Finally Green Signal to 3G Auction

30 10 2009

Finally, there’s some good news coming from DoT, who is likely to auction the 3G spectrum in New Year. This has been announced recently, in a memorandum released by DoT and likely date of auction would be 14 Jan; if all goes well.

So after settling down the differences with FinMin, & good amount of negotiations with Cabinet Ministers, DoT has finally given green signal to 3G auction. Certainly, the Telecom Minister A. Raja is more than careful this time, after political maneuvers started pulling his legs over 2G Spectrum Scam, in recent time.

According to memorandum released, there will actually be three separate auctions for three different frequency bands: 2.1 GHz, 800 MHz, and 2.3 GHz. The first auction, which will start on January 14, will be for up to 20 MHz of paired spectrum in the 2.1 GHz band, referred to as the “3G auction.” Then two days after that auction ends, the auctions for 800 MHz and 2.3 GHz will start. The 2.3 GHz auction, called the “Broadband Wireless Access (BWA) auction,” will include two blocks of 20 MHz of unpaired spectrum, which is suitable for WiMAX.

There’s lot of hype surrounding the 3G auction in India and many players have debated over the need & RoI on 3G rollouts. According to one estimate, there are likely to be 90 million 3G subscribers in India by the end of 2013. It is also believed that 3G will open more channels of revenue generation for telecom operators in India, who are struggling to contain falling ARPU figures and revenue loss. According to this Business Standard report, even Google might look BWA spectrum as entry point into lucrative Indian Telecom Market. Whatever is the business associated with 3G/BWA, we hope that these NGN technologies will help Indian masses in communicating better and cost effective way- the long cherished dream of DoT.

No Per Second Billing- Please!

7 10 2009

The latest Buzzword in Indian Telecom Fraternity is ‘Pay-Per-Use’ or ‘Per Second Billing’. After successful launch of its services across few circles, certainly Tata DoCoMo is riding high on success. Other Indian Operators like MTS & Aircel also eagerly joined the stream to offer the billing plans in few selected circles. And now reports say that TRAI will soon launch the consultation paper on the subject, with no timeline for new billing regulation set yet. Wow! That’s certainly interesting!

Why are we so impatient about Per Second Billing?  The offering is certainly attractive for consumers who are willing to pay the money as per their usage. But then should regulator seek urgent notice and issue consultation paper on the subject within two months?

In latest interview to ET, Mr. Sunil Bharti Mittal reportedly said that already the tariffs offered in India, have hit rock bottom and there is little room to lower the tariff prices further (It should make economic sense after all). But what is happening around is exactly opposite of what is expected. Innovation much beyond the necessity in tariffs had already hampered the prospects of improvement in revenues for telcos and with pay per use getting implemented, the picture seems gloomy.  With pay per use tariff in offering, it is believed that the annual revenues may further fall by 10-15% and already telcos stocks have stumbled down (Reliance’s ‘Simply Reliance’ failed to create magic ), then why are telcos running after it? Only too woo customers in deeply fragmented market or trying to make differentiating point to grab attention?

With already close to ten operators operating in most of the telecom circles and new to join soon, prospect of per second billing looks bright for new operators, who can only bargain on price differentiator. With less congested network and superior portfolio of VAS services DoCoMo may sustain the losses in revenue, provided they manage to sell their services to enough subscribers with price differentiator tag. That’s the trick for new telcos to think about, but then when regulator joined the speculations it will have some wider impact than mere tariff competition.

Should we leave the tariff to operators to decide and let the market play the catalyst for innovation in offerings, than regulator come in and force it? After all Telecom is a service industry where looking beyond just revenues figures mayn’t possible in current scenario (MOU or Customer Acquisition Cost may highlight the boardroom discussions), but then what should have been priorities for regulator. Telecomblogs, in a highly popular article earlier, said that we have already few things in pipeline to look after and certainly Per Second Billing isn’t among them.

With 3G/WiMAX spectrum auction getting delayed, and only 6 million broadband connections in India, there are enough challenges ahead to address on priority. With existing urban circles coming close to saturation point, release of extra 2G spectrum may ease the tension lingered around QoS for majority of telcos in ring. Had regulator shown such urgency to said issues, we would have seen better picture ahead. Bringing competition in market is okay and making it level playing field would benefit in long terms, but then are regulator concerned about rural tele-density figures or digital divide? Where shall telcos bring money from for rural rollouts? Don’t just rely on USO fund amount; regulator is wary of pictures shown. Telcos are already forced to diversify from their core competence (Voice Telephony), to look for new sources of revenues and many of the existing operators are offering wide range of services in their bucket. What impact will we see on service diversification in coming months? We may get to see some positive impact on service diversification front to compensate for drop in voice ARPU figures, but then why regulator isn’t bargaining for cheaper broadband rates? When shall we get to see cheaper data/VAS services? Will new billing regulation bring negative impact on prices of VAS services offered? Will newly added subscriber figures will compensate for falling ARPUs? Certainly, as said some of the telcos mayn’t be concerned about new offerings, but they even can’t ignore it too.

Per second billing isn’t what we expect from TRAI to issue a consultation paper about. As said earlier too, just look beyond and act wisely. After all looking for short term gains for the sake of long term benefits isn’t expected from regulator. TRAI, Please act wisely!

Broadband Quality Score- The Term You Should Know!

5 10 2009

Recently, Telecomblogs came across a report by Said Business School, Oxford University on Global Study of Broadband Quality. The highly acclaimed report is based on last year’s Cisco sponsored study of the development of Broadband Quality Score- a index that combines the key performance parameters to measure the quality of broadband connection. Below are some of the key findings of the study:

  • The broadband quality is linked to social and economical benefits, and the countries with high broadband quality have broadband on their national agenda.
  • Investments in fiber and cable upgrades improve broadband quality.
  • The identified main BQS factors are Download and Upload Throughput, latency, packet loss, network oversubscription, jitter etc.
  • Though currently, social networking, basic video chats etc are driving broadband services, in future Visual networking, HD IPTV and large file sharing will drive the growth.
  • Education and Fiber upgrades drive the broadband quality to higher end leading to generation of knowledge economy; GDP/Per capita, PC/Per capita etc drive broadband penetration to higher end leading to competitiveness and innovation economy.
  • BQS are calculated based on normalized values of UL, DL Throughput and latecy and based on those calculated BQS, Central and E. Europe topped chart of Avg BQS/Region at 38 followed by W.Europe (35) and N.America (34).
  • Korea has highest BQS (66), followed by Lithuania (54) (I guess you heard the name of this Baltic Country before) and Bulgaria (49), while two global powers China and India ranked 49th and 62nd(Among last five) in the study. Surely, we don’t have a national broadband plan and telecomblogs doesn’t see any chance occurance of it in near future. (Read me at SiliconIndia about my vision on National Broadband Plan-2020)

The study also gives recommendations to key stakeholders, like Governments, Policy makers for setting national broadband agenda (US is Best example of this) for penetration and quality, and for service providers it advises on building a broadband business model based on quality as key differentiator (Unlike only advertising Downlink speed). Lots of learning though; we expect least changes in scenario till NGN Spectrum license is awarded.