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Submitted By M Sufiyan Khan

AFP 2012 13

TRAI puts govts plan to go for another auction on hold

MIHIR MISHRA, SUBHOMOY BHATTACHARJEE Posted: Monday, Nov 26, 2012 at 0140 hrs IST

New Delhi: The Telecom Regulatory Authority of India (TRAI) has thrown the rule book at the government saying it will not be possible to conduct another spectrum auction within this fiscal. The government had planned to bring down the reserve price of airwaves and carry out another auction to sell those bands which could not be sold in the recently-concluded 2G auctions, before March 2013. But quoting section 11(d) of the Telecom Broadcasting and Cable Law, the regulator has said it cannot revise its recommendations on spectrum pricing. According to its provisions, the government can ask TRAI to decide on any specific issue, only once. If the government disagrees with the recommendations the regulator can be asked to revisit the topic, but that too only once. High-level sources in the government said TRAI, under J S Sarma, had given its recommendation on the pricing of spectrum in April this year. The suggested price of Rs 18,000 crore for a 5 Hz band had been sent back by the government for reconsideration as it was considered too high. This too was deliberated by his successor, Rahul Khullar, and re-sent to the telecom department for a final decision. This means Sarmas recommendations cannot be sent back to TRAI for a fresh look. But this is necessary to reduce the price of spectrum as even the reduced price of Rs 14,000 crore for a 5 Hz band did not find any takers in most telecom circles in the latest auctions for 800 MHz and 1800 MHz. Instead TRAI will now have to be asked to examine the matter afresh without any reference to the existing recommendations. This means there will be a long procedure of consultations with the industry followed by a consultation paper and so on. The timeline will stretch to at least four months at a conservative estimate, said a source. This will be welcome news for the existing telecom companies as they would have found it difficult on their existing balance sheets to raise more loans to bid in another auction so soon. But it is bad news for the government, which is hoping to raise additional non-tax money to meet its hugely challenging fiscal deficit. In the 2G auctions in November the government could sell only 101 out of the 176 blocks of spectrum on offer. The metro cities of Delhi and Mumbai, which accounted for 40 per cent of the base price of Rs 14,000 crore for 5 MHz of 2G spectrum, drew no bids. After the muted response, Telecom Minister Kapil Sibal has announced his intention to bring down the base price for spectrum in circles which did not attract any bid. Delhi, Mumbai, Karnataka and Rajasthan did not get any bid. The government earned only Rs 9,407.64 crore from the recent auctions, much lower than the Rs 28,000 crore that it was expecting on the basis of reserve price of total spectrum put to auction at the rate of 8 blocks per circle.

Airtel, Vodafone & Idea want part of CDMA spectrum for GSM tech
AGENCIES Posted: Sunday, Nov 25, 2012 at 1544 hrs IST

New Delhi: Bharti Airtel, Vodafone and Idea Cellular have demanded allocation of a part of CDMA spectrum in 800 Mhz band for GSM services. "We recommend that the 800 MHz spectrum band is harmonised with the international band plan to become part of an "extended" 900 MHz band; this will increase the availability of spectrum in the 900 MHz band by up to 10 MHz (or over 40 per cent)," said a letter written by the three companies to DoT. The letter is signed by Bharti Airtel CEO (India and South Asia) Sanjay Kapoor, Idea Cellular Managing Director Himanshu Kapania and Vodafone India MD and CEO Marten Pieters. At present, airwaves frequencies in 900 Mhz band are used for transmitting signals for GSM mobile services. The reach of signals transmitted in 900 Mhz band is around twotimes more than that transmitted in 1,800 Mhz band, for which the government had fixed a base price of Rs 14,000 crore for 5 mhz pan-India spectrum in the recent auction. Telecom operators prefer 900 Mhz band as they need to deploy less telecom towers compared to that in 1800 Mhz band. The CDMA spectrum provides more coverage than 900 Mhz band but business ecosystem for CDMA business is not well developed compared to GSM services. The three GSM operators have demanded to earmark airwaves frequencies from 880 Mhz onward for GSM players instead of current practice of allocating it from 890 Mhz onward. "With the diminishing interest of operators in CDMA and the reducing subscriber base of the technology, we believe that we need to harmonise and reconfigure the existing Indian CDMA band in line with the global practice," the letter said. The telecom companies added that it will lead to optimum utilisation of 800 Mhz spectrum and "the Government will also be able to generate revenues that were denied due to the absence of bidders for the 800 MHz spectrum during the auctions." Government had fixed price of 800 Mhz spectrum at 1.3 times higher than that for 1800 Mhz band. The GSM telecom majors said, "the Reserve Price for this 800 Mhz band is kept at reasonable level in congruence to the market realities and all existing Operators be allowed to bid." Government may re-auction 800 Mhz band by March 2013.

