Indian Wireless Sector – One’s pain, Other’s Opportunities

Indian Wireless Sector – One’s pain, Other’s Opportunities

03:05:00 Add Comment
In the past 2 years, Indian Telecom sector is in the news with more negatives than positives. The legal wrangling on multiple issues is flashing print media most of the time. It impacted telecom sectors and transformed from growth sector to crisis sector. In the past few quarters mobile operators started trying to get out of woods. The 2G license cancellation and subsequent legal order forced multiple operators to shut their services without any fall back solution for mobile subscribers. Most of the affected mobile operators were the initiator of price war and grabbed large chunk of mobile subscribers. Their on-going legal issues offered an opportunity to other mobile operators to define and redefine industry trends. Most of the incumbent mobile operators experienced lower churn rate last quarter and MNP request even though all of them raised tariffs in selected or all circles. In order to streamline customer service delivery and information management, incumbents initiated clean-up process of non VLR active mobile user base. It was viewed that incumbents are losing market share but in-turn incumbents were busy in cost streamlining process to be prepared for the new user addition post the closure of services from many mobile operator post legal decision. Based on COAI Jan 2013 subscriber data, it is evident that Tier 2 and Tier 3 mobile operators lost around 4.5Mn Subscribers whereas Incumbents added around 5Mn. The new added subscriber can be termed as revenue generating active subscriber. It would offer incumbents an opportunity to move towards the growth path again in next one or two quarters. The incumbents would be vying for additional 7 Mn subscribers in Feb- March 2013, duration post closure of Unitech Mumbai Circle and MTS 10 circle. I believe the temporary lower competitive environment is going to help incumbent reduce their advertisement cost and subsequently per user acquisition cost.
It’s sad to see thousands of job losses, Billions of $ lost in potential investment which would force to invest few more Billion $ to be able to resurface. In my point of view, it would be extremely difficult for mobile operators to regain the confidence of their loyal subscriber base once they are back with services.
In conclusion, it would be interesting to see the revival of mobile operator who closed their services. Post number of regulatory changes, any tariff war is going to be more damaging than supportive.
Free roaming in India – Full of hidden Opportunities

Free roaming in India – Full of hidden Opportunities

09:16:00 Add Comment

Post NTP-12 policy approval, there are round of assessments regarding the impact of One License-One Geography on the potential revenue stream of mobile operators and its spill overs on the ecosystem players. Regulators are pushing to the limit to make sure that the intended policy comes into force by March 2013 which seems little difficult. The GSM association is raising concerns about the impact on revenue and job losses. One of the CDMA operator welcome the move and sees opportunities around it.

I see huge benefits for Telecom industry ecosystem players’ barring the OEM’s involved in roaming related product or service offerings.

According to TRAI documents, the GSM and CDMA operators are generating 8.5% and 3.9% roaming revenue out of total mobility revenue and it is decreasing every quarter. On a consolidated basis, roaming revenue contribute around 7% of the total mobility revenue which translate to $2.25Bn. At high level, it looks like that it would have major impact on mobile operator revenue stream, EBITA and EBIT level. It is true that it would impact OEM’s offering roaming product or services to mobile operators on network utilization and revenue share model.

According to reports, around 10% of the total mobile subscriber base contributes to roaming revenue. It is also noteworthy that there are around 71 Mn subscribers carry more than one SIM’s. The voice usage pattern of frequent travellers in India is to use local SIM to bypass high roaming charges.

In the recent quarter, mobile operators raised tariff by 20% in some circles. They also indicated that the cost structures of offered triple play services are still very high and would be forced to increase tariff in coming quarters to be able to sustain.

In case of free national roaming under one license, one geography regime, it is widely expected that mobile operators is going to increase the tariff again. The recent tariff front initiatives by mobile operators would be beneficiary to wireless ecosystem players

The tariff would be raised for on the pretext of roaming charging abolishment and would be applicable to all user bases. The tariff uniformity across service geography is going to be positive for mobile operators as against current scenario of different price point for different circle based on the user paying capacity.

In my point of view, Metro applicable voice price point would be enforced across the service geography. It is going to increase voice realised revenue per minute for most of the mobile operators. The network MoU per subscriber is going to witness healthy growth as it is going to remove the user mental block of different tariff points.

