting customer perception or quality of experience," he said.
Krishna Kumar also called for strict parameters for measuring the quality of service for data to study whether consumers were really getting 3G and 4G data service for the rates they were paying for. "The special audit suggested by the minister is most welcome. But it all depends on how well the operators will respond to the results," he said
One of the major reasons for call drops is the resistance of local people against installation of mobile towers in their vicinity because of the propaganda about its health risk.
The minister said such beliefs were aggravating the problem of call drops. "Talk of call drop and campaign for removal of BTS (base tower station) cannot go together. We need telecom infrastructure and BTS to improve service," he said.

Digital India faces NoFN delay,hurdles

Tuesday, 30 June 2015 - 7:10am IST | Place: New Delhi | Agency: dna | From the print edition
Viable revenue model, work flow automation, proper eco-system and host of other things crucial for success of government's ambitious Rs 1.3 lakh crore project, say experts

As the government makes a fresh bid to push the Digital India programme, which has been snagged with delays in the National Optic Fibre Network (NoFN) and other hurdles, experts said various issues like working out the revenue model, work flow automation, creating an ecosystem for it and others would have to be addressed to make it successful.
On Wednesday, Prime Minister Narendra Modi will launch the Rs 1.3 lakh crore programme that intends to create infrastructure to digitally deliver government services to citizens.

Bengaluru-based telecom professional G Krishna Kumar said while Digital India was a great initiative to bridge the digital divide between the cities and the rural hinterland, the government would need to embark on an e-literacy mission for training people and helping them understand the benefits of using e-governance platform.
"Even in cities, we need a strong work flow automation set-up to be established. For example, if I request for some document from the government office, I should know how long it will take for the document to be processed and also what is the current status. This removes anxiety among the citizens, an assured service level would mean better accountability and reduced corruption," he said.
Citing the example of property registration in Bengaluru, he said despite it being digitised, most processes were still done manually and required multiple visits to the local office.
"The assured services and timelines are rarely met. Even if we have the technology and platform, enforcing the system can be a challenge. A strong willingness from the government is much needed," he said.
According to him, Digital India and smart cities initiatives can be aligned and existing e-governance systems should be modified to be brought under it.
Krishna said public private partnership (PPP) model of executing the projects was the right approach. Under this model, private players will look for profits and so it would be important for the government to provide a clear roadmap and blueprint for the same.
He said one successful case of PPP project was the Passport Seva Kendra, where the government partnered with Tata Consultancy Services (TCS).
"Maybe, the government should replicate the best practices (of the Passport Seva Kendra) so that it is a win-win for the stakeholders," he said.

Deloitte senior director Arindam Guha said the Passport Seva Kendra was commercially viable because of the service charges collected by the government for it.
He, therefore, said it was crucial for the government work out a revenue model that could entice private partners to bring in investments.
 

It's a free world: Netizens win Neutrality battle

 

Wednesday, 15 April 2015 - 7:45am IST | Place: New Delhi | Agency: dna | From the print edition

 

Many times in the past, Netizens have brought the mightiest of the mighty to knees. They did it again on Tuesday. The uproar over the disruption of Net Neutrality, which means non-discriminatory access to all Internet users, forced leading e-commerce firm Flipkart to backtrack from entering into a deal with the largest telecom firm, Bharti Airtel, that would have given the former an edge over its competitors.
The e-commerce company was the first to jump on to Airtel Zero, an open marketing platform that will provide its users mobile apps for free, while recovering the cost from a revenue-sharing deal with app providers.
Airtel also rushed to extend its full support to a non-discriminatory Internet and clearing misconceptions on its marketing platform. "Airtel fully supports the concept of Net Neutrality. There have been some misconceptions about our toll-free data platform – Airtel Zero. It is a not a tariff proposition but an open marketing platform," it said.
It further added that Flipkart's decision not to offer toll-free data service to its customers was consistent with theirs that Airtel Zero was not a tariff proposition.
There was a similar occurrence last year, too, when Airtel had to retrace its step after announcing that it would start charging for Voice over Internet Protocol (VoIP) services like Skype, Line and Viber.
It did so because of the backlash from Internet users. From the whiff of the ongoing debate, India's stand on the issue could well be shadowing the US', where a majority of the Net users favour 100% open Internet.
Telecom minister Ravi Shankar Prasad, while announcing the formation of a six-member panel for Net Neutrality, displayed his inclination towards an unfettered Internet.