Telecom industry growing at 31%: Govt

AGENCIES Posted: Friday, Nov 23, 2012 at 1612 hrs IST

New Delhi: The government today said communications industry has been growing at an annual average growth rate of 31.07 per cent during the last three years with total number of telephone connections rising to 95.14 crore at the end of March 31, 2012. "The total number of telephone connections have increased to 951.35 million as on March 31, 2012 from 429.73 million as on March 31, 2009," Minister of State for Communications and IT Milind Deora said in a written reply to Rajya Sabha. He said the industry grew at 44.57 per cent in 2010, 36.22 per cent in 2011 and 12.40 per cent in 2012. "The annual average growth rate during the last three years is 31.07 per cent," Deora said. On a query if the expansion of industry is dependent on supply of imported equipment, Deora said presently, wireless equipment with sufficient value addition are not being manufactured in the country. However, to promote telecom equipment manufacturing within the country, the government has taken various steps. The National Telecom Policy-2012 has the objective to provide preference to domestically manufactured electronic products in procurement, consistent with WTO commitments. The government proposes to give 50 per cent to 100 per cent preferential market access for domestically manufactured telecom equipment with minimum value addition of 25 per cent to 65 per cent, he said.

GSM operators add 240,000 subscribers in Oct: COAI

AGENCIES Posted: Thursday, Nov 22, 2012 at 2145 hrs IST

New Delhi: Arresting the two-month fall, total subscriber base of GSM operators rose by about 240,000 to 671.91 million users in October, telecom industry body COAI said today. The total subscriber base at the end of September was 671.67 million users. In September, the subscriber base had reduced by 1.9 million users following a whopping 7.1 million fall in August.

Top three operators -- Airtel, Vodafone and Idea -- which account for about 68 per cent of the GSM market, added over 1.2 million users in October, according to the COAI data released today. However, Uninor and Videocon lost 1.1 million users and 59,151 users, respectively in October, 2012. The subscriber base of Uninor stood at 41.03 million, while that of Videocon stood was at 4.39 million by the month end. Bharti Airtel, which has 27.74 per cent market share, added about 490,000 users to take its subscriber base to 186.41 million. Vodafone India and Idea Cellular added about 480,000 users and 230,000 million users, respectively. With this, Vodafone's subscriber base stood at 153.14 million, while that of Idea Cellular was at 115.70 million at the end of October. Aircel added 170,000 users, taking its subscriber base to 66.78 million in October. State-run MTNL, which operates in Delhi and Mumbai, added 13,652 users in the said month. Another PSU BSNL and private operator Loop Mobile failed to add any subscriber, according to the data.

Cabinet approves $5.7 bln mobile airwave surcharge

08/11/12 By Devidutta Tripathy and Nigam Prusty NEW DELHI (Reuters) - The cabinet approved a plan to levy a $5.7 billion surcharge on airwaves held by long-established telecommunications operators that will hit market leaders Bharti Airtel and Vodafone's local unit and two state-run carriers the most. A ministerial panel had proposed to the cabinet that GSM-based carriers be asked to pay for airwaves beyond 4.4 megahertz at an auction-determined price, while CDMA carriers pay for holdings beyond 2.5 megahertz, for the remaining validity of their permits. On the top of that, it had also suggested that GSM-based carriers who have more than 6.2 MHz of airwaves should also pay a retroactive fee for the extra airwaves for the period between July 2008 and December this year. The telecommunications minister has said the surcharges being proposed are aimed at creating a level playing field between old and new operators.

