Who Is Responsible For Reliance Communication Current Situation

Just like a fairy tale story once upon a time…. in 2004 -2005 era Reliance communication was the darling of every user in India. Wow, then what happened; Reliance communications business came to younger son of Respectable DB Ambani and he changed the track of the company direction. Reliance was instrumental in bringing devices to common hand and thought that once user will get habitual like alcohol then start charging end user. As a smart user, once user stopped getting the free talk time they moved to other service provider without closing the existing connection. That led to detoriation of HLR vs. VLR active user % and also impacted the ARPU.

It is really interesting to observe that Reliance communications selected CDMA just opposite of majority of other player and in turn lack of fashionable devices and it also helped competitor to snatch the remaining user base. The growth rate of Reliance Communication landed at the lower end as they invested in domain like undersea cable to data center where the business is capex intensive but global downturn as well as offering of better value proposition based cloud based solution blocked Reliance Communications path to prosperity.

In most recent quarterly report, the user Base came down to 102 mn andARPU is one of the lowest among peers. They claim to have 34 million plus data user Base and generating one of the lowest again.

In order to reestablish itself, they merged with MTS brand ownerwhere Reliance communications will still hold 90%, on the other side they are talking with Aircel another Indian service provider reeling under huge debt plus failed to attract high ARPU userbase.

I am following Reliance communications for the last 3.5 yearand every year they come up with one or another punch line that they are going to sell their tower business and they are in discussions  including exclusive discussion  but unfortunately the tiered investor all the time keep on waiting.

Six months back they announced that they are on the verge and equity price got the bump upwards and now they are saying that it will be done post Aircel deal. How they can claim that it will be done post Aircel deal when Aircel deal discussion just got extended.

In my point of view, that equity investor will not buy the point that what is your EBITA and concern regarding serving of debt but they actually want them to see tower and other non profitable business to reduce the interest cost and in turn increase the earning per share.

The current state of Reliance Communications foundation happened on the day they started giving subsidized device with Reliance communications connection.

Now they are doing another mistake of forcing more than 6 mn to port to their new network otherwise they are disconnecting the service. I am sure it is not going to help them as well as take them anywhere.

It's a strategy of Reliance communications to stream line the business and then get acquired or merged with Reliance Jio. We should not forget that how Reliance Jio entered into it indirectly.

What Prompted UK to Go for Referendum to be Part of Euro Zone - Impact Analysis

In 1999, European countries led by leading country like Germany, France, UK convinced smaller countries to be part of European Union with common currency to create the super market area with free flow of one country citizen into another to increase better understanding of culture. In the beginning itself many country adopted common European Union Currency but many like Denmark, UK and few others kept them self away from adopting common currency.

European Union decided to keep the administration center at Brussels and down the line managed to tag in most of first lot of 27 countries. In order to create economic zone and with a agenda to attract CIS countries also they also allowed Soviet dominated countries in Euro Zone and supported them with billions of Euros on their infrastructure to bring to the same level.

Its a saying that when all good then all tries to take the credit and that what exactly happened. It was clear that Brussels headquarter got dominated by Germany, France and Belgium whereas UK were treated like supporting partner.

The Financial crisis in Greece, Portugal and Spain first showed the differences within different group of countries within EU.

The crisis led European Union into recession and rich countries were liable to keep funding reckless countries which failed to put a tab on their pension to expenditure.

Then came the influx of skilled and semi skilled labor in rich countries for better future also impacted the job prospect of locals.

In my point of view, I was expecting UK step for the last five years given their political commentary

UK always used to be in the mind set of leading the European point of view on the world forum found its self isolated. Most of the major decisions were moved from UK to Germany and its partner. UK opposition received golden chance to press the parliament to go for referendum post terrorist attack in France followed by in Brussels by inflicting the fear factor among UK citizen.

The impact of UK exit from Euro zone will have double sword attack across European Union attach counties. Already reeling under recession, Euro Zone will go further into recession and more importantly the creditability of Euro currency will get dented whereas UK will have to reestablish the diplomatically and commercial contact again. In my point of view, UK currency will also get the hit in the first few quarter whereas the maximum gainer will be US $ and can showcase that US $ is the only alternative to trade which Euro attempted to break when may Middle East counties started demanding payment in Euro's.

The biggest beneficiary of Politico- commercial disruption will go in Russia favor and they will have upper talking point with CIS countries to be associated with Russia for Trade and Russia and other CIS countries may open their market completely for UK given recent tension among EU and Russia over Ukraine.