Bengaluru-based telecom consultant G Krishna Kumar believes India may go in for a selective Net Neutrality approach or a middle path with adequate checks in place.
"Net Neutrality or not, the hyper competitive landscape in our country will ensure quality will prevail over free access," he said. 

Committee to look into Net Neutrality debate

Tuesday, 14 April 2015 - 7:00am IST | Place: New Delhi | Agency: dna | From the print edition

Praveena Sharma and Krishna Bahirwani

Net Neutrality, which means non-discrimination in providing Net access, has captured the imagination of internet users. And anyone violating it is incurring a backlash so severe that it is putting him on the backfoot.

Despite a few misadventures, telcos including Bharti Airtel, Uninor and Reliance Communications are testing the waters by entering into tie-ups with e-commerce and social networking partners to provide free apps that could prove to be discriminating against other online players and restrict choices for internet consumers.
Telecom Regulatory Authority of India (Trai) has also initiated the process of putting in place guidelines for the Net Neutrality in India after there was a resounding protest against Airtel’s attempt to smother it a month back. It has put a consultation paper on its website and invited public comments and feedback by April 24.
Interestingly, Rajan Mathews, director general of Cellular Operators Association of India (COAI), said in the absence of best global practices, there widespread confusion on the issue.
He, however, said that the representative body of GSM players was all for non-discriminatory use of internet.
G Krishna Kumar, a Bangalore-based telecom professional, had a somewhat different view on the issue. He said India should look at a balanced approach and not blindly imitate the US.
“India certainly needs a clear Net-Neutrality framework, but we need a balanced approach and cannot copy from the US. Even if differential pricing or zero pricing is allowed for certain content, a guaranteed quality of service for accessing internet must be ensured,” he said.
While the US plans a strong Net Neutrality framework, Europe appears to have a contrasting view allowing for preferential treatment.
Krishna Kumar said India had to go for a different model as its market was different with operators getting just one-fifth of the spectrum compared to other countries and was price sensitive. Even in terms of average revenue per user (Arpu), it is less than 10% of the Arpu earned by operators in advanced countries.
Even Sajai Singh of law firm J. Sagar Associates (JSA) believes that the policy makers should not rush into coming out with guidelines without thinking it through.
“Net Neutrality should be thought through before being applied because, in addition to ethical issues, there are basic economic issues involved for the ISP (internet service providers) and any policy or regulation on it should address every interests and aspirations of all stakeholders,” said Sajai Singh of law firm  J. Sagar Associates (JSA).
 

Day 9: Total spectrum bid value remain at over Rs 1 lakh crore

Saturday, 14 March 2015 - 6:30am IST | Place: New Delhi | Agency: dna | From the print edition

On the ninth day of the spectrum auction, the total bid value remained over Rs 1 lakh crore as telecom companies (telcos) went after airwaves in the 800 Mega Hertz (MHz) band as they look to cash in from data consumption explosion projected by internet survey firms.
After 55 rounds of bidding, the government's provisional revenue earning on Friday on allocation of 86% of the 465 MHz spectrum in four bands put on the block was over Rs 1 lakh crore. This figure is very close to the record revenue of Rs 1.06 lakh crore earned by it in 2010.
The auction continued to see furious action in the 800 MHz band for the third day in a row. The demand for airwaves in this band in Andhra Pradesh (AP) circle on Friday saw a huge jump of 15% to Rs 541 crore per block from Rs 471 crore per block a day earlier.
G Krishna Kumar, Bangalore-based telecom consultant, said fierce bidding for airwaves in AP circle could be because it is one to the top five states in the country in terms of GDP and also one of the IT capitals.
Curiously, even Odisha and Madhya Pradesh (MP) saw some intense bidding on Friday with the price per block shooting up by 19% and 10% respectively. In Odisha, it moved up to Rs 22.32 crore per block from Rs 18.75 crore per block and in MP to Rs 266.50 crore per block from Rs 243.90 crore per block.
Spectrum price in Delhi also jumped by around 1% from Rs 885.95 crore per block to Rs 903.74 crore per block. Beside these circles, prices in the rest of 800 MHz band circles seems to have stabilised.
Prices of 900 MHz band spectrum has, more or less, stabilised with marginal price rise in a few circles like Assam, Maharashtra, Northeast and West Bengal circles.
Friday also saw demand for 1,800 MHz with upward price movement in Haryana, Himachal Pradesh, Kolkata and Odisha.
In the 2,100 MHz band, there were no bidder in Mumbai, Delhi and AP circles due to prohibitive reserve price per block in these circles, which was as high as Rs 3,315 crore (Delhi) per block and Rs 3,245 crore (Mumbai) per block. In this band, there was a nominal price rise in Assam, Northeast, Rajasthan and UP (west).
Krishna Kumar said the lacklustre demand for 2,100 MHz could be because only one slot had been put up for sale at very high reserve price. He believes this band could see some spectrum left unsold at the end of the auction. He expects the auction to conclude in a few days.
The auction has eight participants including Bharti, Vodafone, Idea, Uninor, Aircel, Tata Tele, Reliance Communication and Reliance Jio. The government said since there was still some more spectrum left to be sold, the bidding will continue today.
 