"Both GSM and CDMA would be charged, that is decided," said a government minister, who declined to be named, adding that the Department of Telecommunications would determine the basis for charging spectrum held by CDMA operators. India, which traditionally bundled airwaves with telecom permits and charged just about $300 million for all India permits, is for the first time auctioning off second-generation airwaves after a scandal over a state grant process in 2008. The telecommunications ministry had planned to hold two separate auctions for airwaves used by GSM and CDMA-based mobile phone carriers hoping to reap a combined 400 billion rupees to plug a high fiscal deficit. The government has set a base price of 140 billion rupees for 5 mega hertz of GSM airwaves in all the 22 zones, more than seven times what companies paid in the 2008 grant process. The base price of CDMA airwaves had been set 1.3 times the GSM airwaves. But India has been left with no bidders for the CDMA part of the auction after Tata Teleservices and Videocon Telecommunications dropped out of the sale.

Telenor, Tata Teleservices reportedly mulling a merger

Submitted by Gaurav Mehra on Wed, 11/28/2012 - 15:58.

Norway-based telecom giant Telenor ASA is reportedly pursuing discussions with Tata Teleservices Ltd to merge their Indian operations. Three people familiar with the situation revealed that Telenor and Tata Teleservices Ltd are mulling proposal to combine their operations in India, and create a bigger entity to better compete with rivals. One of the three people, who were speaking on the condition of anonymity as the information was confidential, added that Japanese telecom firm NTT DoCoMo, which holds a 26% stake in Tata Teleservices Ltd, would likely retain a stake in the combined entity also. India has so far remained a very challenging market for Telenor, and the reported merger could help the Norwegian telecom firm to gain a better position in the market.

Thomas Nielsen, an analyst with Oslo-based Pareto Securities ASA, said, "Some type of merger there would help, if it's allowed, as they could utilize their size to get a better position in the market." However, people with direct knowledge of the matter added that any merger would depend on new takeover rules that are currently being mulled over by the Telecom Regulatory Authority of India (TRAI).

RBI relaxes overseas borrowing rules for telecom companies

Submitted by Harish Dhawan on Tue, 11/27/2012 - 16:15.

The Reserve Bank of India has tweaked the external commercial borrowing (ECB) rules for telecom companies to enable them garner funds to pay for the 2G spectrum allocation. Relaxing its external commercial borrowing (ECB) policy for the telecom companies, the central bank said that successful bidders at the 2Gspectrum auction would be permitted to refinance the rupee loans taken for making the payment for the spectrum by raising long-term ECBs. Telecom companies will be permitted to avail ECBs from their parent companies without any maximum ECB liability-equity ratio. However, the relaxation will be subject to the condition that the lending company owns minimum paid-up equity of 25% in the borrower firm. In addition, the bidders will also be allowed to take short-term loans from foreign companies for making upfront payment for the 2G spectrum and replace the short-term loans with a long-term ECB. However, the central bank also made it clear that the ECBs would have to be raised within eighteen months of the sanction of the rupee loan. The bank also declared that the relaxations in respect of the ECBs would applicable only to the winning bidders in the forthcoming 2G spectrum auction.

The RBI said in a statement, "The relaxations in respect of the ECB liability-equity ratio. refinancing of Rupee loans and bridge finance are part of a special dispensation applicable only to the successful bidders in the upcoming 2G spectrum auction." The deadline for making payments for the 2G spectrum is December 1, 2012.

Telecom operators to cut freebies and talktime to improve margins

Submitted by Gaurav Mehra on Thu, 11/22/2012 - 23:14.

Several major telecom operators in India are looking to enhance revenues by slashing freebies and talk-time that come with discount vouchers, which are used by prepaid customers. The telecom service providers are looking to improve sales and margins as they face stagnating earnings in the country. According to latest data, 96 percent of India's 906 million mobile connections are subscribed to prepaid plans. Most of the prepaid users rely on discount vouchers that make up 70 percent of the telecom service providers' revenues. However, the revenues have remained stagnant for the previous years, according to a new media report published on Thursday. Bharti Airtel, Idea Cellular, Vodafone India, Tata Teleservices, and Aircel have silently changed discount vouchers for prepaid customers to improve revenues. However, this time the increase will be different to earlier rises when companies raised call rates in select telecom zones and gradually extended it to the whole country. Bharti Airtel cut down the validity date for discount vouchers, Cellular raised the price of a discount voucher in Maharashtra and Vodafone in Kolkata slashed the number of free minutes.