The price points for data and MVAS would be kept same across service geography. It would have direct positive impact on MVAS ARPU. The MVAS APRU is going to increase from current $1.98 per active subscribers. The negative growth factor inflicted due to MVAS regulation might see a reversal with rise in MVAS price points even with reduced level of active MVAS userbase. It is also expected that carriage charges go down drastically as the carriage cost would be based on bandwidth centric rather than content centric as per the NTP-12. It will have direct positive impact on content price points and subsequently usage.  On higher realisation of revenue the revenue realization of MVAS provider is going to be higher. It would enable higher data, MVAS user adoption, usage.

On the data adoption level, it is widely expected that license service area would carry same tariff points and would trigger huge growth in data segment, revenue realization and higher share of data revenue out of total mobility revenue.

The most probable above mentioned dynamics is going to trigger higher revenue realization potential across userbase and technology upgrade from segregated service delivery to centralized service delivery mechanism. It would create millions of $ opportunity for technology enabler for network upgrade.

In my point of view, the upcoming revenue opportunity through one license-one geography across services would be much higher than the lost revenue from abolishment of roaming revenue. The government is going to get the higher revenue realization through multiple charges and tax which accounts for 35% of Gross revenue.

The struggling MVS ecosystem players are going to experience growth moving forward.

In conclusion, it is very good opportunity for mobile operators to mitigate any tariff wars and increase revenue across triple play service and products. The clarity on Unified licensing regime is going to define and refine wireless ecosystem segment. It is going to be positive EBITA contributory for wireless sector. It would be interesting to see how Tier2/tier3 mobile operators position themselves given the attached legal, financial issues with them. The challenging regulatory directives can be easily played out to create business opposition. We just need an eye to catch it.

Indian wireless sector may experience negative net subscriber growth for many quarters

10:37:00 Add Comment
In continuous series of information sharing on Indian wireless sector, the picture still looks very negative on detailed analysis of Dec2012 data released by TRAI. The released consolidated wireless industry level data shows that wireless subscriber level stands at 864.7 Mn and experienced huge drop of 15.9 Mn in net subscriber addition QoQ. The biggest contributor is non-active subscribers deactivation process initiated by incumbent mobile operators which led to reduction of Non-VLR subscriber but still at a very high level of 163.11 Mn as shown in subscriber distribution figure for Dec. 2012.

Subscriber Distribution (In Mn)











The constant high level of non-active subscribers in the wireless segment indicates that sector would witness more negative net subscriber growth for many quarters to come. We may witness few positive net subscriber addition growths but it all depends upon the challenger or Tier 2 and Regional Tier 3 mobile operator’s decision to clean up their non-active subscriber base. As shown in Figure “Active vs. Non Active Subscribers Dec2012”;

Active Vs Non-Active Subscriber Dec 2012 (In Mn)











The incumbent mobile operator’s level of non-active subscriber base are reducing fast and reached around 5% of the total subscriber base whereas Figure clearly demonstrates very high level of non-active userbase with Tier 2 and Tier 3 Mobile operators such as Tata, BSNL, Unitech, Aircel and MTS.

It prompted me to analyse the current market share of mobile operator’s w.r.t Active and Non active subscriber base instead of TRAI reported market share on consolidated basis. The Figure “Market share Active vs. Non-Active” clearly shows that BSNL, Aircel, Unitech, MTS are the leaders of Non-active subscriber base in Dec 2012 and have not initiated any clean-up process.

Marketshare Active vs Non-Active












Based on TRAI released document and subsequent extraction of User loss MoM on wireless subscriber data Dec 2012, net subscriber addition for BSNL, Unitech was positive to neutral whereas detailed analysis as shown in above figure shows that they have not initiated any non-active subscriber clean-up process.

User Loss (Dec-Nov)











The above analysis clearly indicates that incumbent mobile operators are focussing more on cleaner information management to reduce overall service management whereas challengers (Tier2) and regional (Tier 3) players still need to undergo the refinement to be more efficient and effective in subscriber management.

The higher non-active subscriber base in many operators inflated their consolidated wireless subscriber market share for Dec 2012. In Figure “Reported vs. Actual (VLR) Market share”, it is clear that VLR active subscriber market share for incumbents are growing whereas challenger/regional players are losing.

Reported vs Actual (VLR) Market Share











The incumbent players like Bharti Airtel (3.3%), Vodafone (2.8%), Idea (2.8%) and Reliance (0.9%) gained market share on active subscriber basis whereas the biggest looser are BSNL, Aircel, Unitech, MTS.