Spectrum bidding set to top Rs 1 lakh crore

Monday, 9 March 2015 - 6:30am IST | Place: New Delhi | Agency: dna

Bidding for spectrum by the telecom operators reached Rs 86,000 crore on the fourth day of the auction, surpassing the government's revenue expectation of Rs 82,000 crore, the rate at which the reserve price was fixed in the four bands.
By Saturday, the auction, that began on Wednesday, completed 24 bidding rounds with spectrum in 900 MHz band being most sought after by the telecom companies. In this band, Madhya Pradesh saw aggressive bidding with an increase of 15% from Day 3 to Day 4. Similarly, UP (East) saw the price per block go up from Rs 77 crore to Rs 88 crore, an increase of 17% at the end of the clock round 24.
After three days of lukewarm response in the 800 MHz band, action picked up on Day 4 with some bidders jumping into the fray for blocks in circles like Andhra Pradesh, Gujarat and others. Apparently, bidding in the 800 MHz band was keenly contested. For example, in Mumbai, from Day 3 to Day 4, the price per block went up from Rs 576 crore to Rs 691 crore.
Even in the 1800 MHz band, bidding commenced for blocks in Kolkata and Northeast circles even as demand for 2,100 MHz remained subdued for the fourth day with bidding seen only by three bidders in three circles of Assam, Northeast and Rajasthan. There were no takers for the 1800 MHz in both UP (East) and UP (West).
Analysts believe aggressive bidding by telcos is likely to see their debt levels shoot up considerably. Standard & Poor's (S&P) expects it to jump 18-20% from the current levels. G Krishna Kumar, a Bangalore-based telecom professional estimates the auction to push up the debts of the operators by 30-40%.
He believes Idea could have bid more aggressively as the spectrum that contributes around 70% to its revenues will expire later this year. He feels both Airtel and Vodafone too could fiercely bid for airwaves as roughly 50% of their revenues are tied to the spectrum that are expiring this year.
According to him, the average revenue per minute (ARPM) in India is roughly 35 paisa. "This means after the current auction, the operators will ask subscribers to pay at least 15% more," estimates Krishna Kumar.
He said India had to do lot of catching up in the data service segment, where huge potential still remains untapped. "Data usage per customer in India is roughly 60 megabytes (MB) per month while it is 700MB in the US. It is expected to touch 2 gigabyte (GB) by 2017, thanks to 4G. There is a big catch-up to be done in India," he said.
The government has put up 465 MHz of airwaves on the block for sale in four bands including 800 MHz, 900 MHz, 1,800 MHz and 2,100 MHz. In all, eight telcos are taking part in the bidding constituting Bharti Airtel, Vodafone, Idea, Tata Tele, Uninor, Reliance Jio, Reliance Communication and Aircel.
A large quantum of spectrum put up for auction are currently being held by Airtel, Vodafone, Idea Cellular and Reliance Telecom. While their licences are set to expire in 2015-16, Idea's nine, Airtel's six and seven each of Vodafone and Reliance Telecom are coming up for renewal. The government had raked in Rs 62,162 crore from the last spectrum auction held in February 2014.

