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BSNL LATEST UPDATED NEWS-
1. Newbies reluctant to tread 2G auction path
2. BSNL readies Rs 14,000 crore war chest
3. BSNL offers free WiMax trial to customers
4. BSNL offers 2mbps speed and unlimited download offer
5. Govt in a fix over mode for broadband in rural areas
6. Sunil Jain: 3G game changer
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1. Newbies reluctant to tread 2G auction path
New Delhi, March 28: New telecom operators are lobbying hard with the telecom ministry and the regulator to get start-up spectrum without going through the auction process.
The Telecom Regulatory Authority of India (Trai) is expected to submit a report on the auction of second-generation (2G) spectrum to the department of telecom by this week.
According to industry insiders, Trai may recommend selling 2G radiowaves, which can bring in additional revenues if sold through an auction rather than bundling it with a mobile licence.
At present, a telecom licence, which costs Rs 1,650 crore, is bundled with 4.4 mega hertz (MHz) of GSM spectrum, which is the minimum amount required to launch services.
Following this, operators are awarded an additional 1.8 units, subject to them meeting a certain subscriber target.
New entrants in the country’s fast growing mobile services sector, which have rolled out services in a few circles and are waiting for pan-India expansion, contend that according to the licence conditions, they are entitled to 4.4-6.2Mhz of radiowaves.
“Payment for start-up spectrum was part of the licence cost and the government should ensure that firms don’t have to shell out extra for assets they have already paid for,” said a senior executive from one of the new firms.
Videocon-promoted Datacom, Shyam Telelink, Uninor, Etisalat DB, B.K. Modi’s Spice Communications and S Tel are the new operators.
http://www.telegraphindia.com/1100329/jsp/business/story_12276143.jsp
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2. BSNL readies Rs 14,000 crore war chest
Posted by: "mukesh vaghela" mukeshgvaghela@yahoo.com mukeshgvaghela
Tue Mar 30, 2010 9:40 am
State-owned telecom major Bharat Sanchar Nigam Ltd (BSNL) has finalised a war chest of Rs 14,000 crore, one of the largest investments by the corporation in a single financial year, to defend its market share.
Half the money, to be invested over the next 12 months, will be used to expand its mobile network. This includes creating capacity for 20 million additional customers, doubling third generation (3G) service coverage from 366 to 760 cities by the end of the next financial year and creating capacity to almost double its broadband subscriber base from 3.5 million to 7.5 million in the same period.
BSNL is India’s fourth largest mobile service company in terms of number of subscribers with a 12 per cent market share. In broadband, it is the undisputed leader with a 60 per cent market share.
“Our main aim is to maintain our market share in the mobile space especially as there are now 13 or 14 players in the market,” BSNL chairman Kuldeep Goel told Business Standard. “We are concentrating on the domestic market, which is why we have also decided to go slow on our plans to go global.”
The corporation recently exited a consortium set up to bid for the African assets of Kuwait’s Zain Telecom. Last week, the west Asian company signed a deal with Bharti for its assets in 15 African countries.
Goel has also drawn up an aggressive 3G roll out strategy to leverage its first-mover advantage. The company, together with Mahanagar Telephone Nigam Ltd, state-owned telecom service provider for Mumbai and Delhi, was given spectrum for 3G services over a year ago. Auctions for 3G for the private sector will begin in April and spectrum will be given to them in September.
“We have 1.5 million 3G customers out of our total subscriber base of 60 million. Our target is to get 5 million 3G customers by the end of the next financial year. We expect 5 per cent of our total user base to come from 3G initially. This percentage may go up to 10 per cent later,” he added.
Asked how BSNL would raise resources for such a large investment, Goel said: “We are a debt-free company with reserves of over Rs 35,000 crore.”
It also plans to contain costs by making a fundamental shift in its procurement policy. Instead of following the decades-old system of ordering and buying a fixed number of mobile lines, BSNL recently floated a request for proposal (RFP) for a “managed capacity” model, which means outsourcing its network operations and management like private competitors do. The new contracts will be for a duration of two to three years.
The change has been prompted by recommendations from the Sam Pitroda committee to scrap a 93 million line GSM order due to various controversies.
The BSNL board has accepted the recommendation.
Ahead of the new contract, the company has also prepared a contingency plan to meet its immediate need for new capacity. It will issue an additional order of 5-10 million lines to Ericsson, its current vendor, which has supplied equipment in the north and east. In the south and west, the company has 20 million lines under installation, which is considered sufficient to meet demand for the next 12 months.