Market share Gain/Loss based on Active Subscribers











According to COAI press release, In Jan 2013, GSM operator’s net subscriber stands at 403k. It is interesting to note that incumbent mobile operators added around 5Mn subscriber and the gain got neutralized by loss of around 4.5 Mn by Challenger/Regional player. The another highlight of press release was non initiation of non-active subscriber clean-up process by PSU mobile operators such as BSNL and MTNL, which contributes around 50 Mn non active subscriber base in the current consolidated subscriber base. I am expecting another 5 -6 Mn net subscriber loss in Jan 2013 once consolidated data gets released by TRAI as CDMA operators are in the process of clean-up.

In conclusion, the wireless sector is bound to see continuous negative net subscriber growth for many quarters to come. The recent closure of services due to Supreme court ruling and uncertainty around few mobile operator’s pending legal issue will have direct impact on the overall growth of wireless subscriber addition or churn. In current scenario; industry is bracing for challenges when it comes to Challengers/Regional Players whereas it offer great opportunities for incumbent mobile operators.

Source: TRAI performance indicator Report, Dec2012 Subscriber Data, COAI press release
One Nation –One License -Free Roaming Policy offer India Full MNP vision achievement

One Nation –One License -Free Roaming Policy offer India Full MNP vision achievement

09:23:00 Add Comment
In approved NTP 12 document, the Indian government clearly stated long term vision for telecom sector - to exploit the already built foundation to create unprecedented communication reach across Indian geographies. It also set very aggressive targets on teledensity, potential network deployments to serve and offer Indian people very cost effective communications services.

I have already highlighted in my earlier blog posts, MNPRegulation – Regulator’s Vision Verses Reality and UnrealisticNational Telecom Policy vision to achieve 70% Teledensity by 2017 & 100% by2020, the current pattern of broadband and logical challenges in achieving the set goal by the government. But the most interesting vision is to
  1. Strive to create One Nation - One License across services and service areas.
  2. Achieve One Nation - Full Mobile Number Portability and work towards One Nation -Free Roaming.
The above mentioned clause took telecommunication service providers by surprise and it is even more surprising when there was lack of visibility on the licensing issues.

Currently, Two MNPO’s are managing dipping database and service providers in the respective zones and are integrating their networks through centralized database development to get the real time update.
In a current scenario, the mobile user can only make donor to receipt mobile operator switch within their current service geography or circle.

Is there a need of “Full MNP” when one license across services and service area is going to be implemented?

In a scenario of national roaming abolishment; Intra circle roaming would be abolished and all operator level switch would not be limited to specific circle level. Once intra circle level roaming under one license regime comes into force, it would automatically enable ported out user free movement and flexibility of keeping same MSISDN across service geography. It would automatically offer full MNP across recipient’s mobile operators’ service geographies.

The mobile operators would be forced to pay carriage fee in order to correctly connect and deliver voice call and SMS respectively. On the capex and opex front, the Mobile Operator’s, International Long Distance Operator’s would be forced to remodel centralized ported user database, SMS aggregation platform as well as realign their service logic and business logic in order to correctly redirect voice and SMS traffic. I have not seen any updated regulatory document about the changes required to be done on the dipping database update side.

Even more surprising that regulator are in consultation with stakeholders, post deciding on the policy without zeroing in on the licensing, potential solutioning impact on the user and network performance and cost attached with it.

In my point of view, free roaming would remove the need of Full MNP. The existing mechanism of limited MNP would automatically be extended to Full MNP. The regulators may opt for the clear specifications defining all the raised concerned points by the stakeholders to reduce the revenue loss fear and associated cost. The consultation regarding the licenses and associated cost, post policy approval is bit surprising. I must stress that there are multiple hidden business opportunities for ecosystem stakeholders out of the unwarranted challenges around Full MNP and free roaming.
Reduction/Removal in Service Tax may help Indian government achieving vision of low cost communications services

Reduction/Removal in Service Tax may help Indian government achieving vision of low cost communications services