In my point of view, UK will decide to move out of EU and the reason will be security and on the commercial side, Gold will fly upwards like never before.

Transition Required Worldwide - United Bombing Center To World Food Center

 Post World War 2, all countries decided to create an environment where people can leave peacefully. The atom bomb on two cities of Japan showed the whole world the destruction impact on humans and its generation. Post war two group got created and that led to cold war between USA and Soviet Union which again landed as in a situation of 3rd world war.

At one side, developed countries were busy in showing their strength and spent billions whereas many countries in the absence of support from developed countries turned into economical and cultural trouble.

The fight of dominance also brought the best of Technology in all domain and started changing the human life. Developed countries captured United Nation indirectly and started dictating the world. Most interesting act was the security council. I failed to understand the inclusion of UK and France and the veto power to china and USA.

Some time I feel that United Nation lost its relevance by now. The emergence of Soviet Invasion in Afghanistan and USA support to local to fight Soviets started the terrorist culture and many terrorist group which received unlimited funding.

Now, the learning we provided is turning the world into United bombing center and now no one guarantee where and when bomb will fly.

At the same time many countries are reeling under drought and people are suffering from Hunger. Children's are dying but we are dropping bomb and developing cutting edge destructive ammunition.

Can't we all which include all counties come to common platform and agree upon that whatever ammunition we are developing and the budget we allocated, we will deduct that by half and will help poor countries where really the need of food is there will be taken care off. Many countries sells Food grains and make foreign currency. Cant we just agree that we will give the same to people who needs to fill their stomach.

It's surprising that we are throwing Trillions of $ in arms but cant spend or give away Billions for human beings. Let's make our society as United Food center.

It's my personal view.

Microsoft Acquisition Of Linkedin - Direct Acquisition Of Creamy Layer User's

Few days back, I wrote an article titled "LinkedIn as undisputed king of Professional world" Came true as Microsoft took a bold step to acquire LinkedIn with phenomenal 49% premium to their current share price. I was reading article floating here and there that Microsoft paid extra for the LinkedIn and is it possible for them to recoup their Investment and RoI. Many analyst started talking about Microsoft failed acquisition in the past and I can understand that its always easy to find out the negative approach in any acquisition.

My take on the acquisition are as follows:

It clearly indicate that US based companies are getting confident about the US economy and M&A is on the rise. The case is also supported with another tech acquisition of Blue Coat by Symantec.

When Facebook paid huge premium to Whatsapp then every appreciated because that it was having userbase at the same level as LinkedIn is having without any monetization plan. My query to all that, Why Facebook paid $19 Plus billion for Whatsapp. We don't have an answer but they played with the user usages pattern and accordingly populate the advertisement on user facebook to make more money through advertisement. We all observed huge growth in Facebook advertisement business and infact without advertisement revenue Facebook is nothing.

Google attempted to suppress most of the organization through their Android ecosystem and made it mandatory to have 30 different type of Google services and making Billions of $ in revenue as well as imposed their browser too. They are also using BI and AI to populate advertisement platform and we all know the size of their advertisement business.

The most interesting move of Microsoft is their tactical business move to cloud and mobility based focused on dynamic service. We must agree that their Skype acquisition started showing positive result and millions of users are getting attracted towards the robust service. Recently, I observed that they started monetizing Skype through advertisement business and very soon it will be major contributor to their overall revenue with very high EBITA.

The acquisition of LinkedIn with 440 Million plus userbase, around $4Bn Revenue with positive operating cash flow will enable Microsoft to make the organization profitable quickly through synergy.

The competitor of  Microsoft in the B2C segment should be ready to face the new unmatched product with Skype attached LinkedIn Service and It may Challenge YouTube in the field of professional world.

LinkedIn additional assets SlideShare can be additional assets for Microsoft to integrate with their Window operating system or convert it as another product MS office Suite.

Regarding the offer price, based on the result, LinkedIn balance sheet is having $3.2 billion of cash and marketable securities and acquisition is inclusive of cash means the actual payout is around $23 Billion. 

In my point of view, Microsoft will come out very fast with multiple Product line which will have Skype plus LinkedIn and one should not be surprised that it goes mobile in big way

Worldwide Telecom Regulatory Body Should Consider Charging Spectrum Fee Linked With User ARPU

We all are aware that Spectrum is one of the most precious assets of any country and regulatory body faces uphill task to manage the balance within different segment of Industry and most importantly defence sector.