Goel admitted, however, that the company might slip into the red this year on account of arrears on wages that have been raised. “We had a net profit of Rs 175 crore for the half-year ended December this year and were expecting profits of Rs 200 crore to Rs 300 crore at the end of the financial year. If we have to pay arrears on wages, which comes to around Rs 3,700 crore, we will surely make a loss this year.”
http://www.business-standard.com/india/news/bsnl-readies-rs-14000-crore-war-chest/390050/
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3. BSNL offers free WiMax trial to customers
As per a new offer by BSNL, its subscribers can now experience WiMax services free of cost. BSNL will offer free trial of its WiMax service to customers till April 15. Customers will not be charged monthly rental or rent for the modem for 30 days from the day of activation. They will also be able to download 400 MB of data free of cost.
However, subscribers will be required to deposit Rs 2,000 as security which will be refunded in case they are not interested in availing the services anymore.
Related News
*
WiMax is a limited area wireless internet connectivity service which allows high speed internet access. It is similar to WiFi, but the radius of the WiMax service is larger. Currently, BSNL offers internet at speeds ranging from 512 Kbps to 2 Mbps.
The state owned telco had launched the country's first mobile WiMax service in Kerala earlier this month.
http://telecomyatra.afaqs.com/news/?sid=681_BSNL+offers+free+WiMax+trial+to+customers
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4. BSNL offers 2mbps speed and unlimited download offer
BSNL has made a surprising announcement for their upcoming coustomers. People who will subscribe for a new connection from BSNL before March 31st would be able to make unlimited downloads at a speed of up to 2mbps. This speed would be offered for the first 15 days following the connection,
However, after the fortnight, the plan would be reverted to the one that the customer had chosen initially. User will have to pay the Security Deposit for the opted Broadband Plan and the Modem Security Deposit.
The first bill received would reflect these. BSNL has also announced that the minimum period of hire for customers who avail this scheme would be one month.BSNL might launched this offer after Airtel’s announcement of free connection upgrades (to 2 Mbps) during the IPl
http://ub-news.com/news/bsnl-offers-2mbps-speed-and-unlimited-download-offer/10896.html
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5. Govt in a fix over mode for broadband in rural areas
Thomas K. Thomas
New Delhi, March 28
The Government is in a fix on whether to deploy a massive wire line network to reach broadband in rural areas or depend on wireless technologies such as WiMax and 3G.
The Universal Services Obligation (USO) Fund Administrator has now been told to prepare a detailed project report on the need and cost for laying an optical fibre cable network in rural areas to boost broadband usage.
A committee on broadband, set up under the direction of Cabinet Secretary, Mr K.M. Chandrasekhar, has suggested investing Rs 18,000 crore over three years to lay a five-lakh-km optical fibre cable network connecting rural areas. However, this suggestion has not found favour with some of the top officials in the Department of Telecom (DoT).
A note prepared by the Additional Secretary, DoT, stated that laying of optical fibre cable is very slow and tedious and may take about 10 years to complete.
The official expressed concerns over investing the money at a time when most operators are deploying wireless networks which will address the broadband requirements of rural consumers.
At a meeting held on March 18 under the Chairmanship of Secretary, DoT, the USO fund has been asked to map existing OFC network on GIS platform within two months to get a better estimate of the additional cable required.
The USO fund will also prepare an estimate of broadband growth in rural areas in 20 years, cost estimate for the project along with economic rate of return and give suggestion on optimum depth to which OFC should be laid.
During the meeting, one of the DoT official proposed that the project may be implemented in two phases whereby initially a wireless network capable of offering 2Mbps broadband may be laid out and after three years an OFC network could be rolled out once bandwidth consumption picks up in rural areas.
BSNL executives present in the meeting stated that they had already connected 78,073 villages through wireline technology. Further another 1.3 lakh villages are being planned to be covered through WiMax-based wireless broadband. BSNL executives said that about 78,000 WiMax base stations need to be installed to ensure broadband coverage of these villages.
Out of this, 1,000 base stations have already been ordered. It was informed that since 20 Mhz spectrum is available with BSNL, it can either cater to 600 subscribers of 256 kbps or 75 subscribers of 2 Mbps in the area of each tower.
http://www.thehindubusinessline.com/2010/03/29/stories/2010032951090200.htm
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6. Sunil Jain: 3G game changer
Will Finance Minister Pranab Mukherjee get more than the Rs 35,000 crore he had budgeted for from the auctions of 3G and BWA spectrum that will take place next week, considering that there’s one less 3G slot this time around? As compared to four 3G slots apart from one given to BSNL/MTNL that were supposed to have been auctioned initially, there will only be three slots apart from BSNL/MTNL. Making predictions is foolhardly, but a few points can be made as to why Mukherjee’s target may well turn out to be conservative:
* On average, the GSM firms have around 7 MHz of spectrum and will get 5 MHz more if they win the 3G spectrum — this will raise their operational efficiencies by 30-40 per cent, so firms will pay to get this.
