Indian Wireless Service Providers Are Trying To Ride On OTT Player’s Success

Once termed as most promising sector for investment, Indian Wireless Sector is currently reeling under tremendous pressure to revive their business. The voice centric users are shying away from mobility service provider MVAS due to multiple reason and at the same time increasingly using mobility service provider network for data. The increasing usage of data is limited to web surfing especially social networking sites. Indian mobility service providers are still struggling in attracting more users willing to pay for applications instead users are using Google Play or Apple Store to download free applications.

In order to differentiate their value added service play, most of the mobility service providers are collaborating with big players in social networking, unified messaging and unified communication. The intention of mobility service providers is to increase the data usage and earn from users on the basis of data usages. On reviewing multiple mobility service providers’ online portal, it is evident that most of them are now offering free few months of access of top social network site and subsequently charge them on monthly basis.

The move is going to be working fine but it’s not a sustainable model for mobility service providers. Mobility users can easily download applications of social sites and use them heavily by taking bundled data plan at a very low cost. Most of the device OEM’s are already burning most prominent social networking player mobile applications in order to differentiate themselves.

Indian Mobility Service Providers must recognize that the business model cannot be sustained by playing OTT success card even though its OTT players who damaged Mobility Service Providers the most. The Mobility Service Providers cannot live in self denial and not to focus on in-house product innovation. It’s high time, Mobility Service Provider also include in-house development of cutting edge product or services or applications in order to own the Intellectual property rights as well as to have more sustainable recurring revenue.

Indian Telecom Commission Approved 100% FDI – Tagged with Expected Delay

Indian Telecom Commission approved 100% FDI in Telecom sector to shore up investor confidence and kick-start growth in the sector. The FDI is going to be helpful for Indian Telecom sector players to handle their debt effectively and trigger investment cycle. Post 2G license cancellation and slew of regulatory enforcement, Indian Telecom sector experience unprecedented fall in investor and investment confidence by the ecosystem players. Reeling under Fiscal Deficit, CAD; government is considering all avenues to get inflows to protect country rating which is under downgrade threat. Good move coupled with simultaneous concern raised by security and MHA to allow 100% FDI. The concern is definitely going to delay approval by another year. It is surprising that different regulatory body release their segregated reviews rather than offering consolidated recommendation post discussion with all stakeholders. Investors already feel that policy uncertainty is too high and any investment in Telecom sector may be stuck in future. I feel that Indian Telecom sector need streamlined clear policy roadmap compared to FDI approval. It is highly expected that there will be little to no investment in sector till policy and licensing aspects are crystal clear

Indian Telecom Operator Roaming Tariff Packs – Self Induced Potential Showdown with Regulators

Indian Telecom Regulator( TRAI) last month came out with amendment to enforce roaming tariff ceiling for Incoming and Outgoing calls. Regulators also approved second mechanism of voucher offering by Mobile Operators to enable free roaming. Regulators agreed to Mobile Operators and its association strong view that scrapping of roaming charges is going to have negative impact on Mobile Operators financial health. On 1^st July, two leading mobile operators came out with voucher offering to offer free roaming packs. It is interesting to observe that one of the leading operator reduced incoming call tariff while on roaming under voucher packs. It also enables subscribers to roam in its licensed geography and the tariffs are more or less same as if subscribers are making or receiving voice call to/from its home circle network. Aggressive tariff plan is nothing but another new tool for mobile operators to attract new subscribers from competitor network. Post TRAI directive, Reliance Communications showed their unhappiness regarding roaming regulation and within 24 Hours, Honourable Telecom Minister argued for frees roaming and promised to discuss potential second look regarding TRAI roaming directives. It would be extremely difficult for mobile operators to argue that they are going to lose billions of Dollars in case roaming is fully free. On one side, mobile operator’s initiates tariff war and then raise their concerns about loss and talks about raising tariff. Mobile operators recently only cut data tariff by 90% and it raises eyebrows; when they can make money by offering such a low tariff then why mobile operators kept on charging such a high tariff till now. It is going to be tough for mobile operators to raise tariff in coming years. I strongly feel that any upwards tariff move by mobile operator is going to face stiff regulatory resistance.

Bharti Airtel May be Slapped with Another Penalty of 650Cr and Impact

In its ongoing hate and love with Indian regulators, Bharti Airtel may be slapped with another fine of 650Cr for its violation of subscriber local dialling (SLD) based on PTI reports. Telecom ministry blamed Bharti Airtel that Bharti unabatedly offered national and international dialling service as local call even though DoT warned Bharti Airtel in 2003 but Bharti Airtel continued the service till 2005 inflicting heavy loses to BSNL and government exchequer. I am surprised to see the potential upcoming fine. Recently, DoT slapped 350 Cr fine on Bharti Airtel for 3G roaming violation. Two fine is more or less equal to last two quarter profitability. In ongoing situation of legal and regulatory bottleneck, I don’t see FDI would flow back in Indian Telecom Sector

Indian Telecom PSU’s BSNL & MTNL are Focusing on Enterprise Business to Grow

Encouraged with greater acceptance of Enterprise solutions by Customer and clocking 4000 Cr revenue, BSNL is eyeing double digit revenue growth in FY13. BSNL entered into ten year contract with Dimension Data to invest 200Cr to develop BSNL cloud service based on Dimension Data Managed Cloud. The BSNL cloud service to customers will be served through its Internet datacentre which is located in major cities in and around Metro cities. In order to fill connectivity gap to customers to tap new customer base, BSNL is using MTNL connectivity offering to offer managed cloud solution. BSNL is optimistic as client base, capacity utilization is going up. I will be eagerly observing the growth transformation of Government Owned BSNL and its cascading positive impact on MTNL

MTS India Launched Always Talk for Prepaid Subscribers – Attempt to Retain & Increase Subscribers

MTS India offers wireless services in Nine Circles out of 21 Circle as per the wireless service circle. Post license cancellation and acquisition of new one, MTS launched “Always Talk” offering to its prepaid subscriber base. The 2G saga, abrupt withdrawal of mobility service post Supreme Court order forced millions of subscribers to scramble to get new connection from competitors. During process, MTS suffered major brand value. The offer from MTS includes 1000 minutes of free local calls in competitor network. The Always Talk attached free talking time offers to prepaid subscribers, MTS attempting to extend coverage to non-licensed geographies. The intention is place itself as a player who can offer full connectivity across geographies and differentiate it from regional players. I am not sure that the attempt is going to increase their subscriber base or profitability but will definitely help Incumbent players to make good revenue out of it. Indian Telecom sectors are quick to follow on Tariff side and expecting other regional players to match MTS offering to retain their customer base.