01:17:00 Add Comment
For the last few quarters, post India New Telecom Policy-12, there is rounds of industry visionary discussions about the positives and negatives impacts on mobile operators and subscribers. In cabinet approved policy, the national roaming is going to be free by March 13 enabling subscribers to pay one tariff across mobile operators’ service area. It removes the different pricing model in different geographies of service area based on the service area based subscriber paying capacity. The recent tariff increase by the incumbent mobile operators did not go well with regulators and ministry. Recently, Communication and IT minister Mr.Kapil Sibal came out with strong statement about the mobile operators move and stressed that government would take all necessary action to make sure low communication service for subscriber. I agree that subscribers should get the best possible tariff with highest level of quality of service. The mobile operators’ association; COAI as well as all major operators came out and highlighted that it is getting increasingly impossible to keep on investing on network capacity, QoS, in the dynamically changed environment. In case government really want to reduce the experiencing cost on subscriber, there is always an option with government to reduce service tax and it would not hurt mobile operators financially. It would neutralize any recent hikes in tariff by mobile operators to be viable in the competitive market place. The reduction is going to help mobile operators to generate cash through recent hikes and invest back in economy in one or another way whereas government may opt for reduced or abolished service tax on telecom services. In the past few years, telecom is considered as cash generating sector for government to reduce their fiscal deficit as well as fulfil other social responsibilities. It’s correct that, any reduction in service tax would impact cash strapped government dearly with more than $3Bn of lost revenue. I believe that mobile operators invested years and billions of $ to create deep down network capabilities and reach. In case, the government vision is to offer low cost telecommunications services to masses then it should not only be expected from mobile operators’ expenses.
Growth Opportunities in Indian Mobile Operator Segment

Growth Opportunities in Indian Mobile Operator Segment

02:02:00 1 Comment
The MVAS, UCC, User verification norms based regulation is hurting VAS revenue for the last six to eight quarters. The regulations clearly impacted SMS and IVR based VAS services and products. The mobility messaging and other VAS revenue share came down from 10-11 % (Q4, FY12) to around 8% (Q3,FY13, consolidated one) whereas data revenue reached to 6-7% (Q3, FY13) from 3% (Q4, FY12). Moving forward, Mobility industry would experience further negative growth in high single digit QoQ for next few quarters reflecting the regulation clause of getting the authorization from user before activating MVAS services. Any authorization process based on IVR, SMS or email may experience low adoption by the consumer due to multiple surrounded reasons. It would clearly impact on Messaging, IVR, Music, RBT, ODV and SMS based delivered, activated Applications. The expected market size of total and non-voice mobility market size may touch $ 32 Bn & $ 5.7Bn (including data and other services). On-going revenue trend suggest that Mobile operators may be able to generate close to $ 2.3Bn from data services neutralizing the loss of MVAS revenue share. According to TRAI performance indicator report, 49% of the total mobile user devices are data capable and that translate it to 440Mn pulse potential total addressable market. With the current paid data user base of around 140 Mn generating slightly lower $1 ARPU present great opportunity to convert lost revenue opportunity into new revenues. Based on the numbers and trend, Mobile operators are losing more revenue than generating. With the population base of 65% as youth, opportunities are offered for mobile operators for smooth transition from SMS, IVR & Voice based and dominated MVAS to data centric MVAS services. The MNO’s are actively refining and defining their evolving delivery mechanism to make it interoperable, portable, and secured through cloud centric and OffNet/OnNet supported environment to capture the un-captured.
The super hyped 3G & BWA - $13 Bn in license auction and another $ 10 Bn in network upgrade investment stretched service providers balance sheet to the limit and their 30% EBITA is used to service debt burden. The slow 3G service user acquisition which stands at around 30 Mn worsened the situation. In the BWA segment only few operators are able to launch their services. Most of the observer started writing down India 3G story as none of the mobile operator covers all circles and regulatory/legal dispute on 3G roaming. It might have dented user confidence to opt for the service. In India, only 8-9% of the total mobile users are frequent travellers and would require seamless roaming. I believe strongly that slow adoption will gather pace with the higher adoption of enabled handset, lower cost through cutting edge delivery platform. The dedicated and priority based QoS, security, data protection, online storage space and dynamic charging model would attract more and more user base. The recent data revenue and user growth is going to act as catalyst for ecosystem players to focus on data centric services, product or application development instead of focussing on auto cycled legacy MVAS product line. The paid applications download is going to experience high double digit growth QoQ for next few years from current run rate of 7-8 million download per month. In my opinion, the incumbent mobile operators must create and invest heavily on new product development research and development to keep on fulfilling user adoption and usage trend pattern quickly instead of relying on MVAS players’ product lines. The mobile operators can easily invest by reducing advertisement cost by 2% as mobile operators at an average invest 10% of their revenue on advertisement. The continuous investment on brand building by most of the mobile operators for the last 10 years created an environment where these brands are household name and thus now they can afford to reconsider their strategy on advertisement investment cut
The innovative services offering product lines to manage Consumer and Prosumer VAS across connected device environment would kick-start VAS revenue growth. The realignment of consolidated SDP into multiple virtual service delivery platforms is needed in order to cater voice, data and video centric VAS portfolio. It would enhance the QoS w.r.t service creation, execution, activation and provisioning. It would also offer granularity in B2B and B2C usage mirroring, higher renewals and increase user adoption.
M&A in Indian Mobile VAS service provider segment inevitable