Spectrum auction kicks off with a bang; bidding tops Rs 60,000 crore

Thursday, 5 March 2015 - 6:10am IST | Place: New Delhi | Agency: dna | From the print edition

The latest round of spectrum auction in four bands kicked off with a bang on Wednesday with the first day bidding crossing a whopping Rs 60,000 crore. Aggressive bidding was seen in the 900 megahertz (MHz) band.
"Going by the quotations on the first day the response was better than expected," telecom secretary, Rakesh Garg said.
"It (the first day of the auction) went off well with the bidding already reaching Rs 60,000 crore. There was aggressive bidding in the 900 MHz band, which is fast spreading to 1800 MHz and 2100 MHz. The bidding for 800 MHz airwaves was also good," he said.
The auction saw eight companies participating in the bidding with 385.75 megahertz (MHz) of telecom spectrum in four bands put on the block. These were Bharti, Vodafone, Idea, Aircel, Tata Tele, Reliance Communications, Reliance Jio and Telewings, who have deposited a total of Rs 20,435 crore earnest money.
The high collection of earnest deposit was itself an indication of aggressive bidding. The total airwaves up for bidding include 103.75 MHz in the 800 MHz band, 177.8 MHz in 900 MHz band, 99.2 MHz in 1,800 MHz band and 5 MHz in 2,100 MHz band.
G Krishna Kumar, a telecom professional from Bangalore, said aggressive bidding for airwaves will further hit the already stretched balance sheets of telecom companies and will push up tariff as increased costs will be passed on to the consumers.
He said that with subscriber base for most telcos' voice services already having topped, they will chase subscribers for data services, where a huge potential still remained untapped.
"Going forward, data is going to be their priority. They will have to be clever in providing their data-plans in a way that there is growth in the segment," he said.
The initial estimates of revenues, based on the reserve prices set by the government, to be earned by the government from selling the airwaves in different bands have been pegged at Rs 80,000 crore to Rs 1 lakh crore.
This is the highest ever revenue collected in any auction till now and will help the current government to easily meet its fiscal deficit target of 4.1% of the GDP in this fiscal. In the last auction, which was held in February last year, the government raked in Rs 62,162 crore.
The auction is expected to carry on for several weeks, including Thursday, which is a public holiday. In the past too, bidding for spectrum has lasted for longs hours for weeks.
At the outset, the latest round of the auction was expected to be of fierce bidding with incumbents Bharti and Vodafone trying to garner as much spectrum as possible to keep their lead in the voice services market and expand the data services segment. Mukesh Ambani's Reliance Communications, which is yet to launch its services, is expected to up the competitive heat by going aggressively after more airwaves to take on established players.
Many of the telcos' licences will be coming up for renewal in 2015-16. These include nine of Idea, six of Airtel and seven each of Vodafone and Reliance.
Abiding the court order, this time the government will not be releasing information on individual companies or the winners of spectrum until the end of the auction.

Eight telcos to bid for spectrum, Videocon, Sistema opts out

Eight telcos to bid for spectrum, Videocon, Sistema opts out
Tuesday, 17 February 2015 - 6:20am IST | Place: New Delhi | Agency: dna | From the print edition

• The spectrum of March 4 envinced active interest with eight of the 10 private telecom operators having submitted their applications on Monday, the last date for expressing intent.

  The spectrum of March 4 envinced active interest with eight of the 10 private telecom operators having submitted their applications on Monday, the last date for expressing intent.
  The auction will generate revenues close to around Rs 80,000 crore for the government which will help meeting its fiscal deficit target of 4.1% of the GDP.
  All major players including Airtel, Vodafone, Idea, RCom, Reliance Jio, Uninor, Aircel and Tata Teleservices have submitted their forms. Sistema Shyam Teleservices Ltd (SSTL) and Videocon, however, have decided to opt out of it.
  The combined market share of the two players would be less than 2% of the total mobile services market.
  G Krishna Kumar, telecom professional based in Bangalore, said their absence in the auction would not be of much consequence.
  "While, ideally, we would expect all the existing providers to participate in the auction process, it is perfectly fine for a few to drop out. In the current scenario, Videocon and Sistema together account for only about 1.5% of the wireless subscribers in the country," he said,
  SSTL, which operates its services in the 800 megahertz (MHz) band, has decided to keep out of bidding because of steep reserve price fixed and its pending complaint against Department of Telecom (DoT) with the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) for making the spectrum allocated to it in the 2013 auction contiguous.
  "SSTL has consistently maintained that the pricing of 800 MHz spectrum at Rs 3646 crore per MHz, is way out of line and does not merit a strong business case for buying additional spectrum. The company continues to maintain that such pricing does not take into account the realities of the prevailing ecosystem within the band," said the statement issued by the company.
  The company currently holds 3.75 MHz spectrum in nine circles including Delhi, Rajasthan, Gujarat, Karnataka, Kerala, Tamil Nadu, Uttar Pradesh (west), West Bengal and Kolkata. A company spokesperson said the company was waiting for the issue of non-contiguous spectrum to be resolved in TDSAT, whose next hearing was on February 18.
  In the auction held in 2013, SSTL was the only bidder for the CDMA spectrum.
  "Since SSTL was the sole bidder during the said (2013) auction and there is no other successful operator for rearrangement of frequencies, it is incumbent upon DoT to rearrange/reassign the frequency to make the spectrum allotted to SSTL contiguous," it noted in its statement.
  The government is offering 385.75 MHz spectrum in four bands including 800, 900, 1800 and 2100.
  Airtel, Vodafone, Idea Cellular and Reliance Telecom, whose licenses will be expiring in the current fiscal, are expected to be aggressively bidding for spectrum to win it back

