Bharti Airtel Q1 Ending June 30, 2013 Result – Clear Focus on High APRU Subscribers

Bharti Airtel released their Q1, ending June 3, 2013 indicates very interesting pattern as against the competitors. Most of the incumbent and regional telecom service providers are vouching for more subscriber additions whereas Airtel Subscriber base increased from 187.3 Mn to 190.94 Mn YoY achieving mere subscriber growth of 1.9%. The slow subscriber addition in recent quarter attracted lots of criticism by strategist, analyst and even questioned Airtel competitiveness slippage as against other incumbent telecom players. Interestingly for readers, Airtel voice APRU increased from 154 INR to 166 INR Y-o-Y achieving healthy 7% growth whereas Total ARPU increased from 185 INR to 200 INR Y-o-Y achieving even better growth rates of 8%. On the data side, Airtel data user jumped to 46 plus million user which also includes 6.8 Mn 3G subscribers clocking data APRU of 63 INR. The QoQ data APRU growth rate is 14%. I have been reading lots of negative news about Bharti Airtel ability to redefine their cost efficient oriented growth chart but today result clearly indicate Bharti Airtel strategy to strengthen their Indian operation while competitor enjoy Airtel ongoing concern on Africa front. Analysts were too impressed about Vodafone India ARPU of 193INR, I believe that analysts must appreciate Airtel what they achieved on ARPU side in very difficult regulatory and economic conditions rather than focusing on their debt levels, financing cost and Africa. In my point of view, Airtel is huge cash generation and improving EBITA level is going to help them to sail through their debt issues

Android Mobile OS & Challenges for Ecosystem Players

Android Mobile OS promoted by Google experienced phenomenal growth. The growth of open ended Mobile OS with many innovative features positioned Android Mobile OS as the most preferred Mobile OS for application development. The rise of Android led to the fall of Symbian Mobile OS and quickly recaptured market share from Symbian. The adoption was so fast and dynamic that the competitor OS such as Symbian failed to release new versions to match with competitor. This led to Nokia decision to scrap future device development on Symbian and select Windows Mobile OS as their future product line up mobile OS. The disruption in the competitor camp allowed Android to attract most of the Symbian developer community towards Android developer community. The unprecedented market share and supported device growth attracted all major Application development firm to turn the focus on Android to make maximum profit out it. It also attracted many smaller developer communities to cash in the open development framework and monetization mechanism by hosting application on multiple Applications hubs. Globally there are more than 500 Apps Hub platform offering hosting of applications. The major challenges’ currently facing by Android is to maintain the application quality and certification management. It’s a common perception that the application hub providers are going to redo application testing to check its compatibility, inoperability and portability with respect to device, data, security and internal format as per the Android Mobile OS guideline. Some time, it is being overlooked given the applications hosting demand. According to Juniper Network report, 92% of the all the malicious applications are designed using Android and it poses great danger to device as well as user information. The many applications users are not tech savvy to identify hidden threat to their device and data. They are also not aware that it can be resolved by downloading patch on regular basis. Given the growth dynamics of Android and huge applications, content, contextual and collaboration ecosystem around it, it is important to have more stringent guideline to host any applications by application developer to not only safeguards but at the same time also protecting sensitive data going to hackers.

Indian Telecom Sector Loosing Urban Subscribers

According to TRAI April Subscriber data Indian Wireless Sector Losing High ARPU urban subscriber base whereas adding low ARPU rural subscriber. The trend is quite alarming given the recent tariff rise in urban area as well as change in roaming policies. In April, Urban subscriber base decreased by 4.12 Million whereas rural subscriber base increased by 3.34 Million. The Teledensity of Urban area decreased by 6% and stand at 139% whereas rural area teledensity increased by more than a percentage point and stand at 40.5 %. The industry buzz around competitiveness among incumbent operators and their market share gain should not be focussed much as revenue matter more than subscriber numbers in current Indian wireless scenario. The reduction is urban subscriber as well as teledensity may carry indirect impact on M-VAS and data revenue whereas offer voice revenue opportunity from rural sector. I view reduction as a result of stringent authentication process, roaming tariff coming to reasonable level.