M&A in Indian Mobile VAS service provider segment inevitable

02:41:00 Add Comment
The managed services model adoption enabled MNO’s to reduce cost, increase efficiency and streamline number of vendors but with trade-offs’. It attached another ecosystem player in service delivery framework and created disconnect between MNO’s product team and VAS solution providers. In order to even execute proof of concept, the VAS players need to undergo multiple interactions at different levels in the MNO’s ecosystem that delays the integration process. With low revenue share model, it is getting extremely difficult for VAS players to maintain healthy cash flow and invest heavily on innovative product line.
The negative growth forced MNO’s to focus on newly built data network to compensate the lost revenue on the messaging and other VAS services. The move also impacted many home grown small MVAS vendor to focus on voice and text based product portfolio’s and forced many to restructure their product or business model.
It is observed that with the dynamic changing competitive environment within MVAS segment; the leaders started expansion in high margin and profitable geographies to mitigate negative growth challenge in India. Carrying intense expertise to deploy their services in a very competitive and technologically complex environment, the Indian MVAS players gained major customers in Europe, Latin America and MENA. The potential customers are also happy as the products are well tested, low priced and carry potential to attract new and retain existing customer base. OnMobile RBT, Comviva mCommerce, IMIMobile Platform, Hungama Music portal, CanvasM device testing lab environment are some of the example and the international segment revenue growth of listed companies are self-explanatory.
In MVAS ecosystem, the content owner, publisher, aggregators, technology enablers share 30-35% of the total generated revenue. The fall in revenue share, dynamic competitive scenario forced MVAS provider to create or own E2E ecosystem to maintain and grow revenue, userbase and to manage healthy RoI, TCO, TCA through increase Total and addressable market size.
It is expected that growth in competition in MVAS ecosystem, reduction in revenue, revenue share and fall in user base would trigger consolidation in next few quarters. Many of the MVAS player’s valuations are at attractive level compared to international peers for many domestic and global technology giants.
In conclusion, Indian MVAS solution providers’ strategy to target developed and developing countries to increase their revenue base would evolve them into more E2E MVAS player. The evolving Billion $ industry is going to attract international cash rich technology giants to opt for M&A in the segment to gain the direct access of opportunity filled Indian mobile segment. The M&A in MVAS solution provider segment is inevitable
Impact of Multiple Toll Free Numbers, Short Codes & Portals for UCC, Telemarketing, MVAS, Data, MNP

Impact of Multiple Toll Free Numbers, Short Codes & Portals for UCC, Telemarketing, MVAS, Data, MNP

06:41:00 2 Comments

The most annoying aspect of MVAS user base is to keep getting IVR, SMS initiated promotional campaign by MNO’s, VAS provider and Enterprises. This has triggered more and more MVAS user opting for DNC directory registration. The continuous attempt and failure to stop unwarranted activities by ecosystem prompted regulators to come out with regulatory directive implementation to reduce mobile user pain points.

For UCC, the NDNC mobile users are supposed to call back on paid customer service of mobile operator to provide the details of UCC. Post launching complaint, mobile users get ticket number with a promise that they will not be getting UCC message after 4 business days and mobile operators’ customer support team will validate the same post deadline date.

Alternatively (Ref http://www.nccptrai.gov.in/nccpregistry/Welcome.jsp?EIID=null ) customer must send SMS to 1909 by following the format "the unsolicited commercial communication, XXXXXXXXXX, dd/mm/yy". Where XXXXXXXXXX - is the telephone number or header of the SMS, from which the UCC has originated. The telephone number or header and the date of receipt of the unsolicited commercial SMS may be appended with such SMS, while forwarding to 1909, with or without space after comma.

In a similar fashion, unwarranted MVAS deactivation process include mobile user calling IVR supported and guided toll free number 155223. The system identifies called number, maps it with the any activated MVAS services and subsequently execute customer request.