Online stores under DoT scanner

Some online adult toys and  adult lifestyle stores have come under the scanner of the Department of Telecom (DoT), which wants to regulate such webstores under section 67, 67A and 67B of the Information Technology (IT) Act, 2008 for "selling and promoting alleged objectionable products illegally".
A telecom department note mentions online stores like flipkart, Imbesharam.com, thatspersonal.com and OhMySecret.com, which, it feels, are violating rules under the IT Act.
It also refers the names of the CEOs of these portal including Sachin Bansal (flipkart), Raj Armani (IMbesharam), Samir Saraiya (thatspersonal.com) and Vinodh Reddy (OhMySecrets.com).
There are "few online selling websites, which are openly promoting and selling alleged objectionable products illegally," says the note referring to these websites.
The DoT said this was brought to its notice through a letter from the ministry of information and broadcasting and a complaint by one Harit Kumar to the Delhi police, alleging objectionable content being shown on websites.
The other two portals are also explicitly adult stores but it is not clear why flipkart has been mentioned along with them. None of the CEOs were available for comments.
G Krishna Kumar, an IT professional from Bengaluru, said they could have come to the government's notice as they don't have checks and balances that such sites require for their access.
He said measures such as giving access to only those who register their age as 18 years and above would probably satisfy the regulating agencies.
"For adult content sites, it must be mandatory to have a login (assuming that the individual will provide the correct details). It finally depends on how truthful the individual is," said Krishna Kumar.
Incidentally, Facebook requires a person creating a login ID to be at least 13 years old while Google has age requirements as defined by individual countries. Youtube, for example, displays a warning screen when adult content appears, saying "only users who are 18 or older can watch it".

Is your mobile certified for SAR radiation?