The Indian Telecom Services Performance Indicators April - June, 2012

The number of telephone subscribers in India increased from 951.34 million at the end of Mar-12 to 965.52 million at the end of Jun-12, registering a growth of 1.49% over the previous quarter as against 2.68% during the QE Mar-12. This reflects year-on-year (YO-Y) growth of 8.98% over the same quarter of last year. The overall Tele-density in India has reached 79.58 as on 30th June, 2012. Trends in Telephone subscribers and Teledensity in India

Subscription in Urban Areas grew from 620.53 million at the end of Mar-12 to 621.76 million at the end of Jun-12, however Urban Teledensity slightly declined from 169.55 to 169.03. Rural subscription increased from 330.82 million to 343.76 million, and Rural Teledensity increased from 39.22 to 40.66. Share of subscription in Rural areas out of total subscription increased from 34.77% at the end of Mar-12 to 35.60% at the end of Jun-12. About 91.30% of the total net additions have been in Rural areas as compared to 62.39% in the previous quarter. Rural subscription growth rate decreased from 4.91% in QE Mar-12 to 3.91% in QE Jun-12, and Urban subscription growth rate declined from 1.53% in QE Mar-12 to 0.20% in QE Jun-12.

Composition of Telephone Subscribers

With 14.92 million net additions during the quarter, total wireless (GSM+CDMA) subscriber base registered a growth of 1.62% over the previous quarter and increased from 919.17 million at the end of Mar-12 to 934.09 million at the end of Jun-12. The year-on-year (Y-O-Y) growth rate of Wireless subscribers for Jun-12 is 9.67%. Wireless Teledensity increased from 76.00 at the end of Mar-12 to 76.99 at the end of Jun-12. Wireline subscriber base further declined from 32.17 million at the end of Mar-12 to 31.43 million at the end of Jun-12, bringing down the wireline Teledensity from 2.66 at the end of Mar-12 to 2.59 at the end of Jun-12. Internet subscribers increased from 22.86 million at the end of Mar-12 to 23.01 million at the end of Jun-12, registering a quarterly growth rate of 0.66%. Top 10 ISPs together hold 94.72% of the total Internet subscriber base. Number of Broadband subscribers increased from 13.81 million at the end of Mar-12 to 14.57 million at the end of Jun-12, registering a quarterly growth of 5.49% and Y-O-Y growth of 17.97%. Share of Broadband subscription in total Internet subscription increased from 60.4% at the end of Mar-12 to 63.31% at the end of Jun-12. 82.68% of the Broadband subscribers are using Digital Subscriber Line (DSL) technology.

Trends in Internet/Broadband subscription

Monthly Average Revenue Per User (ARPU) for GSM service declined by 1.94%, from `97 in QE Mar-12 to `95 in QE Jun-12, with Y-O-Y decrease of 2.11%. MOU per subscriber per month for GSM service remained almost at the same level as in the previous quarter i.e. 346. The Outgoing MOUs(167) increased by 0.04% whereas Incoming MOUs (178) declined by 0.19%. Monthly ARPU for CDMA full mobility service slightly declined by 0.50%, from `75.3 in QE Mar-12 to `74.9 in QE Jun-12. ARPU for CDMA has increased by 16.31% on Y-O-Y basis. The total MOU for CDMA per subscriber per month declined by 0.31%, from 229.3 in QE Mar-12 to 228.6 QE Jun-12. The Outgoing MOUs (115) declined by 1.57% whereas Incoming MOUs (114) increased by 1%. Gross Revenue (GR) and Adjusted Gross Revenue (AGR) of Telecom Service Sector for the QE Jun-12 has been `52512.10 Crore and `35499.01 Crore respectively. There has been an increase of 6.64% in GR and an increase of 3.02% in AGR as compared to previous quarter. The year-on-year (Y-O-Y) growth in GR and AGR over the same quarter in last year has been 11.99% and 8.93% respectively. Pass-through charges accounted for 32.40% of the GR for the quarter ending Jun-12. The quarterly and the year-on-year (Y-O-Y) growth rates of pass-through charges for QE Jun-12 are 15.06% and 18.96% respectively.