For MNP, each mobile operators launch different toll free number series with 1800. The mobile user needs to visit MNP status section of foreign network to check the status of their porting request.

For any information regarding new service, MVAS, Billing status, the mobile user need to call 121 or 111 or other allocated numbers.

The multiple information points, complaint numbers, toll free numbers are not adding value but confusions for mobile consumer base. It’s a human nature that single click service always gets higher adoption.

It raises more queries than answer viz.
  1.  When UCC regulatory solution is already implemented then why mobile users are still receiving UCC. It is very common to hear from service provider that they are not allowing any UCC initiating from home network whereas cannot control the same when UCC is directed from foreign network. It shows that either customer service professionals are not trained properly or not willing to accept the gap in the network.
  2. Isn’t it possible to block MSISDN initiated UCC messages at network level? The UCC complaint directives and subsequent release of number of complaints confirms that there are gaps in the directives or network levels
  3. What are the mechanisms used to check the content of an UCC to validate if the regulatory directives are followed? For example, the limit of 200 SMS per day are being misused to  flood UCC and based on the current state, it is very clear that there are gaps in correlating information from NDNC dipping server, Content filtering, Security and White/black listing of MSISDN.
  4. Is there any monitoring tools implemented to scan SMPP based messages and accordingly to block illegal traffic?
  5. If SMS is used to get the confirmation from mobile user for the authorization to activate MVAS for any new services then the mobile operators may also opt the same process to take the authorization for existing running MVAS. It is hard to understand why mobile users are accountable to initiate the process to deactivate existing services
  6. Is it difficult to create consolidated portal and single toll free for MNP, with hierarchical administrator management functionality, offering mobile user to select from the list of all service providers with service area and opt for foreign network?
  7. Is it mandatory under any clause of regulatory directives that service providers must offer different toll free number or can consolidate under one toll free number? In my knowledge that’s not the case
  8. Isn’t it really difficult for most of the mobile user to maintain all Toll free number? Many consumer and prosumer don’t even know on going initiative by service providers or regulatory body
  9. Generally, its consumer and prosumer tendency to ignore bothering SMS and OBD based promotional calls but it should not be ignored given the growing security threats towards mobile devices. According to TNN research the 'Malware attacks on mobiles went up 122% in 2012 compared to 2011’. The research outcome also demonstrates the hidden threat towards user device, data including financial information.
Consolidation of all authorization, activation, deactivation, and complaint across UCC, Telemarketing, MVAS, MNP and integrating it with existing or new portal is going to reduce cost as well as increase awareness among userbase.

In conclusion, the current scenario is creating complex environment for consumer to launch their complaints. It is impacting negatively on mobile operator O&M cost structure and subsequently high TCS (total cost of service) per consumer. The streamlined consolidated single portal, single Toll free number across mobile operators’ network which can be owned by mutually agreed third party will result in quick resolution of consumer pain. The move would be a win-win situation for service provider to comply with regulation by sharing the cost of management of portal. In a scary upsurge of security threats towards mobile devices, all of us should come forward to raise concern. Any negligence can be used as entry point by hackers.
Indian mobile device market – (Price, Profit) Erosion, Overheated Competition and Future

Indian mobile device market – (Price, Profit) Erosion, Overheated Competition and Future

09:13:00 Add Comment

India being the home of second largest subscriber base attracted all international mobile device vendors. At the same time more than 130 domestic companies also frayed into the segment to capture market share. Post liberalization in 2001 – 2004, there was burst of new domestic companies entering into market place and started challenging international players. In 2008-2009, the domestic companies started to capture market share from international brands like Nokia, Motorola, Sony (fka. SonyEricsson). With the evolution of Android OS and adoption of Chinese contract manufactures, the domestic player moved up in the ladder and replaced many top international brands from Top 5. The market leader Nokia, Motorola, Sony Ericsson & Blackberry product disruption in the market place also offered competitors to increase their market share through low cost model targeting rural subscriber and tier 3 customer bases in rural sector. According to Gartner, the unit market size of mobile device would grow to 251 Million with a growth of around 15% YoY2. It pop ups a query about the competitive state of domestic mobile device companies. The recurrence of Nokia in early 2012 and release of Asha series, industry dynamics of budget Smartphone and feature phones has changed. The focussed entry of Huawei, ZTE, Acer, HTC and Sony has increased competitive environment. In order to maintain the market share and match with the International players, the domestic mobile companies are playing on the price point, preloaded content and trying to match with international player on the Smartphone front.