Sunday, 11 January 2015 - 7:20am IST | Place: New Delhi | Agency: dna

A letter written by India's only authorised lab and certifier of specified absorption rate (SAR) of radiation in a mobile handset to the customs chief in New Delhi brings out rampant misuse and violation of government rules on the same.
Bharat B Jain, chief executive officer (CEO) of BNNSPEAG Test and Calibration Laboratory India Pvt Ltd, told dna he has come across some instances of fake SAR conformance certificates being issued by a Delhi-based entity AB Mobile Standards India Pvt Ltd and has brought it to the notice of the customs.
"This forging of SAR compliance certificate is not only causing a revenue loss to the test lab but also resulting in unchecked mobile phone radiation to general public," Jain wrote in his letter to the Commissioner of Customs Bhushan Kumar Bansal.
What has surprised Jain is that the customs has cleared mobile handsets imports on production of these forged documents. As evidence, he has provided a copy of SAR conformance certificate issued to Maxx MobilE Communications Limited's MX425e model by AB Mobile. The model was made manufactured by United Creation Technology Co Ltd.
"It has come to our notice that under-mentioned organisation (AB Mobile Standards India Pvt Ltd) is giving forged SAR certificates to various mobile manufacturers and importers, who are submitting these to customs for clearance of these phone by illegally using ILAC (International Lab Accreditation) symbol," he states in the letter.
And while Jain is still awaiting response from the customs authority, ILAC – the international body of which his company is a signatory – has already addressed his concerns.
An e-mail sent to him by Sharon Kelly of ILAC has verified that AB Mobile was not an ILAC signatory.
"AB Mobile Standards India is not authorised to use the ILAC MRA Mark as shown on the SAR conformance certificate provided (to us)," she wrote to Jain.
ILAC, which is a global mobile testing and certification body, has taken the matter further and will be carrying out a probe to check whether testing by AB Mobile was done at an accredited laboratory.
"However, this would need to be confirmed with AB Mobile Standards and CNAS (China National Accreditation Service for Conformity Assessment), the accreditation body in China that is a signatory to the ILAC MRA because the conformance certificate indicates the laboratory used was based in China," she assured Jain in her email.
ILAC has said it will use the evidence given by Jain to contact AB Mobile Standards and advise them against inappropriate use of the ILAC MRA Mark.
G Krishna Kumar, telecom professional from Bangalore, said even though India has set guidelines on acceptable SAR level for mobile phones sold in the country, its implementation was a challenge.
"It is worthwhile to note that SAR value by itself does not guarantee that the phone is safe to be used continuously for hours. Data suggests that a SAR value of 1.6 W/kg (watt per kilogram) means that the phone can safely be used for about 18-20 minutes of continuous talking (with phone held against the ear) in a day," he said.
According to him, the government or the phone makers or the telcos needs to educate general public on these aspects.
He said the government should mandate the over 150 mobile phone makers to provide the radiation details for all phone models launched in India over the last one year. "This should be available both online and in all the retail outlets," said Krishna Kumar.

Companies need to have Rs 100 crore net worth to participate in airwave auction

Monday, 5 January 2015 - 7:10am IST | Place: New Delhi | Agency: dna
Praveena Sharma

Aircel and Tata Teleservices Ltd (TTL) may find it challenging to bid for airwaves in the coming auction with the inter-ministerial committee (IMC) on spectrum auction reiterating its decision on net worth eligibility of bidders.
The committee has retained its earlier decision, where it had made it clear that only those with net worth of over Rs 100 crore, irrespective of whether they were holding spectrum or license or were new entrants in a band or a circle, could participate in the upcoming airwave auction. For the North East region and J&K service area, the net worth requirement for companies has been fixed at Rs 50 crore.
The telecom panel is of the view that strong balance sheets of those bidding for airwaves would ensure efficient roll out of quality telecom services.

Bengaluru-based telecom professional G Krishna Kumar said while IMC was justified in wanting to invite financially strong players, it should have also taken into consideration how the current competitive market had eroded the net worth of many of them.

"The criteria of having companies with healthy balance sheets to participate is good as it can help in maintaining requisite quality of service. However, due to the highly competitive market, telecom companies have paid exorbitant prices," he said.

Citing example of state-owned telecom company BSNL, he said positive net worth wasn't always necessarily an assurance on quality of service; "BSNL has positive net worth but their quality of service has been wanting".

Kumar said to make the telecom sector healthier, the government needed to address the areas: One, to make available more spectrum and two, reduce the intense of competition that currently exists in the market. "There has to be more spectrum availability. Currently, Indian telcos have less than 20% spectrum compared to their peers in other country. Secondly, we still have 8-12 players in each circle. I think government needs to help with easy M&A (merger and acquisition) guidelines, which will help the overall industry and also the general public," said Kumar.
A note on the minutes of IMC meeting, held late last month, says the committee had decided to hold on to its earlier view on the net worth as it felt lower availability of funds with a bidder would lower its capacity to raise funds, which in turn could hamper smooth running of its operation, expansion plans and quality of service.
It also felt that it was in line with the existing principle related to net worth requirement in the Unified License conditions for authorisation of additional services. However, it has clarified that the criteria did not "preclude" bidders with negative net worth: "Bidders have option of getting the net worth of such promoters of the company counted for participation in the auction for allotment of spectrum, who have directly in their name at least 10% equity share in the total equity of the company".
One of the reasons put forth by the panel was that in view of the government's Digital India initiative it was crucial to ensure the financial strength of bidder for faster roll out of services. Kumar said Digital India was already gaining traction with reports suggesting that there will be 10-15 million 4G (fourth generation) subscribers in India by next year.

