Friday 18 May 2012
Mobile call rates would double in some circles if the recommendations of TRAI on spectrum pricing are accepted, telecom CEOs who met Telecom Minister Kapil Sibal warned on Tuesday.
“…there will be circles which will have more than a 100 per cent price rise (in tariffs) if they were to absorb the impact of what is being recommended,” Bharti Airtel CEO Sanjay Kapoor told reporters here.
“In one circle, the cost of spectrum, the reserve price is Rs 7 crore and on other end, there are metros where it is Rs 717 crore, which is a 100 times differential,” he said.
The chiefs of Bharti Airtel, Vodafone India, Idea Cellular, Uninor and Videocon met Mr. Sibal and Department of Telecom Secretary R. Chandrashekhar to discuss the implications of TRAI recommendations.
Top officials of CDMA operators Sistema Shyam Teleservices, Reliance Communications, Tata Teleservices and CDMA body AUSPI also met the minister earlier in the day on the same issue.
Mr. Kapoor said, “The discussion was about two things — one is the TRAI recommendations made on the reserve price and auction, and basically (its saying) that the recommendations will have an impact of 2 paise on the industry, and the other was about reframing.”
TRAI has not considered the price elasticity of demand while formulating the 2 paise assumption, he said.
“As the prices rise, the consumption goes down. And it has been absolutely assumed as if the consumption will remain constant which is not correct,” Mr. Kapoor said, adding that there is a 30 paise per minute impact and not 2 paise as TRAI has assumed.
TRAI has suggested a base price of Rs 3,622 crore for one megahertz (MHz) for pan—India spectrum.
This is around 10 times higher for pan—India operations than the price at which 2G licences bundled with 4.4 MHz spectrum were allocated in 2008 under the then telecom minister A Raja.
Mr. Kapoor said TRAI has taken into consideration only 576 Mhz in the 1800 Mhz band for calculations, whereas in reality 1167.40 Mhz of spectrum is at play.
“Now the difference between what Trai has taken is three times apart because TRAI has taken Rs 93,000 crore into cognisance whereas the cost of spectrum that I just mentioned is more than Rs 2,84,000 crore,” he added.
MNP fails to enthuse customers
About a year into operation, mobile number portability (MNP) that allowed telephone subscribers to change their operators without forgoing their existing numbers, has failed to enthuse customers as only over two percent subscribers have so far opted for the service.
According to the Telecom Regulatory Authority of India (TRAI), Idea Cellular has gained the maximum number of subscribers from other companies via MNP route with a net gain of 1.57 million users as on Nov 15 while the total number of subscribers who opted for this service stood at around 18 million.
Idea was followed by Vodafone and Bharti Airtel which respectively saw net gains of 1.2 million and 0.3 million customers.
“A key reason for the slow port-in and port-out is that 95 percent of the country’s mobile customers are in the pre-paid category. This segment has a monthly churn rate of 4 to 5 percent, indicating the segment is insensitive to number retention,” Samaresh Parida, director (strategy) of Vodafone India, said.
Industry experts also say the service has limitations with hassles like documentation, filling up forms, clearing dues and obtaining no-objection certificates from departing operators resulting in lower porting requests.
After several postponements, MNP was launched pan-India Jan 20 with much pomp and show. It was even expected to be a game changer.
Parida said Vodafone “never believed that MNP would be a game changer but we did expect that it will change market dynamics.”
Following the launch of the service, many telecom firms had gone ahead with several promotional campaigns to attract new customers and retain existing ones.
Vodafone, Idea, Airtel in pact for pan-India 3G services
In an undeclared roll-out of inter-dependency in the highly competitive telecom market, three major telecom players – Vodafone, Idea Cellular and Bharti Airtel – have entered into agreements to provide pan-India 3G services.
The three will now use each other’s networks through intra-circle roaming arrangements where they do not have licences.
Airtel, Aircel and Reliance Communications each own 3G spectrum licence in 13 of the 22 telecom circles, while Vodafone, Idea and the Tatas each have licence in nine circles.
The communication further explained: “With this agreement, Vodafone / Airtel / Idea will bring a pan-India experience of 3G services to their customers.”
9 million users connect to 3G in 4 monthsq
Since the launch of 3G services four months ago, telcos in India have signed up as many as 9 million consumers.
The leader of the 3G pack is Bharti Airtel with 3 million subscribers followed by Tata DoCoMo with 1.5 million users.
Idea Cellular, Vodafone and BSNL have over a million 3G customers each.
Reliance Communications did not give out its numbers but sources said that it also has close to a million 3G connections.
Idea Cellular says adds 1 mln 3G users since March launch
Telecom service provider Idea Cellular Thursday said it has registered one million third generation (3G) subscribers within the first month of it launching the service in the country.
‘One million Idea users are now enjoying superior quality voice, text and data services including high speed internet browsing up to 21.1 Mbps, video calling, mobile TV, multi player gaming and many more applications on the 3G platform,’ the company said in a statement.
Starting with 3G network in nine cities in March, Idea now covers over 400 towns across the country.
The telecom company had started off its 3G services from three circles – Gujarat, Madhya Pradesh and Chhattisgarh, Himachal Pradesh on 28 March, thereafter expanding to six other circles of UP East, UP West, Maharashtra & Goa, Kerala, Haryana, and Andhra Pradesh.
It is now looking at progressively expanding its 3G services to cover 750 towns by mid 2011, and 4,000 towns by the end of FY12.
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