Current trends in telecom industry

Telephones or mobiles have become a integral part of our life, its reached such a limit that we cannot even think of a life without phones. Cellular technology is at its peak now and its still growing. It started with the First Generation technology and now it has reached the Fourth Generation popularly called as 4G Technology. Telecom sector, unlike other sectors has shown the highest growth in terms of competition, benefit for end users, and pricing, social policies, etc. In the post, we would like to share current happenings in this industry. Top trends: New players entering rural markets:

Although biggies like Airtel, BSNL and Reliance leading in the race to access rural markets, smaller players are not behind. In past few months, DoCoMo witnessing the biggest jump in proportion of subscribers coming from the rural areas (increased from 10% to 18% in one quarter). Even Uninor, albeit on a smaller subscriber base, has a relatively high proportion of subscribers coming from the rural areas at 34%. Aircel is the only operator whose proportion from rural areas has actually gone down. Prepaid tariffs 40% lower than Postpaid:

The competition in terms of pricing has become intense. More number of players, per second plans has reduced the pre-paid rev/min saw a sharp fall from 76p/min in Mar-09 to 55p in Mar10; a fall of 30%. Post revenues are relatively stable as of now. The reason is that incumbents (majority of postpaid subscribers) right now have no incentive to cut tariffs as MNP and 3G will take some time. However this segment is too going to witness pressure in terms of tariffs Multi-Sim usage is hitting the industry:

If you look at the table below, many of the circles have more than 100% teledensity. Even C category circles like Bihar and Orissas urban penetration is also at 130% (national average at 120%). This is mainly due to multi Sim usage which is facilitated by handsets and sometimes due to attractive tariffs. The switching cost in this case is negligible. State Wise Tele-Density

3G:

With 3G finally surfacing on the Indian telecom horizon, giving way to 5 MHz of extra spectrum to 9 successful operators, customers were promised an end to the inconsistent voice network, and additionally provided with a plethora of data applications like live mobile TV, video calling, video and music streaming, video conferencing, and much more.GSMA India has come out with a report that puts forth some interesting growth numbers for mobile Broadband connections in India. According to the press release India is slated to become 2nd largest Mobile Broadband market globally in next four years with 367 million Mobile Broadband connections by 2016. With those kinds of numbers, India will overtake the US and will be second only to China who are expected to have a whooping 639 million mobile broadband connections. The report states that 3G connections, currently at 10 million, will grow exponentially by 900 percent, to touch 100 million by 2014. With those numbers India will become the largest HSPA market, surpassing China, Japan and the US in the process. Full VOIP services in India:

The much need Voice over Internet (VOIP) services have been approved by the Indian Telecom Commission and will be released in National Telecom Policy 2012 as per Mint, who have reviewed an internal DoT memo in regards to this. Once the VOIP services are implemented, mobile or landlines users can make calls from normal telephones over the internet to another telephone in India or abroad. With VOIP, the voice call rates, especially international, are expected to drop further. Given that local mobile or landline calls are already quite cheap in India, those rates may not see much of a change Currently, in India, Voice over internet is only allowed in a restricted manner, where a user can either make calls from his computer outside India or receive calls on his/her Computer. Internet calls cannot be terminated on a landline or a mobile phone with some exceptions. Current trends in rules and regulations: Vodafone decides to disconnect mobiles inactive for 60 days: This announcement will affect millions of Vodafone users, especially the ones who have picked up Lifetime Validity connections. Currently they need to only make a single phone call in six months to keep the number active. However, going forward the will have to use it within 60 days to ensure that their number is not disconnected. New Mobile connections may take 6-7days for activation: Indian Security agencies have proposed new guidelines to be followed by Telecom Operators for new customer acquisition. The new guidelines propose that customer verification has to happen fully before the sim card is activated. These were formulated keeping in mind the national security concerns, where anti-social elements may take

advantage of this process. If the guidelines get implemented, new connections may take as much as 6-7 days to get activated One Second Billing mandatory for Telecom Operators: TRAI TRAI has released an amendment to the Telecommunication Tariff Order, 1999, that has now made it mandatory for all Telecom Service providers in India to offer per second billing. Although, most providers already have it, there was no rule making it mandatory for them to offer one second billing to mobile subscribers. TRAI Increases Processing Fee, Now Pay Rs. 1 more For Every Mobile Recharge above Rs. 20. Indias prepaid mobile service subscribers now will have to pay an extra Rs. 1 every time they recharge or Top-Up their prepaid account for more than Rs. 20. This appears to be a setback for more than 90% mobile service users in the country. Indias telecom watchdog Telecom Regulatory Authority of India (TRAI) has today issued amendments to the Telecommunication Tariff Order (TTO) enhancing the ceiling or processing fee from Rs. 2 to Rs. 3 for certain category of top-up vouchers used by mobile prepaid subscribers for addition of monetary value (talk-time) to their account. Current trends in Value Added Services (VAS): RCom launches VAS initiative, To Deliver Comics to Its Subscribers: RCom has been actively pursuing the VAS space with its interesting offering for its subscribers.It had earlier launched a subscription based model for delivering Novels via mobile phone. Now, it is planning to deliver comics to its GSM subscribers.RCom has partnered with none other then Carton Network to provide comic strips of kids favourtie characters Ben 10, Johnny Bravo, Dexters Laboratory, Powerpuff Girls and Archies. The service is priced at a modest 1 Rs per day for a single comic strip which will have a text and visual section Airtel to bring 4G mi-fi device for Indian consumers: Airtel became the first Indian telecom operator to launch 4G (4th Generation in Mobile Network Technology) services when it was launched in Kolkata on Tuesday. 4G services are based on LTE (Long Term Evolution) technology which is capable of offering speeds of upto 40 mbps, three times that of 3G. The services will soon be expanded in phased manner in the places that Airtel has won the licenses.