Government begins net policing, orders blocking of 32 websites

Thursday, 1 January 2015 - 7:30am IST | Place: New Delhi | Agency: dna

The latest to come under its scanner are 32 websites, which have been ordered by the department of information technology to be blocked under Section 69A of the Information Technology (IT) Act, 2000 and the IT (Procedure and safeguards for blocking of access of information by public) Rules, 2009.
Arvind Gupta, the head of Bharatiya Janata Party’s national IT cell, tweeted that these sites on the Net, including vimeo, github, sourceforge and others, have been found carrying “objectionable content” and so directed to be blocked by the Anti-Terrorism Squad (ATS) on security grounds.

An IT department’s note sent out to the Internet Service Providers (ISPs) orders them to “immediately block the access” to all 32 URLs.
Its dictate is reminiscence of the previous government’s similar move where it blocked over 200 websites in a day last year. It led to massive outcry against “censorship of the Internet” and resulted in the UPA government backtracking on it.
Though, after the Bangalore incident, the sentiment on the Net governance is different today.
Som Mittal, former president of IT lobby body National Association of Software and Services Companies (NASSCOM), believes Internet needs to be governed to a certain extend if it is being used for “unintended purposes”.
“You saw what happened recently on the Twitter (referring to Bangalore case). Internet is a powerful (internet) tool and can be misused to spread sentiments that could be harmful for impressionable users. We should censor only when the freedom (on the Net) is misused (for such purposes). The government should then step in,” he said.
However, he feels that what happened in China during the Hong Kong protest was “clearly censorship”. “What we are advocating is self-governance of the Net,” said the former Nasscom chief.
G Krishna Kumar, a senior IT professional based in Bangalore, is also of the view that government has all the right to block websites. 
“In fact, countries like US, Germany and Japan have clear Internet censorship guidelines. India is much better than China where thousands of websites are blocked including most popular ones like Facebook, Youtube, etc,” he said.
In the current context of blocking 32 websites, however, he said it was not clear why websites like github or sourceforge, which are sites meant for open source based collaborative software development, have been blocked. 
“Instead of blocking a website, can the government enforce strict checks and balances to these website or content providers so that only specific accounts can be blocked?” asked Krishna.
 

Telcos eye 117 MHz of idle spectrum from defense, broadcasters, BSNL

Thursday, 6 November 2014 - 6:10am IST | Place: New Delhi | Agency: DNA

Faced with severe crunched for spectrum, telecom operators are eyeing close to 116.5 megahertz (MHz) airwaves held by the defense sector, broadcasters and state-owned BSNL to expand their network and improve the quality of their service.
These spectrum, which are in the 2,100 MHz, 900 MHz, 700 MHz and 800 MHz bands, have been lying idle with their present owners or will be rendered idle once they shift to new technology.
Rajan Mathew, director general of Cellular Operators Association of India (COAI), said while telecom companies were struggling to maintain and improve the quality of their service with the current quantity of spectrum available with them, there were many who were sitting on spectrum that are not being utilised.
"There is ample spectrum that can be freed but nobody is ready to vacate. There is a need to look at whether there was a way to reconfigure their (those agencies where airwaves are lying idle) holding for optimal use and globally harmonise the frequencies," he said.
According to him, defense had close to 15MHz in the 2,100 MHz that could be vacated while another 100 MHz in the 700 MHz could be freed from broadcasting firms which were moving to digitisation and 1.5 MHz of unused spectrum in the 900 MHz could come from BSNL.
The Telecom Regulatory Authority of India (TRAI) has also recommended in its report submitted to the Department of Telecom to free up idle spectrum for the commercial usage by telecom service providers from these sectors.
Individual operators in India gets allocated roughly 15-20% of spectrum compared with that allocated to their peers in advanced countries. India has about 265MHz of spectrum across all the bands, while the US, Europe and Brazil have between 450 to 600 MHz allocated. In the 1800 MHz, Europe has at least 2 to 2.5 times more spectrum allocated compared to India.
G Krishna Kumar, vice president in the Mobile and Connected Devices Division at Bangalore-based Symphony Teleca, said better spectrum availability with telecom operators will improve the quality of service that can be offered to the consumers. Simply put, it would mean there would be lesser call drops and better internet connection.
He believes the government would do well to consider the License Shared Access ( LSA) technology that helps in efficient use of unused spectrum between license holders. This system has already been piloted in Europe.