TELECOM MARKET UPDATE

August witnessed a net addition of 15 millions new mobile subscribers. With this, the total mobile subscriber base crossed 450 millions. 73% of these new connections were activated in Circles A and B while the Metro Circles accounted for 12% and ‘C’ Circles accounted for 15%.

Tamil Nadu emerged with the maximum share of net additions - 1.3 millions in August 2009. Andhra Pradesh and Karnataka accounted for net additions of 1.24 million and 1.21 million subscribers respectively.

Almost 3.4 millions of these new activations were of Tata Teleservices while Airtel managed to add 2.8 millions and Vodafone 2.2 millions.



The Journey to 450 millions

Total subscriber base grew by 50% from August '08 to August '09. Interestingly ‘C’ Circles grew at a higher pace (73%) to reach 55 million subscribers by the end of August '09. In this period Metro circles grew by 37%, ‘A’ circles by 47% and ‘B’ circles by 53%.

This accelerated growth is closely related to the usage of multiple connections. As per Market Pulse research, almost 29% of new mobile connection buyers purchase a new connection as an add-on. This research also reveals that on average each subscriber has 1.29 connections. Well then the question is, how much do they spend on mobile service? On an average, every subscriber spends almost Rs 239 per month.

Performance of New Entrants

Aircel added 1.3 million mobile connections in August 2009 and grew to a total of 24 millions. Aircel registered 43% share of net adds in North East followed by J&K (42%) and then Assam at 39%.

In Maharashtra, Aircel has been able to garner a base of 35434 mobile users in a span of 3 months.

Sistema Shyam TeleServices: Total population of SSTL subscribers has more than tripled to 1.73 million in Aug 2009. They continue to do well in Kolkata and WB with 14.1% and 15.9% share of net additions.

Tata Teleservices: DOCOMO has dominated the net additions wherever it has been launched. In Chennai 62% of new subscribers purchased DOCOMO; similarly in Karnataka, it picked up 57%, Kerala - 37%, MP - 33%, Maharashtra - 46%, West Bengal - 33% and Orissa - 45% of the net additions.

TELECOM MARKET NEWS & EVENTS

US telecom giant AT&T is learnt to have approached public sector Bharat Sanchar Nigam (BSNL) for investing in the Indian behemoth to re-enter the world’s fastest-growing telecom market.

The PSU is fully owned by the government, which is planning to take the company public, though no time-frame for this has been given yet. BSNL’s net worth works out to Rs 81,000 crore, based on the balance sheet for FY08.

Global mobile vendors face the heat

The government plans to revive an earlier proposal where all foreign telecom equipment vendors will have to pass stringent security tests in a government-controlled test bed for every product before selling it to any operator in the country.

The proposal may be a compromise solution to address security concerns associated with Chinese vendors, such as Huawei and ZTE, who are walking away with bulk of new supply deals signed in the telecom equipment space. Indian telecom operators have been strongly opposing any move to ban Chinese equipment suppliers.

Few takers for MTNL's 3G bid call

State-owned MTNL's efforts to revive its floundering 3G business with an international partner's help received a muted response, with only Richard Branson’s Virgin Group and BK Modi-owned Spice Group bidding for it, a senior company official said.

MTNL, which dominates fixed-line telephones in New Delhi and Mumbai, invited bids in July to run its 3G mobile services for 10 years, after it got a meagre 1,000 subscribers for the service in the first six months in New Delhi, as it lacked the muscle and marketing strength of private sector rivals. Third generation spectrum, or 3G, refers to high-speed wireless services which facilitate video calling and internet on mobile phones.

India Delays Mobile Number Portability to Year-End

India is to delay the implementation of Mobile Number Portability (MNP) until the end of the year following delays at the networks and the regulator. The operators have faced problems installing the necessary equipment, and the regulator has still to set out the tariffs for the porting service.

The MNP facility was due to be made available at the end of September, but will now launch on December 31st 2009.

A statement from the Department of Telecom reads: "The implementation of MNP is under progress. However, this required customisation and upgradation of the existing network to be capable of providing the MNP service. Certain technical and commercial issues related to it are also being resolved."

High spenders, postpaid subscribers and business subscribers will show a greater tendency to switch if Mobile Number Portability is introduced. Prepaid, low and medium spend users are not motivated to switch. Postpaid subscribers have almost doubled the minutes of usage compared to pre-paid subscribers and the incidence of data application usage is also higher among postpaid and high spenders.

MVNOs likely for both 2G and 3G services

The telecom sector in the country is about to get even more liberalised. The Department of Telecommunications (DoT) is learnt to have decided that the policy on mobile virtual network operation (MVNO) would be applicable to both 2G (second generation) and 3G (third generation) services.

Samsung India bets big on touch screen mobiles.

The Indian subsidiary of South Korean consumer durable major Samsung is betting big on touch-screen mobile phones, targeting a 20 percent value share in the domestic handset market this year.

TARIFF AND PROMOTION

Tata Indicom launched a Pay Per Call Plan. The pack worth Rs 99 offers the following tariff - Local calls @ Re 1, STD @ Rs 3, Validity is 10 years & daily rental Re 1.

MTS India, the CDMA mobile operator announced its MTalk plan that offers local calls at just 1 paisa per second, with 1-second billing, plus full talk-time for a lifetime! STD calls are charged at 2 paise per second. At rentals of just Re.1 per day, customers can also choose to get 50% off on local calls, 50% off on STD calls and 100 SMS every day.

New customers can opt for MTalk plan by buying a SIM for Rs.49/- which includes a talk time of Rs.10/-."

Reliance GSM FRC of Rs 105 has become quite popular with Rs 50 talktime, 50 STD minutes, local calls @ 50 p/min, STD @ Re 1 & tariff validity of 90 days.

All STD calls can be made at 39p to any network across India without any daily rental on their Reliance Mobile. To avail this offer, one has to recharge with Rs. 39 recharge voucher which will provide 100 STD minutes valid for 30 days"

Tata DOCOMO launched Diet SMS where one has to "Pay Per Character". Charges are 1paisa per character with no charge for the spaces between words. Diet SMS can be used for upto 15 character SMS

An attractive GPRS Pack -With DoCoMo recharge of Rs.15, the users will get FREE data usage upto 20 MB valid for 3 days. The normal GPRS tariff of 1p/kb will be applicable post utilization of free usage. The other pack in this segment is Rs.95 GPRS Pack with free data usage of 100 MB. This is a Rs 95 prepaid recharge which will give subscribers FREE data usage upto 100 MB valid for 30 days. Normal GPRS tariff of 1p/kb will be applicable post utilization of free usage.

Bharti Airtel unveiled ‘The Airtel Advantage’ which offers 50 paise per minute on both STD and local calls. An Airtel subscriber can access the Airtel Advantage offer by purchasing the Airtel Advantage Plan from any Airtel retail outlet.

A New Price War - this time it is Idea Cellular, Punjab - The offer entails all local calls at 60 paise per minute and STD at Re 1 per minute for 1 year and in addition, lifelong validity free on recharge of just Rs. 24. The offer is valid for IDEA Punjab subscribers only.

Vodafone - All India- Vodafone launched an attractive scheme whereby regional STD calls can be made @ 50p valid for 30 days.

Aircel –Aircel has finally accepted the GSM market competition and introduced the PAY PER SECOND CALLING PLAN to any network across India without any extra cost for its GSM Mobile subscribers in Kolkata telecom circle.