We are also well aware that the auction of 3G spectrum in Europe triggered Telecom initiated global recession in 2001 to 2004 wherein many Telecom service providers put in multibillion $ bet in auction with a view that data centric products and services will fly off without any problem. Unfortunately, the limitation of 3G supported devices, concern around device battery, and lack of coverage delayed the maturity time from 5 years to 10 years. On a contrary, Japan, South Korea, USA, and China succeeded in adopting it and user responded back with higher adoption.

Given the successful adoption of Technology and growth, many countries only adopt the procedure without digging down deep to understand geo political condition. None of the Telecom Networks run by any service providers cannot be successful without the maturity of ecosystem which is combination of services, platform and Applications as it is the building blocks of Telecom service provider revenue stream other than voice services.

For Example, China government control Telecom services through three entities and ensure that Telecom service providers are supported in all way. That is one of the reason that the implementation of home grown 3G and 4G standard being adopted by even global equipment supplier to ensure that they capture most lucrative market.

If we look at the APRU both on Voice and Data, I want to keep it to abstract level and want to mention Japan, USA, South Korea, China, Germany, Switzerland, UK as some of the countries where ARPU is generating high APRU on both voice and data front. One of the major reason of the same is the voice an data package bundled with device which help user to shell out minimum to acquire data centric service. While package gets over and user device gets unlocked by the Telecom service provider; user understand the true value of offered services and subscription success rate achieve higher percentage.

On a contrary, Developing and nascent stage countries trying to connect their citizen with telecom services identified it as an opportunity to raise funds for the government without analyzing the cascading impact on overall economy. India is one of the unique examples of the same. With every auction of spectrum, the regulatory body raised the base price per Mz and focused on the number of user instead of APRU generated by each user. It shocking to know that even African countries where Airtel is offering their service generating higher ARPU than India both on the voice and data side. In that scenario why we call African countries poor countries.  I failed to understand the higher base price for the spectrum. If regulatory body is so confident about the Telecom growth then I challenge Indian regulators to put their skin in the game and offer free spectrum to Telecom service provider and be a partner of all Telecom service provider. In my point of view, the developed countries based regulators should consider giving free spectrum and they should take the path of revenue share to ensure recurring revenue for the government.

In the current form of Government policy of auctioning spectrum plus charging hefty direct and indirect taxes on the Telecom service provider which is landing Telecom service provider into debt and it's not far away that they will crumble into another segment with higher NPA. Most interesting post auctioning the spectrum regulators should not interfere the voice and data pricing as it is contracting to their statement that spectrum auction is on the basis of market discovery.

In my point of view, Regulator should recommend the Government of different demographics to be part of the ecosystem and enjoy the growth as well as they should burn their fingers if losses popup. It will release higher free cash flow for the Telecom service provider which in turn will get circulated within ecosystem and will have huge driver for the continuous growth irrespective minor hurdles

Reader’s feedback will be highly appreciable.

News Aggregator Application Entry into India -Indian News Application Publisher shooting itself

The growth of Android and iOS mobile operating system based Smartphone coupled with high speed network attracted many players. One of them are news centric companies in order to grab more market share & reaching out to millions. It bypassed their previous limitation of global, regional or local level based on their dominance.

At the same time, the open source Android ecosystem and higher agility offering to user through mobility device forced many established player's to reduce their reliance on print segment and started adopting the mobile centric offering of news.

The dynamically Android provisioning mechanism of news feeds to user received very good reception by end user and the adoption of news applications were flooded in the market place. Many leading newspaper captured existing and new user which in-turned acted as inventory to promote third party application or generate advertisement revenue as the time spent by an active user is at higher end of the ecosystem.

The higher monetization potential in the news segment attracted many players who struggled to monetization of their application even after having 2 to 3 Mn DAU (Daily Active User) base.

In the absence of monetization & Stickiness, most of the companies reached out to blogger community to news paper application providers to get their feeds so that non performing application on the monetization part start generating revenue whereas News Applications provider thought that they will get the traffic and offered their feeds to news aggregator applications provider or third party applications provider with different content.

I want to remind News Application providers that they have spent Multibillion $ to acquire user and what was the need of that if at the end they decided to give their news feed to others. Why user will keep 10 apps of new but will prefer to have aggregator one.

In my point of view, its shooting on your feet All the best to such News Companies offering feeds to 3rd party.