Average license fee as percentage of AGR is 8.28% in QE Jun-12. The quarterly and the year-on-year (Y-O-Y) growth rates of the average license fee for QE Jun-12 are 3.11% and 8.96% respectively. Access services contributed 76.00% of the total revenue of telecom services. In Access services Gross Revenue, AGR, License Fee & Spectrum Charges increased by 3.77%, 2.98%, 3.10% & 2.32% respectively in the quarter ending Jun-12 vis--vis previous quarter. Monthly Average Revenue per User (ARPU) for Access Services based on AGR increased from ` 97 in QE Mar-12 to ` 98 in QE Jun-12. Composition of Gross Revenue

The performance of wireless service providers in terms of QoS during the quarter vis-vis that in previous quarter is depicted as under: Parameters showing Improvement in QoS TCH Congestion Parameters showing deterioration in QoS Parameters showing no change in QoS

Worst affected BTSs due BTSs Accumulated to downtime downtime (not available for Worst affected cells service) having more than 3% TCH SDCCH/Paging Chl. drop (call drop) rate Congestion Call Set-up Success Rate (within licensee's own Time taken for refund of Call Drop Rate network) deposits after closures Metering and billing Connection with good Point of Inter-connection credibility - post paid voice quality (POI) Congestion (No. of POIs not meeting the Metering and billing Resolution of billing/ benchmark) credibility - pre paid charging/ validity complaints Accessibility of centre/customer care call %age requests for Period of applying credit/ Termination /Closure of waiver/ adjustment to service complied within 7 customers account from the days date of resolution of complaints. %age of calls answered by the operators (voice to voice) within 60 sec.

The performance of wireline service providers in terms of QoS during the quarter vis-vis that in previous quarter is depicted as under: Parameters showing Improvement in QoS Parameters showing deterioration in QoS Parameters showing no change in QoS

Call Completion Rate % faults repaired by next Faults incidences ( No. of (CCR) working day faults/100 Subs./month) Metering and credibility - post paid billing % faults repaired within 3 Answer to Seizure Ratio days (ASR)

Period of applying % faults repaired within 5 Point of Interconnection credit/waiver/ adjust-ment to days (POI) Congestion customers account from the date of Mean Time to Repair resolution of complaints. Accessibility of centre/ customer care (MTTR) Resolution of billing/ charging/ validity complaints

call % of calls answered by the operators (Voice to Voice) within 60 Sec Time taken for refund of deposits after closures. %age requests for Termination / Closure of service complied within 7 days.

The progress and the changes in telecom have been astronomical, with new and cheaper technologies taking birth almost each year. With an addition of 18 million subscribers every month and contributing to nearly 2% of the Indian GDP, Indian telecom industry is considered to be the largest telecom markets of the world. Driven by wireless communication, the telecommunications industry is recognized as a key to the rapid growth and modernization of the economy and an important tool for socio-economic development for a nation. Overview Most of the telecommunications forms in India are as prevalent or as advanced as those in modern Western countries, and the system includes some of the most sophisticated technology in the world and constitutes a foundation for further development of a modern network. Telecom Regularity Authority of India (TRAI) is the sole authority empowered to take binding decisions on fixation of tariffs for provision of telecommunication services. India has the world's second largest mobile phone users with over 903 million as of January 2012. It has the world's third largest Internet users with over 121 million as of December 2011. India has become the world's most competitive and one of the fastest growing telecom markets. Key developments Telecom Regulatory Authority of India (TRAI) has revealed that the country's mobile subscriber base has increased from 893.84 million in December 2011 to 903.73 million in January 2012. Telecom operators added 9.88 million mobile subscribers in January 2012. The overall tele-density reached 77.57 per cent. Broadband subscriber base increased from 13.30 million at the end of December 2011 to 13.42 million at the end of January 2012. Telecom users in rural areas have grown at a faster pace compared to their urban counterparts in the last five years, a CAG report said. India added around 20 million subscriptions of the estimated 140 million net additions in mobile subscriptions across the world during the April-June quarter in 2012, said a report by Ericsson. The telecom sector is a very capital intensive sector and involves high value investments. Correspondingly, the mobile phone industry is also experiencing a parallel upward surge, and a parallel enhancement in technologies used. With the liberalization of the Indian economy, the telecom sector has become very attractive for mergers and acquisitions latest being SingTel increasing its stake in Bharti telecom. Employment Opportunities According to analysts, the sector would generate employment opportunities for about 10 million people direct employment for 2.8 million people and indirect employment for about 7 million. The total revenue of the Indian telecom sector grew by 7% to 283,207crore (US$ 56. 5 billion) in 2011, while revenues from telecom equipment segment stood at 117,039 crore (US$ 23. 35 billion). Energy saving initiatives With an ambition to be diesel free by 2020, telecom companies are retrofitting their towers every year. Many telecom tower companies currently use renewable energy sources such as solar, biogas and wind besides hydroelectric power, for individual towers. Bharti Airtel, one of the largest telecom service providers in India, has been testing and implementing various energy saving options for the last two-three years. Additionally, the e-bill initiative is estimated to save as many as 24,000 trees a year. Value addition by VAS Some of the recent developments in this area are M-Commerce, focus on localization, availability of content in vernacular languages and availability of mobile TV. The expected revenue from VAS will be around US$ 4.0 billion by 2015. Some of the major growth drivers of the sector are: Two major factors responsible for the growth of telecommunications industry are use of modern technology and market competition. The growth of Indian telecommunication sector is highly driven by supportive government policies, emerging new technologies and changing consumer behavior. Drastically reduced call rates and mind-blowing technologies like 3G, Android and advent of innovative products like iPhone, Galaxy tab, it is natural to expect further developments in this space in the coming years. Undoubtedly, smartphones are going to rule the future handset market and is forecasted to achieve a shipment of 77.5 million by 2015 in the Indian market.