Blackberry Eyeing BYOD User through BES 10 Supported Security Workspace

Blackberry launched Secure Workspace feature which is based on Blackberry Enterprise Service. Secure Workspace target is to tap in Android and iOS device Users through BYOD support play. Secure Workspace can segregate professional and personal data and in-turn support server as well as in transit data support. The yearly subscription is $99 per annum and it would act as trigger point to increase their enterprise subscription which is under tremendous pressure for the last few quarter. The move is going to help enterprises with BES deployment to reduce their communication and connectivity cost. The well-orchestrated position of Secure Workspace is going to be a differentiating factor in Blackberry BES 10 and may trigger higher adoption from existing and potential customer base

Mobile Internet Ad Revenue – Another Revenue Spinning Machine for Google and Facebook

Google successful endeavour to take on Symbian and Blackberry with its open Android Mobile OS is showing new revenue trend. Post pioneering and dominating search engine market, Google attracted many partner in its attempt to redefine mobility landscape. The open Android environment and strong developer community helped Google to tag in its other assets such as Adsense for Mobile to enable advertiser reach out to mobility user in more effective manner with higher conversion rate probability for its advertisers. According to eMarketer report, For FY12,Google captured 52.36% of total market size of $8.8. The growth probability filled market share came at 5.35%. According to report, FB is expected to quadruple its Net Mobile Internet Revenue to more than $2Bn in FY 13 and Google revenue may reach to$ 8.85 Bn. Report indicates that Google acquisition and product positioning worked whereas Microsoft failed in that segment. During early phase of Android environment launched, Analysts had their reservation around it and tireless effort of Google and its partner enabled Android ecosystem as second mechanism to Mobile Internet Ad platform. It would be interesting to observe next move by Yahoo- Microsoft combo.

Ericsson Acquiring Red Bee Media – Building Service Around Connected Devices

Ericsson entered into definite agreement with UK based Media Servicing Company Red Bee to enhance its portfolio. With growing adoption of content interoperable across connected devices are attracting leading network gear makers to integrate end to end media asset management. Most of the broadcasters are looking to upgrade their infrastructure to tap in mobility user base with their differentiated digital properties. The dynamic undergoing shift in industry prompted solution providers to integrate automated metadata service coupled with creative service and enable publisher to populate their digital video to content across multiple geographies. The ongoing downturn on Telecom Network gear market place and aggressive moves by Chinese player prompted major OEM player to shape out their business strategy one step ahead to keep winning and maintaining market share.

India Cyber Security Policy Framework 2013 – Good Initiatives with Tradeoff's

India released New Cyber security policy framework and outlined potential future initiatives to protect government and non-government information installation from non-state actors. I congratulate all involved stakeholders for coming out with minimum framework to protect our information. The policy talks about public-partner collaboration to tackle any attack on India information installation and at the same time assure all users from different verticals to about their information safety. The policy is like forward looking statement of publically traded company financial statement. Before talking about future, I believe accepting the leakage in the current information security system installation and roadmap to plug the same. In a country where maximum number of user accessing social sites through mobility device are first to line of user being exposed and targeted by non-state actors.

In 2010, similarly TRAI came out with very ambitious regulation related to Unsolicited Commercial Communications, Server hosting location, User data storage and access, Network management professional origin requirement and many more. The reality is not bad but very bad. It is the easiest thing to get user information and target them with malware, adware and phishing through multiple medium and interestingly maximum user are not aware that they are being targeted. Flood of email advertisement through spammer companies advertising well-known brand clearly indicate business originator.

Instead of talking about future framework including PPP model, government must focus on increasing social awareness ad campaign. Few days of print based awareness program is not going to educate Indian citizen but focussed effort is needed. How many times, we have seen any security awareness ad flashing during Prime Time TV shows. The policy is definitively going to bring in latest technology and revenue potentials for leading security firm. There must clear guideline for all government and non-government organization to install X-Y-Z security solution to fulfil India Vision of Cyber Security. I strongly believe that this time around user may see real change rather than launching and dumping regulation without proper tracking.

Google Premium Smartphone Moto X Launch – Focusing on US Market

Google is expected to launch its first Moto series smartphone post-closing Motorola acquisition. Motorola CEO Dennis Woodside commented that Google is going to focus on premium smartphone market by offering innovative features such as sensor and contextual pattern analysis cum delivery. Google is planning to launch multiple Moto branded Smartphones in next 6 months to capture niche premium segment. The new Texas based manufacturing facilities which is going to generate more than 2000 jobs in US will be assembling Moto series of Smartphone. It would be interesting to see the cascading impact on Google Android platform major supporter Samsung who is struggling to maintain the same level of growth post slow S4 adoption momentum. Being the central magnet of Android ecosystem, any misstep by Google on pushing MotoX w.r.t other partner’s branded Smartphone may create cracks. One may expect huge advertisement push by Google anyway. Google strategy to create hugely successful OS ecosystem and at the same time using innovation to differentiate itself from others is remarkable.

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.