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| Saturday, August 29, 2009 |
| National Security - Avoid Chinese equipments says DoT |
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Citing national security concerns, the Department of Telecommunications (DoT) has strictly directed private players not to use Chinese equipments in 20 out of the 29 states, in a move to ward off Chinese equipment manufacturers from Indian market.
DoT, after a meeting with private operators, has directed the private players to avoid using Chinese equipments. However, the companies are arguing that the move will increase the price of equipment as the Chinese are cost effective and completely avoiding them would lead to a monopoly of European vendors.
New entrants in GSM mobile telephony, including Reliance Communications, Unitech Wireless, Aircel and Datacom are using Chinese equipment. There are apprehensions of European vendors that have tied up long-term contracts with Airtel and Vodafone, making a monopolist clout in the market. The cost effective supply of equipments by Chinese have made them favorite as two Chinese vendors, Huawei Technologies and ZTE, have appropriated nearly 20% of the $7-8 billion-a-year market.
Huawei Technologies and ZTE are clearly disappointed by DoT's move and contend that their business has nothing to do with security concerns. They have also said if they are separated from Indian business, project costs of operators will go up by 40-50%. |
Published on Saturday, August 29, 2009 at 11:05 AM  |
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| Thursday, August 27, 2009 |
| Revenue Marktshare - Airtel Vodafone Lead - RCom Arrests The Fall |
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Revenue market share of Wireless companies in India proves that, Indians are most likely to opt for a GSM connection than a CDMA. RCom's CDMA and Tata Indicom CDMA have been consistently losing Revenue market share. However, with th launch of Reliance GSM Mobile, the company has been able to achieve a turnaround of 150 bps higher revenue market share for the quarter ending June-09. [According to RCom data and not TRAI]
Airtel and Vodafone are still leading without seeing any effect on their revenue market share. Bharti Airtel's revenue share at 31% has remained broadly stable in the past four quarters with no material impact from new launches. At the individual circle level too where Bharti has dominant share.
Idea & Vodafone have both improved rev share by 110-140bps in the past year from new launches & sustaining leadership share in incumbent circles.
BSNL and Tata Tele, where rev market share has declined 120-130bps in the past 12 months. BSNL might continue losing given capacity issues whereas Tata should reverse the losing trend with the recent traction Tata DoCoMo GSM launch. |
| Published on Thursday, August 27, 2009 at 8:38 AM |
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| Wednesday, August 19, 2009 |
| Tata DoCoMo Gaining Traction - Reality Check on the Street |
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Tata DoCoMO launched its GSM service in Mumbai this month with heavy ad spend (print media/hoardings) focusing mainly on per second billing. Tata DoCoMo's offer of 1p/sec is an ongoing plan and not an introductory offer. We visited some of its retail outlets in Mumbai to gauge the response, took a SIM card and used the service to get a sense of the coverage/quality of network.
Waiing time at outlet was close to an hour though activation was immediate, far quicker than what we experienced during recent similar launches. The outlets had run out of recharge coupons. Coverage across major roads in Mumbai is relatively good with limited call drops, although this may also be due to the congestion free network. Coverage in some areas is limited / no coverage, although this is normal for a new network.
Subscribers with the maximum frequency of <1min duration calls will stand to gain the most and its utility reduces as call duration increases. Finally, our view is that the initial appeal of the tariffs, if combined well with deep coverage, this could force a reaction from the arrogant incumbents like Airtel. |
| Published on Wednesday, August 19, 2009 at 10:06 AM |
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| Saturday, August 15, 2009 |
| Airtel Special 5 - A Great Gimmick |
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It appears that Bharti Airtel is facing stiff competition from new GSM operators and of course state owned BSNL which has the best plans for heavy mobile phone users. Airtel is banking on a Great marketing gimmick of Special Five. The catch in this Special 5 is all the 5 numbers have to be Airtel mobile numbers. Wait a minute, hasn't Reliance offering such plans for the past 3 years ? In conference call, RCom executives claimed that they are the ones who launch innovative tariff plans first and the rest of the industry follows and this now sounds true.
As far as quality of service goes, all the operators are the probably the same. Our insiders tell that Reliance is planning a big nationwide Wireless disruptive tariff launch as soon as they get a green signal from their network architects about its efficiency and optimization which the company has undertaken and is spending on CAPEX only at those places.
Update:
Here is what JP Morgan had to say in a report on Wireless India,
...incumbents (Bharti/Vodafone) are trying to counter the per-second billing offer from Tata Docomo by offering lower on-net call rates (Rs. 0.20/min) for up to 5 mobile numbers. However, re-sellers indicated that the pickup of this scheme has been limited due to high rentals (Rs 75/month). Further, local/STD tariffs have settled down to Rs0.60/Rs1.0 per min (through bonus cards worth Rs25-45 per month), lower than the earlier base tariffs of Rs1.0/Rs1.50 per min. |
| Published on Saturday, August 15, 2009 at 3:53 PM |
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| Wednesday, August 12, 2009 |
| BSNL CellOne Adds 1.62 mn customers in July - Turnaround ? |
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BSNL CellOne has added 1.62 mn customers in July-09 up 81% MoM from 897,000 in June-09. BSNL used to be the Wireless and Wireline market leader 2 years ago but the company lost to competitors due to Political interference. However,with increasing criticism from Indian public and the need to take the company Public, BSNL is now working to be back on track.
GSM operators reported 9.9m (estimate) net-adds in July vs. 9.3m in June taking the total number of GSM Wireless subscribers to 326 mn.
Vodafone's net-adds continue to taper off (2.2m in July), after hitting a peak of 2.86m in March, driven by start of operations in 7 new circles. We forecast 2m subs/month for Vodafone in FY10.
Bharti - steady as a rock. At the current rate of net-adds (2.8m in July), Bharti would exceed Mar-10 forecast (122m) by 1.3%.
Aircel net-adds jump 17% mom, and reach highest ever at 1.3m. It's average monthly net-adds in FY09 were 0.6m. The recent surge in its net-adds is partly driven by launch in 8 new circles in 1HCY09
Idea reported 1.4m netadds in July vs. 1.6m in June. Its net-adds in five established circles (Mah, Guj, AP, MP and Kerala) slipped by 0.55m mom |
| Published on Wednesday, August 12, 2009 at 10:33 AM |
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| Saturday, August 08, 2009 |
| MTNL's 3G Failure - Value Destructive |
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MTNL has had so far on its 3G platform and the poor subscriber mix of the company. We agree that driving ARPU is the only available recourse in saturated metros, but in our view, the subscriber mix at MTNL is not suitable for 3G services and provides limited possibilities for ARPU improvement.
MTNL is in the process of inviting bids from global telcos to run its 3G operations in Delhi and Mumbai on a franchise basis for a 10 year period ; a clear acknowledgment of its poor execution capabilities in our view. 3G services require a segmented approach and close analysis of consumer behavior along with product innovation.
It makes no business sense for MTNL to match the highest bid for 3G spectrum auctions and incur capex to upgrade its network. MTNL is better placed to leverage its fixed line infrastructure for wireline broadband products. We believe metros have latent demand for high speed broadband. |
| Published on Saturday, August 08, 2009 at 10:14 AM |
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