Challenges ahead The metro cities and the urban markets are quite saturated in terms of tele-density and thus, leaving very little scope in terms of new customer acquisition. Lack of proper telecom infrastructure, power shortage and lack of trained manpower are some of the challenges which telecom companies have to cope with. To conclude Telecom Industry in India is out of its nascent stage and the government together with the private sector initiatives is on the path of making India the electronics manufacturing hub of the world. 10 years ago subscribers were made to pay for an incoming call; today they have the liberty to pay for per second of their usage. We, definitely, have come a long way! By Ankita Sethi

Aircel Cellular LimitedAishwarya Telecom LtdAksh Optifibre Ltd.Anco Communications Ltd.Astra Microwave Products Ltd.Avaya Globalconnect Ltd

Bhagyanagar India Ltd.Bharti AirtelBharti TeletechBirla Ericsson Optical Ltd.

Cable Corporation of India Ltd.CMI Ltd.Cybele Industries Ltd.

Delton Cables Ltd.Dhanus Technologies Ltd.

Eider Infotech Ltd.EricssonEsskay Telecom Ltd.

FCI OEN Connectors Ltd.Finolex Cables Ltd.

Gemini Communications Ltd.Goldstone Infratech LtdGR Cables Ltd.GTL Infrastructure Ltd.Gujarat Optical Communication Ltd.

Hartron Communications Ltd.Hathway Bhawani Cabletel & Datacom LtdHFCL Infotel LtdHimachal Futuristic Communications Ltd.Hindustan Cables Ltd.

Idea Cellular Ltd.Intergrated Digital Info Services LtdITI LtdITI Ltd.

Kaleidoscope Films LtdKavveri Telecom Products Ltd.Krone Communications Ltd.

Mahanagar Telephone Nigam LtdMIC Electronics Ltd.Mobile Tele Communications LtdMotorolaMP Telelinks Ltd.Munoth Communication Ltd

Nelco Ltd.Nokia IndiaNokia Siemens NetworksNortelNu Tek India Ltd

Optel Tecommunications Ltd

Paramount Communications Ltd.Precision Electronics Ltd.Punjab Communications Ltd.

Qualcomm India

Reliance Communications Ltd.RPG Cables Ltd

Shyam Telecom LtdSouthern Online Bio Technologies LtdSpice Communications Ltd.Spice Mobiles LtdSterlite Technologies Ltd.Sujana Towers LtdSurana Telecom & Power LtdSurana Telecom Ltd.

Tamilnadu Telecommunications LtdTata Teleservices (Maharashtra) Ltd. TataCommunications Ltd Telecom Regulatory Authority of India Telecommunications Consultants India Ltd. Telephone Cables Ltd. Telephone Cables Ltd. Tulip Telecom Ltd

Valiant Communications Ltd. Videsh Sanchar Nigam Ltd. Vindhya Telelinks LtdVodafone Group Plc

XL Telecom & Energy Ltd.