With the negative growth rate on net subscriber addition and lower refreshment sales, both the international and domestic players are witnessing lower to negative revenue growth with market share erosion. The new entrants like Huawei, ZTE are grabbing market share from competitors and are moving to Top 10.

Moving forward, it is expected that many domestic companies would be forced to shut down their operations as volume vs. price is the key indicator instead of price vs. performance. The Smartphone segment will be dominated by leading international players and top five domestic companies as the target segment purchasing decision factors would be Brand, Build, Features, Durability and Price. With the deployment of data network, more than 120 million paid data userbase, data centric product offer would encourage subscribers to opt for entry to medium level Smartphone at an affordable price points. It is expected that by end of FY 14; Smartphone share in Indian mobile device market would cross 25%. The leading International players such as Nokia, Samsung would cement their leadership across feature and Smartphone segment whereas Apple, Samsung, Nokia and Sony would be fighting with their differentiated design & feature rich products for high worth subscribers (2% of total subscriber base). The domestic players would be fighting for maintaining their market share. The launch of BB10 platform, and new device would attract Enterprise subscriber base. International players are launching their content portal and integrating portal widget to enable consumer base access content whereas domestic players are bundling content with device to attract consumers. It would be interesting to see, how few domestic player successful entries into Tablet market is going to impact international players.

In conclusion, the domestic mobile device players are redefining their strategy to bypass International player. Currently its survival story for small player whereas growth story for market leaders. The price point neutralization by International players changed the device market place dynamic



MNP Regulation – Regulator’s Vision Verses Reality

MNP Regulation – Regulator’s Vision Verses Reality

00:57:00 Add Comment
In 2009, Indian regulators came out with ambitious regulation to enforce Mobile Number Portability. The vision was centric to number series, network performance, infrastructure control, security, consumers, and competitiveness. In order to make the process quick, the regulators divided Indian geographies in two zones and appointed MNP operator to manage the MNP database. The regulation also included the stringent conditions to access MNP database to mitigate any leakage on consumer data. It also included a clause that any telecom centric service provider must host all infrastructures in India and won’t be allowed to carry out any processes related to MNP data outside India. In order to handle international traffic on the voice and SMS side, ILDOs were asked to install additional infrastructure to direct, redirect voice and SMS (complete one) to the right home network of ported mobile subscriber. The regulators also fixed the porting charges of $0.35 from mobile subscriber to offer the parity.
The regulations forced mobile operators and international long distance operator to invest millions to accommodate expected changes on the subscriber awareness, network, reporting, billing, bilateral agreements and additional resources to execute MNP porting request by subscribers.
The subscriber accountability was nothing but cleared dues in order to opt for the porting request from home to foreign network.
In an environment of stiff competition, tariff wars initiated by new entrants, subscriber acquisition and retention war acted as a blow for all mobile operators.
As of now around 78 million mobile subscribers opted for porting request and in my point of view most of them negotiated free call minutes and SMS as selection criteria to choose new home network. The Circle B and C observed maximum porting request where new entrants launched their services and offered free calling within home network to attract potential subscribers opting for MNP. The indirect user acquisition mode, initiated by new entrant, forced incumbent mobile operator to offer freebees to match with the competitor to retain their subscriber base. The unexpected dynamics impacted new entrant and incumbent mobile operators with low realization of ARPM (Average revenue per minute) and low messaging/VAS revenue.
It is expected that with the rise of tariff by incumbent and reduced freebees, the subscriber flip flop strategy to get the minimum bill will fail.
As against the regulators vision of creating QoS (Quality of Service), security and fair competition as major parameter, subscriber opted for MNP considering low billing, high usage offer.
In my opinion, the regulators must also make subscriber accountable where subscribers must offer valid and authenticated reasoning to opt for the porting service to foreign mobile network. In case, subscriber fails to provide the same then they should be charged for porting to discourage subscriber to misuse regulatory propositions.
In conclusion, the mobile operators spend at an average around $ 9 to acquire a new customer and mobile operator’s interest must be protected. The mechanism must be developed to refine and define existing porting criteria for mobile subscribers. With the rise of tariff and fall of freebees, cost and utilization sensitive subscriber base would be discouraged. Moving forward I won’t be surprised if there is a drastic fall in porting request across circles