Airtel, Vodafone, BSNL increase subscriber share while Idea manages to retain
IndusInd Bank was the top loser among Sensex stocks, dropping by 4.38 per cent. SBI declined 2.41 per cent, HDFC Bank 1.77 per cent and Axis Bank fell by 1.5 per cent. Among others, auto, FMCG and power stocks also closed in the red.
Jio's revenue increase was phenomenal in many circles: In Haryana, the RMS gain was 13 percentage points; in Bihar, 20 percentage points; in Odisha, 15 percentage points; and in Assam, 11 percentage points. However, incumbent telcos said this increase was only in three quarters, and it happened because of an order by the Telecom Regulatory Authority of India, which tweaked the definition of significant market player (SMP) for predatory pricing.
Telecom regulator Trai on Monday recommended about 39 per cent reduction in the reserve or floor price for the sale of spectrum for mobile services, including the latest 5G offering, as it looked to match revenue expectations with the industry's paying capacity. With large swathes of spectrum remaining unsold in the last two auctions, the Telecom Regulatory Authority of India (Trai) recommended to the government for selling airwaves in all existing bands of 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2500 MHz and new slots of 600 MHz, 3300-3670 MHz and 24.25-28.5 GHz. It has suggested a lower reserve price for all bands, compared to the prices proposed in the previous recommendations in 2018.
Reliance Jio and Bharti Airtel have enough capacity to absorb over 113.9 million Vodafone Idea subscribers who are on 4G if Vodafone Idea has to shut operations.
The Tata group's tryst with mobile services, with either CDMA or GSM technology, did not really fly, forcing it to close operations and write off losses. Now the group is back in the big game, this time straddling the telecom equipment, network and technology space in India as well as the global market. To this end, it is leveraging the opportunities that flow from 5G technology through open radio access network, or O-RAN. Recently, the Tata Sons' subsidiary Panatone Finvest acquired 43.3 per cent in Bengaluru-based telecom equipment manufacturer Tejas Network for Rs 1,850 crore and announced it would buy another 26 per cent of the voting capital through an open offer.
Telecom operators on Friday said that only increased awareness among people about the "Do Not Call" registry can check the menace of unsolicited calls and SMSes on mobile phones.
Telecom operators are not opposed to over-the-top service providers like Skype, Viber, WhatsApp but looking to work in synergy with them, Bharti Enterprises Vice Chairman Akhil Gupta said on Wednesday.
Telecom Commission approves high base price of Rs 11,485 cr per Mhz for 700-Mhz frequency; no decision taken on proposed standard spectrum usage charges of 4.5%
Jio's disruptive strategy, including free voice services and data at throwaway rates, apart from offering all services free for six months, triggered a consolidation in the telecom sector.
Promoter Vodafone plans to infuse up to Rs 3,375 crore into debt-ridden Vodafone Idea Ltd as part of the company's proposed raising of funds worth Rs 14,200 crore. Besides Vodafone, Aditya Birla Group plans to pump in up to Rs 1,125 crore, according to a regulatory filing on Friday. The telecom operator will seek shareholders' approval for raising up to Rs 14,500 crore as well as increase its authorised share capital to Rs 75,000 crore at its the Extraordinary General Meeting (EGM) to be held on March 26.
Billionaire Gautam Adani's group is said to be planning a surprise entry into the race to acquire telecom spectrum, which will pitch it directly against Mukesh Ambani's Reliance Jio and telecom czar Sunil Bharti Mittal's Airtel, sources said. Applications for participating in the July 26 auction of airwaves, including those capable of providing fifth-generation or 5G telecom services such as ultra-high-speed internet connectivity, closed on Friday with at least four applications. Jio, Airtel and Vodafone Idea -- the three private players in the telecom sector -- applied, three sources with knowledge of the matter said.
According to market sources, Airtel has reduced free minutes by 10 to 25 per cent and has increased price of SPVs in the range of Rs 5 to Rs 15.
'Tinkering will not do. Merely staggering spectrum dues comes nowhere near solving the problem,' cautions Rahul Khullar.
Airtel, Vodafone-Essar favour delinking; Reliance, Tata oppose.
In a relief to the incumbent telecom operators, who have more than 6.2 MHz spectrum, the department of telecom (DoT) on Friday clarified the retrospective fee on spectrum beyond 6.2 MHz would be calculated based on the 2001 auction price, indexed to the prime lending rate (PLR) of a state-owned bank.
While it gives clarity on one regulatory issue, the financial burden increases for the sector.
Bharat Sanchar Nigam Ltd chairman Kuldeep Goyal has been trying to get a foothold in Africa since February this year when the government allowed the state-owned giant to pursue business opportunities in that continent. The five-month old search continues; Goyal says BSNL is looking at acquiring stakes or licences in African markets as and when they are put up for sale.
Telecom operators in India appear to be gung-ho over the prospects of value-added services which help them to differentiate, add substantially to their margins while simultaneously be a precusor to third generation or 3G regime. The recent creative campaigns of majors like Vodafone (ZooZoos), Airtel (R Madhavan and Vidya Balan), Virgin Mobile (music download) and Aircel's (Internet applications) are a case in point.
The DoT is conducting a special audit on companies that have multiple licences -- mobile, international long distance, domestic long distance and internet service provider among others. Contractor, Nayak & Kishnadwala has been appointed to examine the books of Bharti Airtel, while S K Mehta & Co will check Vodafone-Essar's accounts. Varma & Varma has been appointed as auditors for Tata Teleservices, while Chhajed & Doshi will examine the books of Idea Cellular.