* There are nine bidders for 3 3G slots, of which six are existing players. Those who don’t get 3G spectrum will likely lose premium customers who generally like to use data. Modems sold by RCom and Tata Tele, that operate at 3G speeds, today give them revenues of around Rs 600 a month, or 3-4 times what normal voice customers pay.
* If you look at the valuations paid by firms like Telenor and Etisalat for buying part of Unitech and Swan, this suggests you could get valuations of around Rs 40,000 crore or so.
* If a firm has access to lower-cost capital, this hugely raises its ability to bid — according to Kotak Institutional Equities, a reduction in the Weighted Average Cost of Capital (that’s cost of debt and equity) from 15 per cent to 13 per cent (that’s by 13 per cent) will raise the amount the firm can bid by as much as 24 per cent.
Part of the value that firms will pay is clearly driven by the extra revenues they will earn from 3G spectrum — so, if customers pay extra for being able to use high-speed data which 3G allows them, a firm will pay that much more for the spectrum. So, the critical parameters here are how many customers will start using 3G services and how much more they will pay for using them. Estimates vary, but two that I have seen recently, by BDA and Kotak Institutional Equities, project 90-100 mn users in the next 5 years. BDA has separate numbers for the RCom/TataTele-type modems that will run on 3G, while Kotak assumes a lower $4 of extra revenue (Rs 180) per month from 3G subscribers in metros/A circles, going down to $2.4 in C circles. Based on the revenue stream that this generates and after discounting it, Kotak assumes all firms who bid will gain an extra $6 bn from 3G operations.
THERE IS NO ALTERNATIVE (TINA)
(or why firms will pay more than they should for 3G licences)
$mn Value creation
due to 3G* Value destruction
without 3G** Total 'value'
for firms
Bharti 2,273 2,318 4,591
Vodafone 1,937 1,634 3,571
RCom 274 514 788
TataTele 1,175 515 1,690
Idea 207 265 472
Aircel 184 306 490
BSNL 88 662 750
MTNL -30 52 22
Total 6,108 6,266 12,374
* Due to greater revenues from 3G services; ** Due to customers leaving if operator doesn't offer 3G services; Against its ‘value’ of $4.6 bn, Bharti will pay $2.5 bn; Vodafone will pay $2.4 bn against its ‘value’ of $3.6 bn; BSNL/MTNL, however, will pay $2.5 bn (to match Bharti) while their ‘value’ will only be $0.7 bn. Source: Kotak Institutional Equities
It is after this that the Kotak analysis gets interesting. The report points out that firms also stand to lose customers if they don’t offer 3G services — I would, for instance, move from Vodafone if it never offered 3G speeds on my phone while Airtel did. So Vodafone, in this case, has to bid to not just capture the increased revenue I will provide it by using 3G services, it has to take into account the loss it makes if users move away to rivals. Kotak suggests both figures are roughly equal. While firms like Bharti/ Vodafone/ RCom/ TataTele will bid less than this ‘value’ — Bharti will pay $2.5 bn and Vodafone $2.4 bn as compared to their potential earnings/losses of $4.6 bn and $3.6 bn — those like BSNL/MTNL will pay much more since they have to match the top bidder but, says Kotak,won’t derive as much value from their subbscribers. All told, Kotak estimates the net present value of the gain from 3G services is $6.1 bn and the loss from
not bidding for 3G is $6.3 bn — the total ‘value’ of the 3G spectrum for firms is $12.4 bn. It projects firms will bid a bit lower, at $10.3 bn and $1.1 bn for BWA spectrum.
You could quibble with the numbers. BSNL/MTNL may make more money than Kotak thinks, firms may not bid anywhere near $6.3 bn to protect the loss of customers/revenues and BWA bids may be much higher since each licence offers double the spectrum that 3G licences do even though it offers less flexibility of use, at least for now. Either way, it does appear likely the FM’s growth target will be surpassed quite handsomely.
http://www.business-standard.com/india/news/sunil-jain-3g-game-changer/389983/
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