BSNL will allow free local and STD calls to other BSNL mobile phone users as well as 100 MB data for seven days for its prepaid users.
The latest telecom war kicked off after some pictures surfaced, showing Airtel banners among agitating farmers. According to the Jio camp, it was a giveaway that farmers were being enticed to port their phone numbers.
Reliance Jio's decision to acquire 700 MHz in combination with the possible use of an advanced standalone (SA) 5G network could give it an edge over its rivals, according to most analysts. The dissenters argue that the stiff price tag touching Rs 40,000 crore to grab 10 MHz of spectrum in 700 to provide coverage for its SA 5G network which offers ultra-low latency (unlike non-standalone or NSA), has a long way to go in India in terms of finding use cases that can be monetised. Globally, 700 MHz is a pivotal band which provides huge coverage, indoor penetration (especially useful in India where walls are thick) and is already considered by the European Union to be the 'pioneer band' for 5G, with 3.5 GHz and 26 GHz, both of which were auctioned in India recently.
The adjusted gross revenue (earnings from sale of telecom services) of the top three telecom companies in India - Bharti Airtel, Vodafone India and Idea Cellular declined by 7.98 per cent, 5.14 per cent and 4.91 per cent respectively during third quarter of 2016-17.
The chipset accounts for over 25%-30% of the cost of an average smart phone. Hence, a reduction in its price, device makers say, will make a huge difference to the cost of a phone.
Samsung's connected technology solutions provider Harman on Wednesday said it has started a 5G testing lab in India to help companies test their devices for operating them on the next generation network. The company said its 5G lab enables a holistic, device-to-cloud performance analysis -- enabling chipset conformance testing, pre-certification testing, network operator approval testing, application performance verification and more. Harman Digital Transformation Services (DTS) senior vice president David Owens said advances in technologies like 5G yield significant opportunity to accelerate innovation across nearly every industry -- from healthcare and manufacturing, transportation to consumer device support.
A rare bonhomie among three private telecom companies in raising tariffs coming on the back of a bailout package by the government may have helped the telecom sector avert a crisis but the challenges haven't ceased to exist as the industry faces a cash-guzzling task of rolling out 5G networks in the coming months. The sector that provides direct and indirect employment to millions is projected to see Rs 1.3 lakh crore to Rs 2.3 lakh crore of investments in the coming years in creating robust infrastructure and building telecom and network products that have been incentivised by the government through PLI and other initiatives. After years of cut-throat competition and the apex court ruling on payment of past statutory dues left some players in the lurch, billionaire Sunil Mittal's Bharti Airtel and struggling Vodafone Idea almost in tandem raised tariffs, taking the plunge they had long been talking about.
While moving towards the new technology is compelling and inevitable, powering 5G would also mean massive initial investments for telcos, says Surajeet Das Gupta.
Vodafone-Idea (Vi) has said the key hurdle it faces in raising fresh funding, despite interest from investors, is the 'pricing situation' which is also the reason why it has asked the Department of Telecommunica-tions (DoT) for another extension of the moratorium on payment of spectrum instalment by one more year. Responding to a question during an analysts' call on Friday after its quarterly results on the reason for the delay in fund-raising nine months after it was announced, CEO & MD Ravinder Takkar said: "We are in discussions with investors. There is continued interest in investing in the telecom sector in the country. "The biggest hurdle is that the overall industry is under stress because of the pricing situation." He said that once tariffs go up, it will create a significant amount of confidence.
COAI sid the huge volume of traffic from RJio will pull down the weighted average voice realisation for other operators from 30-40 paise to 22-25 paise per minute or lower
Customers may lose freebies or have to pay a little more for mobile services in the days ahead as operators try to make up for Rs 61,100 crore they have committed to government in the latest spectrum auction.
AGR dues calculated by the government for 16 entities add up to Rs 1.69 lakh crore, while telcos' self-assessment place their dues at a mere Rs 37,176 crore.
The Department of Telecom has put on block around 385 MHz of radiowaves in the 1800 MHz band, and 46 MHz in the 900 MHz band.
Commenting on the development, Rajiv Mehrotra, Chairman of Shyam Group, told PTI: "We are delighted that the government has opened up the way for new telecom players to operate telecom services as soon as possible and this is a major step towards offering cost-effective mobile services." Russian conglomerate has already announced up to $5 billion (Rs 20,000 crore) investment in the Indian telecom sector.
India and Bahrain firms have formed a JV to provide solutions for telecom infrastructure.
The Telecom Regulatory Authority of India's (Trai) decision to stop issuing new licences for district-level operators or category 'C' players has effectively shut the door on smaller Internet service providers (ISPs) interested in setting up shop. Those who have moved on to category 'B' or state-level operations, too, are feeling the heat as they have to compete with the likes of Reliance, Bharti Airtel, BSNL, VSNL and Sify.
'By the end of 2022, we expect the installed base of 5G smartphones in India to reach 80-85 million.'
The telecom PSU plans to get back in black in two years; BSNL too has started discussions to lease out its towers.
Telecom firms like Bharti Airtel, Reliance Communications and MTNL have shown interest to start IPTV services, where television signal is carried to homes through telecom lines and broadband.
Indian telecom operators are world-leaders in terms of profitability, enjoying better EBIDTA margin than their counterparts in developed countries.
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